The Dynamics of Supply: U.S. Corn and Soybeans in the Biofuel Era

Moschini, GianCarlo

doi:10.3368/le.94.4.593

Cited by 24 publications

(28 citation statements)

References 46 publications

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“…The estimated regression coefficients imply that actions are intertemporal substitutes, as in resource scarcity stories. This finding is consistent with recent empirical results in agricultural economics (Hendricks et al, 2014;Kim and Moschini, 2018) and with implications of crop rotation dynamics (Eckstein, 1984) but is contrary to widespread intuition based on Le Châtelier's principle. According to the theoretical analysis, agents will undertake more adaptation to short-run weather shocks than to long-run climate change.…”

Section: Lemoine Estimating Climate From Weathersupporting

confidence: 87%

“…Within the economic model, these opposite effects imply that adaptive actions taken two years ago increase current payoffs by constraining the actions taken last year. Findingπ 12 < 0 is contrary to Le Châtelier's principle but consistent with recent empirical work in agricultural economics (Hendricks et al, 2014;Kim and Moschini, 2018). Following Eckstein (1984), these researchers attribute their results to soil nitrogen and pest dynamics inducing farmers to rotate their crops over time.…”

Section: Lemoinesupporting

confidence: 77%

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Estimating the Consequences of Climate Change from Variation in Weather

Lemoine¹

2018

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for helpful comments. I thank Wolfram Schlenker for kindly providing data and Olivier Deschênes for helpful conversations. An early version circulated as "Sufficient Statistics for the Cost of Climate Change." The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Section: Lemoine Estimating Climate From Weathersupporting

confidence: 87%

Section: Lemoinesupporting

confidence: 77%

Estimating the Consequences of Climate Change from Variation in Weather

Lemoine¹

2018

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“…Second, crop rotations are not explicitly modeled. Rotations matter when studying responses to shocks (Hendricks, Smith, & Sumner, 2014;Kim & Moschini, 2018) although their omission in county-level analysis is inevitable due to aggregation. Third, the crop-specific production costs data are spatially invariant, which is unrealistic.…”

Section: Land Use Change Estimationmentioning

confidence: 99%

Evidence of climate change impacts on crop comparative advantage and land use

Arora

Feng

Anderson³

et al. 2020

Agricultural Economics

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Relative agricultural productivity shocks emerging from climate change will alter regional cropland use. Land allocations are sensitive to crop profits that in turn depend on yield effects induced by changes in climate and technology. We develop and apply an integrated framework to assess the impact of climate change on agricultural productivity and land use for the U.S. Northern Great Plains. Crop‐specific yield–weather models reveal crop comparative advantage due to differential yield impacts of weather across the region's major crops, that is, alfalfa, wheat, soybeans, and maize. We define crop profits as a function of the weather‐driven yields, which are then used to model land use allocation decisions. This ultimately allows us to simulate the impact of climate change under the RCP4.5 emissions scenario on land allocated to the region's major crops as well as to grass/pasture. Upon removing the trends effects in yields, climate change is projected to lower yields by 33–64% over 2031–2055 relative to 1981–2005, with soybean being the least and alfalfa the most affected crops. Yield projections applied to the land use model at present‐day input costs and output prices reveals that Dakotas’ grass acreage will increase by up to 23%, displacing croplands. Wheat acreage is expected to increase by up to 54% in select southeastern counties of North Dakota and South Dakota, where maize/soy acreage had increased by up to 58% during 1995–2016.

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“…The substitution and displacement effects are influenced by the supply responsiveness to price changes and by entrepreneurs' decisions to switch crops (Go and Lau, 2017). In addition, land in any country may be converted to the production of oilseed crops in order to accommodate the increased demand, driven by pro-biofuel policies (Kim and Moschini, 2018). The consequences on GHG emissions, related to the potential land use effects, may be detrimental (Searchinger et al 2008;Haile et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

Price responsiveness of supply and acreage in the EU vegetable oil markets: Policy implications

2021

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Vegetable oil market is becoming of increasing interest in the global biofuel industry. This phenomenon has also interested the European Union (EU), where the growing expansion of biofuel production is affected by political interventions promoting fuel security and environmental goals. Yet, empirical evidence on the impacts that changes in price of one commodity may have on the supply of another commodity are rather scant. We investigate these dynamics for the major sources of biodiesel in the EU and conclude on cross-commodity linkages for palm, rapeseed, soy, and sunflower oils. We also examine the acreage response of domestically produced feedstocks to changes in prices of vegetable oils. Our findings suggest strong and diversified path dependencies among vegetable oils that should be considered in planning sustainable biofuel policies. In particular, the empirical analysis reveals the great relevance of sunflower and soy oils, which show a high price responsiveness, and the high competition in end uses of domestically produced vegetable oils (i.e. rapeseed, soy, and sunflower oils), that tend to be net substitutes in supply. In terms of land use effects, we find that an increase in the price of imported palm oil results in a displacement effect in land devoted to rapeseed cultivation, whereas a surge in the price of sunflower oil decreases the use of land for rapeseed. Land use effects would be relevant in northern EU countries where the production of rapeseed is the most intense. A policy measure in the EU, incentivising the production of renewable and environmental-friendly fuel from sustainable feedstocks, would be positive for the domestic market to the extent that it stimulates the production of vegetable oils (soy and sunflower oils) with the highest direct and indirect emissions saving. However, the expansion of oil palm plantations in extra-EU producing countries and of imports to the EU would determine important impacts in terms of indirect land use change emissions and direct emissions due to increased transports.

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The Dynamics of Supply: U.S. Corn and Soybeans in the Biofuel Era

Cited by 24 publications

References 46 publications

Estimating the Consequences of Climate Change from Variation in Weather

Estimating the Consequences of Climate Change from Variation in Weather

Evidence of climate change impacts on crop comparative advantage and land use

Price responsiveness of supply and acreage in the EU vegetable oil markets: Policy implications

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