Ames, Iowa
June 28, 2006
The Center for
Agricultural and Rural Development (CARD) at
Iowa State University
is launching a new Biorenewables Policy Division effective
July 1.
The new research division will focus on policy questions
surrounding expansion of biorenewables in the United States
and the shifting playing field this creates for midwestern
producers. CARD is affiliated with Iowa State's Bioeconomy
Initiative.
Chad Hart, an economist and U.S. agricultural policy
analyst, will lead the new division. Hart has been with CARD
since 1999.
Rapid expansion of biorenewable products, including ethanol
and biodiesel, has sparked talk of an upcoming golden era
for agriculture, as society seeks alternatives to
petroleum-based products. If the boom continues, ethanol may
one day supplant feed as the number one use of corn.
The effects of these structural shifts will have profound
implications for farmers, as well as for consumers and
taxpayers. The new division will examine the long-term costs
and benefits for stakeholders.
For instance,
increased ethanol production has already increased corn
prices, making corn acres more profitable relative to
soybeans and wheat. Iowa livestock producers will thus face
higher corn prices and lower prices for distillers grains,
an ethanol by-product. This shift in feed prices could
result in more cattle and fewer hogs in Iowa.
The
Biorenewables Policy Division will build on the center's
strength in economic modeling and collaborative analysis.
For example, a new international ethanol model will be used
to project ethanol production, usage, prices and trade. This
model covers Brazil, China, the European Union, Japan and
the United States. It incorporates government policy, such
as the U.S. Energy Act and Brazilian fuel mandates.
CARD Director Bruce Babcock has set the following immediate
priority areas for the Biorenewables Policy Division:
-
outlook for biofuels and crops used for biofuels
production
-
analysis of policy changes such as the 2007 farm bill on
production and price of biofuels
- impact
of biofuels growth on the level and volatility of crop
prices
-
analysis of potential for value to be captured by
emergence of carbon markets
- impact
of biofuels growth on mix and location of livestock
-
impacts on local basis for corn and soybeans
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