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Crop-based Biofuel Production with Acreage Competition and Uncertainty
Land Economics
  • Mindy Mallory, University of Illinois
  • Dermot J. Hayes, Iowa State University
  • Bruce Babcock, Iowa State University
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This paper examines the role of uncertain crude oil prices, uncertain crop yields, and competition for acreage on corn, soybean, and switchgrass prices under biofuel production mandates. We find enforcement of the cellulosic mandate is costly in that it raises equilibrium prices of all three crops through competition for acreage. However, crude oil prices largely determine industry profitability even in the face of high crop prices. Further we find that uncertainty in crude oil prices and crop yields causes higher corn, soybean, and switchgrass prices compared to a baseline with no uncertainty.

this is a working paper from Land Economics, 2011 87(4); 610-627. DOI: 10.3368/le.87.4.610.

Citation Information
Mindy Mallory, Dermot J. Hayes and Bruce Babcock. "Crop-based Biofuel Production with Acreage Competition and Uncertainty" Land Economics Vol. 87 Iss. 4 (2011) p. 610 - 627
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