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Impacts of Expanded Ethanol Production on Southern Agriculture

  • Dwi Susanto (a1), C. Parr Rosson (a1) and Darren Hudson (a2)

Abstract

This study analyzes the potential impacts of expanded ethanol production on southern agriculture. Results of regression analysis suggest that acreage planted for field crops (corn, cotton, soybeans, and wheat) is inelastic with respect to relative prices. The results provide statistical evidence of potential significant acreage shifts favoring corn over cotton, soybeans, and wheat. Simulations indicate that higher corn prices will increase corn acreage, but the South continues to be a deficit corn region. U.S. corn production is capable of supplying domestic demand for ethanol, feed for livestock and poultry, and other uses, while maintaining exports at more than 2 billion bushels annually.

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Baker, A., and Zahniser, S.. “Ethanol Reshapes the Corn Market.” Amber Waves, Vol. 4, Issue 2, 2006.
Elobeid, A., Tokgoz, S., Hayes, D.D., Babcock, B.A., and Hart, C.E.. “The Long-Run Impact of Corn-Based Ethanol on the Grain, Oilseed, and Livestock Sectors: A Preliminary Assessment.” Card Briefing Paper 06-BP 49, Center for Rural Development. Ames, IA: Iowa State University, November 2006.
FAPRI U.S. and World Agricultural Outlook 2007. F APRI Staff Report 07-FSR 1. Food and Agricultural Policy Research Institute, Iowa State University-University of Columbia, Ames, Iowa, January 2007. Available online at http://www.fapri.iastate.edu/Outlook2007/.
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Peel, D.S.An Overview of the Impacts of increased Corn Demand for Ethanol.” Fact Sheet: Livestock Marketing Information Center. Department of Agricultural Economics, Oklahoma State University, February 2007.
Schoonover, H., and Muller, M.. “Staying Home: How Ethanol Will Change U.S. Corn Exports.” Minneapolis, MN: Institute for Agriculture and Trade Policy, December 2006.
USDA. “USDA Agricultural Projections to 2017.” Long-Term Projections Report OCE-2008-1, Office of the Chief Economist. World Agricultural Outlook Board, Washington, DC, February 2008.
Westcott, P.C.Ethanol Expansion in the United States: How Will the Agricultural Sector Adjust?” ERS, USDA, Washington, DC, May 2007.

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Impacts of Expanded Ethanol Production on Southern Agriculture

  • Dwi Susanto (a1), C. Parr Rosson (a1) and Darren Hudson (a2)

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