Understanding the Underlying Fundamentals of Ethanol Markets: Linkages between Energy and Agriculture

This study analyzes the impact of price shocks in three input and output markets critical to ethanol: gasoline, corn, and sugar. We investigate the impact of these shocks on ethanol and related agricultural markets in the United States and Brazil. We find that the composition of a country's vehicle fleet determines the direction of the response of ethanol consumption to changes in the gasoline price. We also find that a change in feedstock costs affects the profitability of ethanol producers and the domestic ethanol price. In Brazil, where two commodities compete for sugarcane, changes in the sugar market affect the competing ethanol market.


Issue Date:
2007
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/9795
Total Pages:
53
JEL Codes:
Q11; Q18; Q42
Series Statement:
AAEA Selected Paper 172779




 Record created 2017-04-01, last modified 2017-08-23

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