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

No 211822, 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists

Abstract: 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

Keywords: Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety (search for similar items in EconPapers)
Pages: 28
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-ene and nep-pr~
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Working Paper: Food for the Stomach or Fuel for the Tank: What do Prices Tell Us? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae15:211822

DOI: 10.22004/ag.econ.211822

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