Essays on the Effect of Biofuels on Agricultural Markets
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Date
2014-04-23
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Abstract
Corn and soybean meals are major feed ingredients for livestock producers. The
first part of the research studies the effects of renewable fuel standard mandate on the
U.S. beef and dairy sectors. A dynamic and recursive partial equilibrium model was
developed to study the effect of renewable fuel standards on beef and dairy sectors. The
study finds that feed cost shocks have significant impact at feedlot level and relatively
less effect for cow-calf and milk producers. No major changes were found at the retail
level. Given the projected corn prices are expected to be lower in the coming decade
than the record high price observed in 2011, the results also suggest that the higher
returns provide economic incentives for expansion of the beef and dairy sectors in the
future.
The second part of the research employs an application of hedonic pricing model
for whole algae and post-extracted algae residue meal for aquaculture. Prices and
nutritional characteristics of commonly applied aquaculture feed ingredients are used to
determine the value of whole algae and post extracted algae residue based on its dietary
composition. The research finds that whole algae will have value higher than that of
soybean meal and lower than that of menhaden fishmeal. The results also indicate that
post extracted algae residue will have value lower than that of soybean meal and
menhaden fishmeal.
The third part of this research estimates the economic feasibility of biofuel
production and high value squalene from a tobacco biomass. Pro-forma stochastic
financial statements were constructed and the feasibility of multi-year financial projects were evaluated. The results suggest the commercialization of biofuel production from tobacco is unrealistic. The results also indicate the economic feasibility of high value squalene is realistic under the certain conditions.
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Keywords
Biofuels, Renewable Fuel Standards, Hedonics, Economic Feasibility