GoodFuels

Oil Prices Impact Food and Fuel More Than Policy

According to a new report by the University of Missouri Food and Agricultural Policy Research Institute (FAPRI), government biofuel policies affect fuel and farm commodity prices, but the price of a barrel of oil can have even larger effects.

“The impact of biofuel policies depends not just on the policy but very much on the market context,” said Pat Westhoff, FAPRI co-director.

“Mandates have little market impact when high petroleum prices contribute to high biofuel prices and production levels.” Westhoff said. “On the other hand, mandates can be important when petroleum prices are low or crop supplies are reduced.”

The report, “Biofuels: Impact of Selected Farm Bill Provisions and other Biofuel Policy Options,” was published online June 12.