Long‐Run and Short‐Run Co‐Movements in Energy Prices and the Prices of Agricultural Feedstocks for Biofuel

18 Pages Posted: 15 Apr 2020

See all articles by Robert J. Myers

Robert J. Myers

Michigan State University - Department of Agricultural Economics

Stanley R. Johnson

Iowa State University - Department of Economics

Michael Helmar

University of Nevada, Reno

Harry Baumes

affiliation not provided to SSRN

Date Written: July 2014

Abstract

Recent expansions in biofuel production have led to concerns about an emerging “new relationship” between energy prices and the prices of agricultural feedstock for biofuel. We provide new econometric evidence on this relationship using common trend‐common cycle decompositions to estimate long‐run and short‐run co‐movement across various energy and agricultural prices. We also test for the presence of regime changes that may alter the relationship between energy and agricultural feedstock prices under certain conditions. We find that co‐movements between energy and agricultural feedstock prices tend to dissipate in the long‐run, which has important implications for biofuel and food policy.

Keywords: Biofuels, commodity prices, co-movement, energy prices

Suggested Citation

Myers, Robert J. and Johnson, Stanley R. and Helmar, Michael and Baumes, Harry, Long‐Run and Short‐Run Co‐Movements in Energy Prices and the Prices of Agricultural Feedstocks for Biofuel (July 2014). American Journal of Agricultural Economics, Vol. 96, Issue 4, pp. 991-1008, 2014, Available at SSRN: https://ssrn.com/abstract=3573741 or http://dx.doi.org/10.1093/ajae/aau003

Robert J. Myers (Contact Author)

Michigan State University - Department of Agricultural Economics ( email )

East Lansing, MI 48824
United States
517-432-3649 (Phone)

Stanley R. Johnson

Iowa State University - Department of Economics

260 Heady Hall
Ames, IA 50011
United States

Michael Helmar

University of Nevada, Reno ( email )

1664 N. Virginia St
Reno, NV 89557
United States

Harry Baumes

affiliation not provided to SSRN

No Address Available

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