Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Climate change, biofuels mandate would cause corn price spikes

24.04.2012
A study from Purdue and Stanford university researchers predicts that future climate scenarios may cause significantly greater volatility in corn prices, which would be intensified by the federal biofuels mandate.
The findings, published this week in the journal Nature Climate Change, show that severely hot conditions in corn-growing regions and extreme climate events that are expected to impact supply would cause swings in corn prices. When coupled with federal mandates for biofuel production, the price volatility could increase by about 50 percent over the period from 2020-2040 as compared to recent history.

"There could be quite a substantial increase in yield volatility, and that's due to the increased frequency and intensity of the high temperatures throughout the Corn Belt," said Thomas Hertel, a Purdue distinguished professor of agricultural economics. "Closer integration of the corn and energy markets through the ethanol industry could aid in buffering these shocks, but this would not occur in the presence of a mandate."

Under current rules, the federal government requires an increasing amount of ethanol and other biofuels be produced each year and blended with gasoline. Currently 39 percent of the nation's corn crop is used for ethanol, of which about one-third returns to the food system in the form of by-products fed to livestock.

The study used a high-resolution climate model for the United States that takes into account climate history to produce 25-kilometer "snapshots" of the Midwest under projected future climate scenarios, Hertel said. Five simulations from 1950-2040 were combined to estimate future temperature extremes. Those predictions were paired with a model that uses temperature, precipitation and technology trends to predict corn yields.

The study finds that even if temperatures stay within the internationally recognized climate change target – a limit of 3.6 degrees Fahrenheit above pre-industrial levels – global warming is still enough to make damaging heat waves much more common over the U.S. Corn Belt.
"Severe heat is the big hammer," said Noah Diffenbaugh, assistant professor of earth sciences at Stanford University and a study co-author. "We find that even one or two degrees of global warming is likely to increase heat waves enough to cause much higher frequency of low-yield years, leading to greater volatility of corn prices."

Using Purdue's Global Trade Analysis Project model and ignoring potential adaptations, the researchers predicted U.S. corn price volatility over the 2020-2040 period as compared with the 1980-2000 period. This increase would be further exacerbated by biofuel mandates, which would result in a further 50 percent increase in price volatility, Hertel said.

Under the projection, prices would rise in years when corn yields are hurt by extremely hot days. Hertel said that ethanol plants, forced to meet the federal mandate for biofuel production, would be forced to bid up corn prices in order to meet the blend requirement, thereby exacerbating the effect of the production shortfall on livestock producers and consumers.

Hertel said the study holds all other factors constant. It's possible that plant breeding to raise the temperature threshold at which yield losses occur, increased stockholding activities by farmers and agribusinesses, shifting growing areas northward, or changes in federal regulations could moderate the projected increases in price volatility. Finally, the study assumes that the so-called "blend wall," which has played a key role in limiting increases in ethanol use in gasoline, would be relaxed as the automobile stock is modernized.
The U.S. Department of Energy's Office of Science funded Hertel and Diffenbaugh's work.

Writer: Brian Wallheimer, 765-496-2050, bwallhei@purdue.edu
Sources: Thomas Hertel, 765-494-4199, hertel@purdue.edu
Noah Diffenbaugh, 650-725-7510, diffenbaugh@stanford.edu

Ag Communications: (765) 494-2722;
Keith Robinson, robins89@purdue.edu
Agriculture News Page

Brian Wallheimer | EurekAlert!
Further information:
http://www.purdue.edu

Further reports about: Belt Climate change Corn Corn Belt corn yields fuel production global warming heat waves

More articles from Studies and Analyses:

nachricht The Great Unknown: Risk-Taking Behavior in Adolescents
19.01.2017 | Max-Planck-Institut für Bildungsforschung

nachricht A sudden drop in outdoor temperature increases the risk of respiratory infections
11.01.2017 | University of Gothenburg

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Traffic jam in empty space

New success for Konstanz physicists in studying the quantum vacuum

An important step towards a completely new experimental access to quantum physics has been made at University of Konstanz. The team of scientists headed by...

Im Focus: How gut bacteria can make us ill

HZI researchers decipher infection mechanisms of Yersinia and immune responses of the host

Yersiniae cause severe intestinal infections. Studies using Yersinia pseudotuberculosis as a model organism aim to elucidate the infection mechanisms of these...

Im Focus: Interfacial Superconductivity: Magnetic and superconducting order revealed simultaneously

Researchers from the University of Hamburg in Germany, in collaboration with colleagues from the University of Aarhus in Denmark, have synthesized a new superconducting material by growing a few layers of an antiferromagnetic transition-metal chalcogenide on a bismuth-based topological insulator, both being non-superconducting materials.

While superconductivity and magnetism are generally believed to be mutually exclusive, surprisingly, in this new material, superconducting correlations...

Im Focus: Studying fundamental particles in materials

Laser-driving of semimetals allows creating novel quasiparticle states within condensed matter systems and switching between different states on ultrafast time scales

Studying properties of fundamental particles in condensed matter systems is a promising approach to quantum field theory. Quasiparticles offer the opportunity...

Im Focus: Designing Architecture with Solar Building Envelopes

Among the general public, solar thermal energy is currently associated with dark blue, rectangular collectors on building roofs. Technologies are needed for aesthetically high quality architecture which offer the architect more room for manoeuvre when it comes to low- and plus-energy buildings. With the “ArKol” project, researchers at Fraunhofer ISE together with partners are currently developing two façade collectors for solar thermal energy generation, which permit a high degree of design flexibility: a strip collector for opaque façade sections and a solar thermal blind for transparent sections. The current state of the two developments will be presented at the BAU 2017 trade fair.

As part of the “ArKol – development of architecturally highly integrated façade collectors with heat pipes” project, Fraunhofer ISE together with its partners...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Sustainable Water use in Agriculture in Eastern Europe and Central Asia

19.01.2017 | Event News

12V, 48V, high-voltage – trends in E/E automotive architecture

10.01.2017 | Event News

2nd Conference on Non-Textual Information on 10 and 11 May 2017 in Hannover

09.01.2017 | Event News

 
Latest News

Global threat to primates concerns us all

19.01.2017 | Ecology, The Environment and Conservation

Scientist from Kiel University coordinates Million Euros Project in Inflammation Research

19.01.2017 | Awards Funding

The Great Unknown: Risk-Taking Behavior in Adolescents

19.01.2017 | Studies and Analyses

VideoLinks
B2B-VideoLinks
More VideoLinks >>>