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The Impacts of Biofuel Policies on Spatial and Vertical Price Relationships in the US Fertilizer Industry
Author(s) -
Bekkerman Anton,
Gumbley Thomas,
Brester Gary W.
Publication year - 2021
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1002/aepp.13038
Subject(s) - fertilizer , biofuel , economics , leverage (statistics) , production (economics) , agricultural economics , natural gas prices , natural resource economics , agronomy , natural gas , microeconomics , microbiology and biotechnology , ecology , biology , mathematics , statistics
Biofuel policies and concomitant market forces in the mid‐2000s systemically altered US corn markets. Because corn production requires large nitrogen fertilizer inputs, those policies may have also impacted US fertilizer markets. We model fertilizer price relationships across US regions and leverage the natural experiment of biofuel policy intervention to show the secondary impacts on fertilizer markets. Long‐run fertilizer price adjustments became faster and short‐run price dynamics became more responsive to corn markets and less affected by natural gas prices. Additionally, regions where corn production significantly increased after the policies had a 10–20% increase in influencing the fertilizer price discovery process.