Progress 10/01/04 to 09/30/11
Outputs
OUTPUTS: Activities: 1) Empirical research on the overall impact of ethanol production of average US corn prices was conducted. 2)Empirical work on the price performance of dairy futures markets was conducted. 3) Work on the impacts of bio-fuel plant location on local corn prices was conducted. 4) Research and empirical estimation of the factors that lead to the locating of a bio-diesel plant was conducted. 5) The role of speculators in dairy futures markets was evaluated. Events and Dissemination: One paper (from the work cited above) presented at the NCR134 conference on Price Applied Commodity Price Risk Analysis, Forecasting, and Market Risk Management April 2010. Presentation on performance issues related to of dairy futures markets was presented by invitation to a joint meeting of the Commodity Futures trading Commission and USDA in Washington DC. Keynote speech on feedstocks and price volatility at the Novaspeck Bio-energy Conference. Presentation on bio-energy feedstock issues at the annual Wisconsin Bio-energy Initiative Conference. Presentation at Wisconsin Corn/Soy Expo on commodity markets and pricing opportunities. Several presentations to agricultural producer groups on market outlook. Consulted with various investor groups, North Prairie Productions, Landmark, C5-6, Novaspeck, and Virent regarding current of future environment of bio-fuels markets. Products: Two journal articles (currently in revise and re-submit status) at the American Journal of Agricultural Economics PARTICIPANTS: Marin Bozic, PHD student and RA in the Department of Agricultural and Applied Economics at UW-Madison TARGET AUDIENCES: Academics, Agribusinesses, agricultural producers, community decision makers PROJECT MODIFICATIONS: Not relevant to this project.
Impacts
The work on dairy pricing was done at the request of USDA, and will be used in formulating responses to various policy initiatives from both industry and congress. The bio energy work continues to be cited and used in formulating both state and national bio energy policy. The two studies on bio-fuel plant locations have contributed to a better understanding on the part of communities of both the opportunities and constraints associated with attracting a bio-energy plant.
Publications
- Bozic, Marin and T. Randall Fortenbery. "Theory of Storage and Option Pricing: Analyzing Determinants of Implied Skewness and Implied Kurtosis," Proceedings of the NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management, April 2010.
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Progress 01/01/09 to 12/31/09
Outputs
OUTPUTS: Output included several presentations at meetings of various clientele in Wisconsin, presentations at national research conferences, publications, and interviews with various types of media. In addition, I provided input to both the Wisconsin Legislative Council on Bio-Fuels, and the Low Carbon Fuels Advisory Committee of the Mid-West Governor's Association. PARTICIPANTS: Participants included Hwanil Park and Marin Bozic. TARGET AUDIENCES: Bio-fuels researchers, USDA, State Legislatures, Mid-West Governors, researchers focused on commodity markets, agricultural producers, agribusiness. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Much of my work was shared with the Wisconsin Legislative Council on Bio-fuels, and contributed to the policy initiates that came forth from that group. In addition, I have been active with the Low Carbon Fuels Advisory Committee for the Midwest Governor's Association. Work was also presented to several community groups making local policy decisions. In addition, research papers were presented at the Southern Agricultural Economics Association Annual Meetings in Atlanta, the Emerson Exchange in Denver, Early Riser Session - Corn and Soy Market Strategies, Corn-Soy Expo, Wisconsin Dells, January 30, Wisconsin Regional Corn Conferences, Jan. 20,21,and 22, Mound Bank in Platteville, February 11, Biofuels in Aviation Conference, Washington DC, Bio-Forward Annual Meeting, Madison, and the Wisconsin Bioenergy Initiative Summit, Madison, October 29. In addition, I did a radio show and several interviews with print media.
Publications
- Fortenbery, T. Randall. Commodity Price Discovery: Problems that have Solutions, or Solutions that are Problems. Agricultural and Applied Economics, Vol 41, No. 2. 2009.
- Fortenbery, T. Randall. Outlook for Corn and Soybeans, Status of Wisconsin Agriculture, January 2009.
- Fortenbery, T. Randall and Timothy Donahue. Opportunities and Challenges for Next Generation Biofuels, ed. Controversies in Science and Technology: From Evolution to Energy. Forthcoming 2010.
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Progress 01/01/08 to 12/31/08
Outputs
OUTPUTS: Presented work at 6 professional conferences and 25 meetings with the general public. Completed work related to speculative impacts on commodity price volatility, and impact of ethanol production on national corn prices. Also began work related to the impact of ethanol production on local basis patterns. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Academics Agribusiness Journalists PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Much of my work was shared with the Wisconsin Legislative Council on Bio-fuels, and contributed to the policy initiates that will be forthcoming from that group. Work was also presented to several community groups making local policy decisions. Presented papers included: Turnquist, Alan, T. Randall Fortenbery, and Jeremy Foltz (July 2008). Progress or Devastation The Effects of Ethanol Plant Location on Local Land Use. Presented at the 2008 AAEA Meetings, Orlando, FLA (presented by Fortenbery). Turnquist, Alan, T. Randall Fortenbery, and Jeremy Foltz (September 2008). Progress or Devastation The Effects of Ethanol Plant Location on Local Land Use. Presented at Growing the Bioeconomy, 2008 Bioeconomy Conference, Ames, IA (presented by Fortenbery). Fortenbery, T. Randall (October 2008). Biofuel Feedstock Production: Economic and Environmental Implications. Invited Paper Presented at Celebrating the International Year of Planet Earth, 2008 Joint Annual meeting of agronomists, soil scientists, hydrologists, and geologists. Fortenbery, T. Randall. Corn Outlook for 2008. Presented to the 2008 Wisconsin Regional Corn Conferences, Jan. 10, 21, 22. Fortenbery, T. Randall. Early Riser Session - Corn and Soy Market Strategies, Corn-Soy Expo, Wisconsin Dells, January 25. Fortenbery, T. Randall. Outlook for Corn and Soybean Markets, Hancock Experiment Station, January 28. Fortenbery, T. Randall. Understanding the Food vs. Fuel Controversy, Wisconsin Association of Professional Agricultural Associates, Arlington, March 6. Fortenbery, T. Randall. Presentation to the CALS Board of Visitors. April 10. Fortenbery, T. Randall. Understanding Energy Markets. UW-Alumni Founders Day Key Note Speech, Monroe, April 29. Fortenbery, T. Randall. Biofuels in Wisconsin - Opportunities and Risks. UW Alumni Association 50th Reunion. Madison, May 9. Fortenbery, T. Randall. Feedstock Dynamics: Moving From 1st to 2nd Generation Biofuels- Process Control Implications. 2008 Emerson Global Users Exchange, Washington, DC. September 30. Fortenbery, T. Randall. Economics of the Bio-Economy. Wisconsin Bioenergy Initiative Summit, Madison, October 24. Fortenbery, T. Randall. Food and Fuel - What are the Cost Drivers. CALS and DATCP Symposium on Energy, Food, and Climate, Madison, November 12. Fortenbery, T. Randall. Utility Use of Biofuels. PATS Bioenergy Summit, Madison, November 19. Fortenbery, T. Randall. Feedstock Challenges for Advanced Bio-Refineries. Novaspeck Bio-Refinery Summit, Madison, December 11.
Publications
- Fortenbery, T. Randall and Steve Deller (2008). Understanding Community Impacts: A Tool for Evaluating Economic Impacts from Local Bio-Fuels Production, Journal of Extension 46 (6).
- Brinker, Jennifer, Douglas Reinemann, Louis E. Armentano, T. Randall Fortenbery, and Michael A. Wattiaux (2008). Biofuel Production Based on Dairy Consumption of DDGS and Soybean Meal in Wisconsin. Farm Foundation, 2008.
- Fortenbery, T. Randall. Outlook for Corn and Soybeans, Status of Wisconsin Agriculture, January 2008.
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Progress 01/01/07 to 12/31/07
Outputs
Activities: 1) Empirical research on the overall impact of ethanol production of average US corn prices was conducted. 2) Empirical work on the value of farmer investments in corn-based ethanol plants as a hedge for corn production was conducted. 3) Work on the impacts of bio-fuel plant location on land values (ag and non-ag) was initiated. Events and Dissemination: Two papers (from the work cited above) presented at the NCR134 conference on Price Applied Commodity Price Risk Analysis, Forecasting, and Market Risk Management Presentation on the price impacts of ethanol at the 2007 World Food Expo Keynote speech on feedstocks and price volatility at the Novaspeck Bio-diesel Conference Presentation on ethanol price issues at the annual meeting of the Wisconsin Economics Association. Presentation at Wisconsin Corn/Soy Expo on commodity markets and pricing opportunities Presentations at regional corn conferences on corn markets TV program in Milwaukee on bio-energy Radio
program on WPR on community impacts of ethanol production Presentation at the Annual American Crop Insurers Conference on price impacts of ethanol Several presentations to agricultural producer groups on market outlook Presentation to the Wisconsin Assembly Bio-fuels Committee on community impacts of bio-fuels production Presentation to local Kiwanis Club on bio-fuels Presentation to the Wisconsin Biofuels Presentation to the CALS Board of Visitors on ethanol production and community impacts Presentation to Farm Credit on Biofuels Presentation on global bio-energy to investor group of Stewart Peterson Services: Consulted with various investor groups, North Prairie Productions, Landmark, C5-6, and Novaspeck regarding current of future environment of bio-fuels markets Products: Video on Market Outlook Basis forecasts on the RENK Agribusiness Institute website
Impacts
The project resulted in two main findings. First, it was shown that only a fraction of the recent increase in US corn prices is actually a result of ethanol production. Other factors include the value of the US dollar, and the market positions held by futures market speculators. Second, investing in an ethanol plant is not a good hedge for a corn producer's on farm risk. While the investment might be attractive, it is no more so for a producer than any other member of the community where the plat is being built.
Publications
- Park, Hwanil and T. Randall Fortenbery. The Effect of Ethanol Production on the US Corn Price, Proceedings of the NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management, April 2007.
- Fortenbery, T. Randall and Hector O. Zapata. Understanding Ethanol: Price Dynamics and Influence, Proceedings of the NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management, April 2007.
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