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How Much Ethanol Can Be Consumed In E85?, Sebastien Pouliot, Bruce A. Babcock Sep 2015

How Much Ethanol Can Be Consumed In E85?, Sebastien Pouliot, Bruce A. Babcock

CARD Briefing Papers

EPA’s justification for proposing to reduce ethanol mandates in the Renewable Fuel Standard (RFS) is that consumer demand for ethanol is not high enough to meet the original targets. About 13.7 billion gallons of ethanol can be consumed in E10, which contains 10% ethanol. The original mandate for conventional biofuel (widely assumed to be corn ethanol) was supposed to increase to 15 billion gallons in 2016. This would require that 1.3 billion gallons of ethanol would need to be consumed in gasoline-ethanol blends that contain more than 10% ethanol. The two blends that contain more than 10 ...


Breaking The Link Between Food And Biofuels, Bruce A. Babcock Jul 2008

Breaking The Link Between Food And Biofuels, Bruce A. Babcock

CARD Briefing Papers

Production of biofuels from feedstocks that are diverted from food production or that are grown on land that could grow crops has two important drawbacks: higher food prices and decreased reduction in greenhouse gas emissions. If U.S. policy were to change and place greater emphasis on food prices and greenhouse gas reductions, then we would transition away from current feedstocks toward those that do not reduce our ability to produce food. Examples of such feedstocks include crop residues, algae, municipal waste, jatropha grown on degraded land, and by-products of edible oil production. Policy options that would encourage use of ...


Food Security And Biofuels Development: The Case Of China, Fengxia Dong Oct 2007

Food Security And Biofuels Development: The Case Of China, Fengxia Dong

CARD Briefing Papers

Biofuels production is expanding rapidly all over the world, driven by rising crude oil prices, the desire of countries to be energy independent, and concerns about climate change. As developed countries, especially the United States, are expanding biofuels production, developing countries are expanding their biofuels industries as well, to power their growing economies. However, developing countries must address the food security issue when they develop biofuels. As China is a developing country with rapid economic growth, population growth, significant demand for fuels, and food security concerns, it serves as a good example for studying the opportunities and challenges faced by ...


A Comparative Analysis Of The Development Of The United States And European Union Biodiesel Industries, Miguel Carriquiry Jul 2007

A Comparative Analysis Of The Development Of The United States And European Union Biodiesel Industries, Miguel Carriquiry

CARD Briefing Papers

Worldwide production of biodiesel is growing at a rapid pace. Arguably, the European Union (EU) is the global leader in biodiesel production, but the United States has recently expanded its production. The growth of the biodiesel industry in both regions has been fueled by a series of government-provided financial incentives. However, the timing of the growth and incentive provisions, the nature of the main incentives, and the market conditions differ across regions. This article provides a comparative analysis of the EU and U.S. biodiesel industries, highlighting market and policy aspects that are leading to a rapid but distinct growth.


The Long-Run Impact Of Corn-Based Ethanol On The Grain, Oilseed, And Livestock Sectors: A Preliminary Assessment, Amani E. Elobeid, Simla Tokgoz, Dermot J. Hayes, Bruce A. Babcock, Chad E. Hart Nov 2006

The Long-Run Impact Of Corn-Based Ethanol On The Grain, Oilseed, And Livestock Sectors: A Preliminary Assessment, Amani E. Elobeid, Simla Tokgoz, Dermot J. Hayes, Bruce A. Babcock, Chad E. Hart

CARD Briefing Papers

The ongoing growth of corn-based ethanol production raises some fundamental questions about what impact continued growth will have on U.S. and world agriculture. Estimates of the long-run potential for ethanol production can be made by calculating the corn price at which the incentive to expand ethanol production disappears. Under current ethanol tax policy, if the prices of crude oil, natural gas, and distillers grains stay at current levels, then the break-even corn price is $4.05 per bushel. A multi-commodity, multi-country system of integrated commodity models is used to estimate the impacts if we ever get to $4.05 ...


How Much "Safety" Is Available Under The U.S. Proposal To The Wto?, Bruce A. Babcock, Chad E. Hart Nov 2005

How Much "Safety" Is Available Under The U.S. Proposal To The Wto?, Bruce A. Babcock, Chad E. Hart

CARD Briefing Papers

Critics of the U.S. proposal to the World Trade Organization (WTO) made in October 2005 are correct when they argue that adoption of the proposal would significantly reduce available support under the current farm program structure. Using historical prices and yields from 1980 to 2004, we estimate that loan rates would have to drop by 9 percent and target prices would have to drop by 10 percent in order to meet the proposed aggregate Amber Box and Blue Box limits. While this finding should cheer those who think that reform of U.S. farm programs is long overdue, it ...


Dairy Markets In Asia: An Overview Of Recent Findings And Implications, John C. Beghin Sep 2005

Dairy Markets In Asia: An Overview Of Recent Findings And Implications, John C. Beghin

CARD Briefing Papers

This paper is an overview of important findings regarding the ongoing evolution of Asian dairy markets based on a series of new economic investigations. These investigations provide systematic empirical foundations for assessing Asian dairy markets with their new consumption patterns, changing industries, and trade prospects under different domestic and trade policy regimes. The findings are drawn from four case studies (China, India, Japan, and Korea), as well as a prospective analysis of future regional patterns of consumption and a policy analysis of trade liberalization of Asian dairy markets. The overview distills the findings of these new investigations and integrates them ...


Arpa Subsidies, Unit Choice, And Reform Of The U.S. Crop Insurance Program, Bruce A. Babcock, Chad E. Hart Feb 2005

Arpa Subsidies, Unit Choice, And Reform Of The U.S. Crop Insurance Program, Bruce A. Babcock, Chad E. Hart

CARD Briefing Papers

The Agricultural Risk Protection Act (ARPA) has largely met its objectives of inducing farmers to increase their use of the crop insurance program. Both insured acreage and coverage levels have increased dramatically in response to ARPA's large increase in premium subsidies. An unintended consequence of the larger subsidies is a dramatic increase in the incentive for farmers to insure their crops under optional units, that is, insurance at the field level rather than at the farm or crop level. The expected rate of return to farmers who choose to invest additional premium dollars to move to optional unit coverage ...


Loan Deficiency Payments Versus Countercyclical Payments: Do We Need Both For A Price Safety Net?, Chad E. Hart, Bruce A. Babcock Feb 2005

Loan Deficiency Payments Versus Countercyclical Payments: Do We Need Both For A Price Safety Net?, Chad E. Hart, Bruce A. Babcock

CARD Briefing Papers

The federal government currently runs two major price support programs in agriculture, the marketing loan and countercyclical payment (CCP) programs. While these programs are both targeted at providing producer price protection, they have different political and financial costs associated with them. We outline these costs and project the effects of various loan rate changes on these programs for eight crops (barley, corn, cotton, oats, rice, sorghum, soybeans, and wheat) for 2005. Loan rate changes affect the price support programs by changing the payment rate producers receive when payments are triggered. We find that the crop's relative price strength versus ...


Risk Management Instruments For Water Reallocations, Chad E. Hart Feb 2005

Risk Management Instruments For Water Reallocations, Chad E. Hart

CARD Briefing Papers

Federal and state governments are searching for programs and/or policies to deal with the risks linked with uncertainty in water supplies and demands. Within the United States, competition among agricultural, urban, and environmental concerns for water is increasing. Drought conditions and water use restrictions have, at times, limited water supplies for these varied uses. The federal government stands in a unique position as both a major supplier and demander of water. As such, the federal government has put forward several programs for water conservation, information, and usage. One area in which the federal government has not made significant progress ...


Rethinking Agricultural Domestic Support Under The World Trade Organization, Chad E. Hart, John C. Beghin Nov 2004

Rethinking Agricultural Domestic Support Under The World Trade Organization, Chad E. Hart, John C. Beghin

CARD Briefing Papers

This paper focuses on the third pillar of the Uruguay Round Agreement on Agriculture (URAA) of the World Trade Organization (WTO), the discipline of agricultural domestic support. The paper examines the current definition of agricultural domestic support used by the WTO, focusing on the Aggregate Measure of Support (AMS) and other forms of support that are less to least distorting (Blue and Green Box payments). The analysis looks at the recent experience of four member states (the United States, the European Union, Japan, and Brazil). The structure of recent support varies considerably by country. Some countries, notably the United States ...


Agricultural Trade And The Doha Round: Lessons From Commodity Studies, John C. Beghin, Ataman Aksoy Jul 2003

Agricultural Trade And The Doha Round: Lessons From Commodity Studies, John C. Beghin, Ataman Aksoy

CARD Briefing Papers

While global analytical approaches to agricultural trade liberalization yield large gains for most economies, there are substantial variations in the policy regimes across commodities. To clarify the multiplicity of distortions and impacts, the World Bank's Trade Department undertook a series of commodity studies. The studies highlight the important challenges faced by negotiating countries in the Doha Round of the World Trade Organization (WTO) trade negotiations. The studies provide a sharper look at the North-South dimensions of the agricultural trade debate, with the North's trade barriers, domestic support, and tariff escalation. They also underscore the South-South challenges on border ...


Lessons From The Danish Ban On Feed-Grade Antibiotics, Dermot J. Hayes, Helen H. Jensen Jun 2003

Lessons From The Danish Ban On Feed-Grade Antibiotics, Dermot J. Hayes, Helen H. Jensen

CARD Briefing Papers

McDonald's Corporation, one of the largest buyers of meat in the U.S. fast-food industry, recently adopted a policy that prohibits its direct suppliers from using medically important antibiotics as growth promotants in food animals after 2004. Although the implications of such a voluntary ban in the United States remain to be seen, recent experiences in Denmark provide some comparable evidence on the effects for hog production. An economic analysis, compiled from information gleaned from interviews with Danish veterinarians, farmers, economists, and industry analysts, estimates the economic costs of an antibiotics ban on pork producers in the United States ...


Farmer-Owned Brands?, Dermot J. Hayes, Sergio H. Lence, Andrea Stoppa Mar 2003

Farmer-Owned Brands?, Dermot J. Hayes, Sergio H. Lence, Andrea Stoppa

CARD Briefing Papers

The paper lays out the economic arguments in favor of the establishment of farmer-owned brands in midwestern agriculture and presents four case studies based on successful efforts in this area in the United States and European Union. The case studies involve Parma Ham, Brunello di Montalcino wine, Vidalia onions, and a third-party verification organization. The studies show that these brands can be profitable for farmers and emphasize the importance of restricting the supply of any successful brand. One of the case studies shows that this type of supply control can conflict with antitrust regulations.


Quality Management And Information Transmission In Cattle Markets: A Case Study Of The Chariton Valley Beef Alliance, Brent M. Hueth, John D. Lawrence Nov 2002

Quality Management And Information Transmission In Cattle Markets: A Case Study Of The Chariton Valley Beef Alliance, Brent M. Hueth, John D. Lawrence

CARD Briefing Papers

The declining share of beef in total U.S. meat consumption has motivated industry-­wide efforts to improve average beef quality through more effective coordination among the various market participants. Increased use of explicit "grid" pricing mechanisms over the last decade represents initial efforts at improved coordination. More recent efforts include animal­specific carcass data collection, with subsequent transmission to feeders and the relevant cow­calf operations, and improved "source verification" procedures aimed at (among other things) reducing the overall cost of medical treatment for live animals. None of these organizational innovations is costless; indeed, a number of significant barriers ...


An Initial Analysis Of Adoption Of Animal Welfare Guidelines On The U.S. Egg Industry, Bruce A. Babcock, John A. Miranowski, Roxana Carbone Aug 2002

An Initial Analysis Of Adoption Of Animal Welfare Guidelines On The U.S. Egg Industry, Bruce A. Babcock, John A. Miranowski, Roxana Carbone

CARD Briefing Papers

Animal welfare activists have succeeded in persuading egg purchasers to purchase only eggs that are produced according to new animal welfare guidelines. This agreement will increase the cost of producing eggs that are sold in the shell. To date, the guidelines do not apply to eggs that are broken and further processed. This agreement creates a bifurcated market: high-cost eggs in the shell and low-cost eggs that are processed. We conduct a qualitative analysis of the effects on consumers and producers from creation of this new market structure. Restricting the movement of low-cost eggs into the in-shell market in periods ...


Construction Of A "Green Box" Countercyclical Program, Bruce A. Babcock, Chad E. Hart Oct 2001

Construction Of A "Green Box" Countercyclical Program, Bruce A. Babcock, Chad E. Hart

CARD Briefing Papers

The United States Congress is currently devising the next farm bill. One of the many factors influencing the debate is the effect of trade agreements into which the United States has entered. Under the World Trade Organization's Agreement on Agriculture, government spending on trade-distorting agricultural policies (referred to as "amber box" policies) has been limited. However, if the policy is considered non-trade-distorting ("green box"), then spending on such a policy is not constrained under the agreement. We explore the possible construction of a green box policy that is countercyclical to factors related to agriculture. The policy is based on ...


Effects Of Adding A Target Revenue Program And Soybean Fixed Decoupled Payments To Current Farm Programs, Chad E. Hart, Bruce A. Babcock Sep 2001

Effects Of Adding A Target Revenue Program And Soybean Fixed Decoupled Payments To Current Farm Programs, Chad E. Hart, Bruce A. Babcock

CARD Briefing Papers

This paper provides a one-year forward-looking analysis of a revenue countercyclical farm program. The basis for the revenue countercyclical farm program originates from the National Corn Growers Association's (NCGA) farm bill proposal. We explore several options under this program. The options consist of various crop loan rate levels for corn and soybeans. The amount and distribution of payments to producers under the various NCGA options and the Agricultural Act of 2001 (House Resolution 2646) are examined and compared against expected payments under the current array of farm programs.


Conservation Payments: Challenges In Design And Implementation, Bruce A. Babcock, John C. Beghin, Michael D. Duffy, Hongli Feng, Brent M. Hueth, Catherine L. Kling, Lyubov A. Kurkalova, Uwe A. Schneider, Silvia Secchi, Quinn Weninger, Jinhua Zhao Jun 2001

Conservation Payments: Challenges In Design And Implementation, Bruce A. Babcock, John C. Beghin, Michael D. Duffy, Hongli Feng, Brent M. Hueth, Catherine L. Kling, Lyubov A. Kurkalova, Uwe A. Schneider, Silvia Secchi, Quinn Weninger, Jinhua Zhao

CARD Briefing Papers

As Congress develops new farm legislation, some are lobbying for a new partnership between U.S. taxpayers and farmers. In exchange for an annual transfer of $10 to $20billion from taxpayers to agriculture, farmers would do much more to enhance environmental quality. An attractive feature of a new partnership is that paying for an improved environment provides a clear and justifiable rationale for farm program payments, something that is lacking under current farm programs. By changing management practices and land use, farmers can provide cleaner water, cleaner air, better wildlife habitat, lower net greenhouse gas emissions, and improved long-run soil ...


Impact Of A 10 Percent Decrease In Planted Acreage Of All U.S. Program Crops, Food And Agricultural Policy Research Institute, Bruce A. Babcock, John C. Beghin, Frank H. Fuller, Jacinto F. Fabiosa, Cheng Fang, Chad E. Hart, Holger Matthey, Stéphane De Cara May 2001

Impact Of A 10 Percent Decrease In Planted Acreage Of All U.S. Program Crops, Food And Agricultural Policy Research Institute, Bruce A. Babcock, John C. Beghin, Frank H. Fuller, Jacinto F. Fabiosa, Cheng Fang, Chad E. Hart, Holger Matthey, Stéphane De Cara

CARD Briefing Papers

In response to a request from Senator Tom Harkin, the Food and Agricultural Policy Research Institute (FAPRI) evaluated the effects of a uniform 10 percent reduction in program crop acreage in the United States. Specifically, FAPRI analyzed the effects on price, trade, consumption, and production in the eight program-crop markets and all related markets. FAPRI also investigated both the domestic and international implications of this reduction in U.S. planted area. In particular, FAPRI analyzed whether a decrease in U.S. production would be accommodated by a decrease in domestic use and inventories and corresponding changes in foreign production, use ...


Implications Of The Wto On The Redesign Of U.S. Farm Policy, Chad E. Hart, Bruce A. Babcock May 2001

Implications Of The Wto On The Redesign Of U.S. Farm Policy, Chad E. Hart, Bruce A. Babcock

CARD Briefing Papers

The WTO commitments made by the United States are often cited as being an important constraint on the design of future U.S. farm programs. Many, however, are confused about the U.S. commitments and their future importance. In this paper, the authors attempt to fill this gap in understanding by providing a detailed explanation of the WTO agreement and estimates of whether the United States has fully complied with its WTO commitments in recent years. In addition, the authors project the degree of compliance through the 2002 marketing year and examine new alternative program proposals to determine how they ...


Counter-Cyclical Agricultural Program Payments: Is It Time To Look At Revenue?, Chad E. Hart, Bruce A. Babcock Dec 2000

Counter-Cyclical Agricultural Program Payments: Is It Time To Look At Revenue?, Chad E. Hart, Bruce A. Babcock

CARD Briefing Papers

This paper examines the Supplemental Income Payments for Producers (SIPP) program, a proposal to adjust the current federal farm program to react to declines in farm revenue. The SIPP program, as currently outlined, would provide farmers assistance when current national revenue for a crop falls below a set percentage of historical national revenue for the crop. The authors explore the implications of changing the percentage of revenue and/or the level of revenue covered (national, state, county, etc.). Revenue guarantees based on the futures markets rather than past revenue outcomes are also discussed.


Outlook For Grain And Oilseed Export Shipments From The Upper Mississippi River Basin, John C. Beghin, Bruce A. Babcock, Robert E. Young Ii, Patrick C. Westhoff Aug 2000

Outlook For Grain And Oilseed Export Shipments From The Upper Mississippi River Basin, John C. Beghin, Bruce A. Babcock, Robert E. Young Ii, Patrick C. Westhoff

CARD Briefing Papers

In response to a request by Senator Tom Harkin, the Food and Agricultural Policy Research Institute (FAPRI) has evaluated a number of issues related to the lock and dam system on the Upper Mississippi and Illinois Rivers. One critical issue is how future demand for agricultural exports will affect the demand for river transportation services. This paper sketches a theoretical framework for economic decision-making regarding the upgrade of the lock and dam system of the Upper Mississippi River and then compares export projections underlying analyses by the U.S. Army Corps of Engineers (USACE) with recent projections by FAPRI and ...


Time For A New Farmer-Owned Reserve?, Chad E. Hart, Bruce A. Babcock Aug 2000

Time For A New Farmer-Owned Reserve?, Chad E. Hart, Bruce A. Babcock

CARD Briefing Papers

Because of low harvest prices over the last three years, several congressmen and agricultural advisors are calling for increased government involvement in grain stock management in the belief that the government should remove grain from the market when prices are low and return it to the market when prices recover. Proposals for government involvement run from a simple extension of the loan period to the establishment of a new Farmer-Owned Reserve (FOR) program, whereby the government subsidizes long-term storage of grain. To gain insight into whether government involvement in grain markets should increase, the authors discuss various lessons that can ...


What Do Livestock Feeders Want From Seed Corn Companies?, Bruce A. Babcock, Noah Wendt Apr 2000

What Do Livestock Feeders Want From Seed Corn Companies?, Bruce A. Babcock, Noah Wendt

CARD Briefing Papers

It is unlikely that livestock producers will be willing to pay premium prices for genetically modified feed corn. Three factors support this assertion. (1) Historically, livestock producers have demanded minimum-quality feed at the lowest price possible. They haven't been willing to pay extra for feed customized to specialized needs. (2) Feed containing synthetic additives will likely face strong price competition from traditional feed additive industries. (3) Establishing processing and transportation systems to handle genetically modified feed corn will incur significant startup costs, which will be passed along to customers. The authors provide data on the benefits and values of ...


Potential Market For Non-Gmo Corn And Soybeans, Bruce A. Babcock, John C. Beghin Oct 1999

Potential Market For Non-Gmo Corn And Soybeans, Bruce A. Babcock, John C. Beghin

CARD Briefing Papers

Demand for non-GMO (genetically modified organism) corn and soybeans is high in the EU and Japan, which are two of the largest markets for U.S. corn and soybeans. This presents a potential problem for markets if U.S. processors find themselves scrambling to locate and purchase non-GMO crops. By looking at how the 1998 U.S. corn and soybean crops were used, Babcock and Beghin project possible demand in the 99/00 marketing year for non-GMO corn and soybeans.


Availability And Market Penetration Of Gmo Corn And Soybeans, Bruce A. Babcock, Michael D. Duffy, Robert N. Wisner Oct 1999

Availability And Market Penetration Of Gmo Corn And Soybeans, Bruce A. Babcock, Michael D. Duffy, Robert N. Wisner

CARD Briefing Papers

The authors survey various types of GMO (genetically modified organism) corn and soybeans, including both pest-resistant and herbicide-resistant varieties, and then evaluate the extent to which farmers have begun to use GMO crops. Figures cited include percentages of acres planted with GMO crops, as well as comparisons of non-GMO versus GMO yields.


Whither Farm Policy?, Bruce A. Babcock Sep 1999

Whither Farm Policy?, Bruce A. Babcock

CARD Briefing Papers

Under conditions that saw farm policy come under increasing criticism in the fall of 1999, this paper asks readers to take a closer look at what farm policy should accomplish. Babcock describes the various interest groups calling for farm policy reform, reviews three reasons for implementing farm policy, recounts the history and programs of the FAIR (Freedom to Farm) Act, and proposes policy alternatives that would allow for the agriculture industry to be flexible and competitive.


Analysis Of The Berlin Accord Reforms Of The European Union's Common Agricultural Policy, Food And Agricultural Policy Research Institute, Bruce A. Babcock, John C. Beghin, Samarendu Mohanty, Frank H. Fuller, Jacinto F. Fabiosa, Sudhir Chaudhary, Phillip Kaus, Cheng Fang, Chad E. Hart, Karen P. Kovarik Jun 1999

Analysis Of The Berlin Accord Reforms Of The European Union's Common Agricultural Policy, Food And Agricultural Policy Research Institute, Bruce A. Babcock, John C. Beghin, Samarendu Mohanty, Frank H. Fuller, Jacinto F. Fabiosa, Sudhir Chaudhary, Phillip Kaus, Cheng Fang, Chad E. Hart, Karen P. Kovarik

CARD Briefing Papers

This paper briefly summarizes the impacts of the European Union's Common Agricultural Policy (CAP) reforms on the European agricultural sector and on international agricultural trade. Objectives of the CAP reform (as stated in EU Commission documents) are to ensure the environmental viability of European agriculture and to protect the livelihood of European farmers. An extensive Appendix provides data on the impact of Agenda 2000 on various commodities.


Provision Of A Safety Net For U.S. Agriculture, Bruce A. Babcock Apr 1999

Provision Of A Safety Net For U.S. Agriculture, Bruce A. Babcock

CARD Briefing Papers

Provides insight into three current agricultural risk management policy issues: (1) What are the benefits to farmers of utilizing agricultural insurance products? (2) How do commodity loan rates complement or not the benefits of insurance coverage? (3) What are the incentives for producers to include insurance products in their risk management strategies?