How does petroleum price and corn yield volatility affect ethanol markets with and without an ethanol use mandate?

Thompson, Wyatt; Meyer, Seth D.; Westhoff, Patrick C.

doi:10.1016/j.enpol.2008.08.035

Cited by 55 publications

(35 citation statements)

References 5 publications

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“…In an attempt to better explain spot prices in the corn and ethanol markets, Kruse et al (2007) used a medium-run relationship to analyze the effect of removing biofuel subsidies, and Thompson, Meyer, and Westhoff (2009) in a similar analysis examined the covariance among corn, ethanol, and oil markets. Instead of assuming that a long-run noprofit condition holds, they specified ethanol supply and demand functions that depend on capacity, which requires the assumption that the ethanol market gravitates toward a long-run equilibrium in the corn and ethanol markets.…”

Section: Previous Workmentioning

confidence: 99%

How market efficiency and the theory of storage link corn and ethanol markets

2012

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In this article we use the theories of market efficiency and supply of storage to develop a conceptual link between the corn and ethanol markets and explore statistical evidence for the link. We propose that a long-run no-profit condition is established in distant futures markets for ethanol, corn, and natural gas and then use the theory of storage to define an inter-temporal equilibrium among these prices. The relationship shows that under certain conditions, future price expectations will influence current spot prices and that a short-term relationship between input and output prices will exist. This short-term relationship will contain fixed costs. We demonstrate validity of the theory using a structural price model and then by means of time-series techniques. AbstractIn this article we use the theories of market efficiency and supply of storage to

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Section: Previous Workmentioning

confidence: 99%

How market efficiency and the theory of storage link corn and ethanol markets

2012

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“…New potential sources of volatility include factors that drive the demand for biofuels, among them oil price volatility and the effect of ethanol mandates (e.g., Thompson, Meyer, and Westhoff, 2009). To take account of this potential effect, crude oil price volatility is also included, as measured using the U.S. CPI-deflated average petroleum spot price (APSP) calculated by the IMF.…”

Section: Oil Price Volatilitymentioning

confidence: 99%

What Explains the Rise in Food Price Volatility?

Roache

2010

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The macroeconomic effects of large food price swings can be broad and far-reaching, including the balance of payments of importers and exporters, budgets, inflation, and poverty. For market participants and policymakers, managing low frequency volatility-i.e., the component of volatility that persists for longer than one harvest year-may be more challenging as uncertainty regarding its persistence is likely to be higher. This paper measures the low frequency volatility of food commodity spot prices using the spline-GARCH approach. It finds that low frequency volatility is positively correlated across different commodities, suggesting an important role for common factors. It also identifies a number of determinants of low frequency volatility, two of which-the variation in U.S. inflation and the U.S. dollar exchange rate-explain a relatively large part of the rise in volatility since the mid-1990s.

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“…For example, global agricultural production, even with contemporary technological advancement, entails a substantial amount of crop yield variability, which is largely due to climate variations (Kahsay & Hansen, 2016;Ray, Gerber, MacDonald, & West, 2015;Urban, Roberts, Schlenker, & Lobell, 2012;Wheeler & von Braun, 2013). The recent surge in demand for biofuel has made such production variability even more pronounced, as several studies on inter-annual variations in corn stover supply for the US suggest (Golecha & Gan, 2016;Thompson, Meyer, & Westhoff, 2009). Thus, the challenges posed by the variability in resource availability are broadly observed and have significant implications for global food and energy security.…”

Section: Introductionmentioning

confidence: 99%

Mobility and Sustainability: A Computational Model of African Pastoralists

Sakamoto¹

2016

JMS

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This article offers a simple computational model of mobile pastoralists. Employing an agent-based modeling (ABM) approach, the model explicitly simulates the movement patterns of pastoralists and computes the resultant natural resource access for a landscape that shows the typically unpredictable dynamics of African rangeland ecology. Extensive simulations reveal a striking level of efficiency in the exploitation of resource endowments that mobile pastoralists can achieve in otherwise inhospitable environments. The simulations also illuminate the serious welfare consequences of the disruption of pastoral mobility under tight land constraints. These quantitative results are consistent with the rich qualitative evidence from the empirical literature on African pastoralism. Moreover, the article reports on several sets of 'policy experiments' that evaluate the effect of rangeland interventions on the mobility and livelihoods of pastoralists. These endeavors will pave the way for empirically richer and more policy-relevant analyses of dryland pastoralism.

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How does petroleum price and corn yield volatility affect ethanol markets with and without an ethanol use mandate?

Cited by 55 publications

References 5 publications

How market efficiency and the theory of storage link corn and ethanol markets

How market efficiency and the theory of storage link corn and ethanol markets

What Explains the Rise in Food Price Volatility?

Mobility and Sustainability: A Computational Model of African Pastoralists

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