Food for the Stomach or Fuel for the Tank: What do Prices Tell Us?

The "food vs. fuel" debate may be difficult to resolve without letting the data ’speak’. We investigate the short and long-run relationships between food and fuel prices. Our analysis spans the period 1989-2013, covering the lead-up to the 2007-08 price spike, the sharp downward movement in the aftermath, as well as the period thereafter. This provides a more complete picture of the interaction between agriculture and fuel markets. Our results indicate the existence of a long-run equilibrium relationship between the prices in these markets. A closer examination of the dynamics between ethanol and corn, soybean, and sugar prices shows that the corn-soybean linkage plays a key role in shaping the long-run relationship between food and fuel prices. Although ethanol prices Granger cause corn prices, no individual agricultural commodity Granger causes ethanol prices. However, corn and soybean as a single group has an impact on the ethanol market


Issue Date:
2015
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/211822
Total Pages:
28
JEL Codes:
Q02 Q11 Q13 Q41




 Record created 2017-04-01, last modified 2017-12-05

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