Cornhusker Economics: Price Volatility Transmission between U.S. Biofuel, Corn, and Oil Markets

Many factors have been suggested as sources of increased volatility (unexpected changes) in agricultural commodity prices in recent years. One of the most-stated causes is the increase in corn-based ethanol production and the new food and ethanol linkages (Serra, 2013; Balcombe, 2011; Wright, 2011; Irwin and Good, 2009). The increased links between energy and agricultural markets raise concerns about whether new corn–ethanol links lead to volatility-spillover effects between prices of energy and agricultural commodities. Increased food-price volatility and its detrimental effects have profound economic implications, raising concerns among consumers, producers, and policymakers. High price volatility heightens food security concerns for the poor and income stability issues for farmers. It adversely affects poor consumers’ incomes and purchasing power, pushing them further into poverty, undernourishment, and hunger. It makes it difficult for farmers to make production plans and investment decisions. The quick and unexpected changes in food prices can interrupt markets, affecting social stability and government policy. Hence, the massive increase in U.S. ethanol production raises the need for a deeper understanding of its effects on price volatility in food crops from which ethanol is produced. de Gorter, Drabik, and Just (2015) argue that studying these effects is important in order to understand changes in the prices of food, such as corn.​

 

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.