Disentangling Short-Run COVID-19 Price Impact Pathways in the U.S. Corn Market

33 Pages Posted: 29 Sep 2021

See all articles by Yixuan Gao

Yixuan Gao

Michigan State University - Department of Agricultural, Food and Resource Economics

Trey Malone

College of Agriculture, Department of Agricultural Economics, Purdue University

K. Aleks Schaefer

Oklahoma State University - Stillwater - Department of Agricultural Economics

Robert J. Myers

Michigan State University - Department of Agricultural Economics

Date Written: September 29, 2021

Abstract

The COVID-19 pandemic induced numerous supply chain shocks in U.S. agricultural markets though few empirical studies have sought to disentangle commodity price impacts caused by unique changes in food and non-food agricultural product demand. Using a data-modified version of the relative-price-of-a-substitute method, we distinguish the consequences of the sharp decline in U.S. automotive fuel demand from the consequences of non-ethanol demand changes in the U.S. corn market. Our results indicate that the onset of the COVID-19 pandemic reduced Illinois cash prices for corn by approximately 18%. The majority of this impact (approximately 16%) was driven by pandemic-induced ethanol demand reductions. Ethanol-driven and total impacts were greater in locations farther from terminal markets.

Keywords: corn prices, COVID-19, ethanol, stay-at-home order, relative price of a substitute

JEL Classification: Q11, Q16, Q41

Suggested Citation

Gao, Yixuan and Malone, Trey and Schaefer, K. Aleks and Myers, Robert J., Disentangling Short-Run COVID-19 Price Impact Pathways in the U.S. Corn Market (September 29, 2021). Available at SSRN: https://ssrn.com/abstract=3932703 or http://dx.doi.org/10.2139/ssrn.3932703

Yixuan Gao

Michigan State University - Department of Agricultural, Food and Resource Economics ( email )

MI
United States

Trey Malone (Contact Author)

College of Agriculture, Department of Agricultural Economics, Purdue University ( email )

United States

K. Aleks Schaefer

Oklahoma State University - Stillwater - Department of Agricultural Economics ( email )

Stillwater, OK 74078-6026
United States

HOME PAGE: http://kaleksschaefer.weebly.com/

Robert J. Myers

Michigan State University - Department of Agricultural Economics ( email )

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

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