Ethanol and field crops: Is there a price connection?
Data
31.08.2016
31.08.2016
Autori
Parole chiave:
Ethanol, Field crops, Granger causality, Forecasting, Structural breaks
Ethanol, Field crops, Granger causality, Forecasting, Structural breaks
JOURNAL
"Food Policy", Volume 63 (August 2016)
"Food Policy", Volume 63 (August 2016)
We analyze the relationship between the prices of ethanol, corn, soybeans, wheat and cattle in Nebraska, U.S. We focus on long-run price relations, short-run Granger causality, in-sample and out-of-sample predictability linkages between returns on ethanol, field crops and cattle. Since the ethanol market has been subject to many policy interventions, our analysis takes structural breaks and parameter instabilities into account using modern statistical techniques. We find no evidence that ethanol returns Granger cause food price variations. Conversely, both in-sample and out-of-sample results suggest that ethanol is Granger caused and can be predicted by returns on corn. No linkages between ethanol and cattle are found.