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Abstract:The rapid upward shift in ethanol demand has raised concerns about ethanol's impact on the price level and volatility of agricultural commodities. The popular press attributes much of this volatility in commodity prices to a price bubble in ethanol fuel and recent deflation. Market economics predicts not only a softening of demand to high commodity prices but also a positive supply response. This volatility in ethanol and commodity prices are investigated using cointegration, vector error corrections (VECM), and multivariate generalized autoregressive conditional heteroskedascity (MGARCH) models. In terms of derived demand theory, results support ethanol and oil demands as derived demands from vehicle-fuel production. Gasoline prices directly influence the prices of ethanol and oil. However, of greater significance for the fuel versus food security issue, results support the effect of agricultural commodity prices as market signals which restore commodity markets to their equilibriums after a demand or supply event (shock). Such shocks may in the short-run increase agricultural commodity prices, but decentralized freely operating markets will mitigate the persistence of these shocks. Results indicate in recent years there are no long-run relations among fuel (ethanol, oil and gasoline) prices and agricultural commodity (corn and soybean) prices.

We examine the effects of local immigration enforcement efforts on U.S. agriculture in dozens of U.S. counties from 2002–2010 by using variations in the timing of adoption of 287(g) programs, which permit local police to enforce immigration law. Difference‐in‐differences models using microdata from the American Community Survey (2005–2010 waves) and county tabulations from the Census of Agriculture (1997, 2002, and 2007) yield robust evidence that county enforcement efforts have reduced immigrant presence in adopting jurisdictions. We also find evidence that wages of farm workers, patterns of farm labor use, output choices, and farm profitability may have been affected in a manner consistent with farm labor shortages.

This study uses farm‐level data from the Illinois Farm Business Farm Management Association to determine whether the variability of net farm income is significantly influenced by farm size, financial structure, and other structural characteristics of farm businesses. The econometric results indicate that under a cross‐sectional model the relative variability of real net farm income is not significantly influenced by farm size, measured either by acreage or value of farm production. However, under a time‐series/cross‐section model, periodic variations in farm size, along with differences in the relative crop price received, crop yield, degree of enterprise diversification, and geographic location, can significantly influence changes in farm income variability.

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