Document Type

Thesis - Open Access

Award Date

2021

Degree Name

Master of Science (MS)

Department

Economics

First Advisor

Evert Van der Sluis

Keywords

Biofuel Policy, corn acreage intensification, Corn Production, Crop Rotation Patterns, GM Corn Diffusion, state heterogeneity

Abstract

The adoption of genetically modified (GM) crops, the rise of ethanol production that produced an additional derived demand for corn, and the increasingly prominent position of corn and soybeans in crop rotations embody major changes in U.S. agriculture during the past decades. This study investigates the linkages among these developments in two ways. First, we look at how biotechnology and biofuels have influenced cropping system changes in the Corn Belt region of the United States, using state-level data from 2000 to 2019. Second, we investigate the determinants of corn acreage intensification levels and heterogeneity at the state level using data from 2000 to 2017 for the same eleven Corn Belt states. In order to analyze these interconnections, we employed a linear mixed model to generate robust regression results estimates. In assessing the role of biotechnology and biofuels on U.S. Corn Belt cropping pattern changes, we find that (1) during this time period, farmers began to abandon relatively complex cropping patterns in favor of simpler crop rotation approaches; and (2) the widespread use of GM corn for biofuel appears to have had a positive impact on the increase in corn acres planted, although the consequences of biotech breakthroughs on producer planting decisions vary by state. As a result, future policy changes affecting farm-level corn production decisions are also likely to be varied. Further, in investigating the determinants of corn acreage intensification levels and heterogeneity in U.S. Corn Belt states, we find that (1) using the base regression model, the proliferation of GM crops, the implementation of renewable fuel regulations in the early 2000s, and the first lag of the relative corn to soybean price ratio all have positive effects on state-level corn acreage intensity; and (2) cropland released from the Conservation Reserve Program (CRP), a simple measurement of economies of scale, and the development of the ethanol production infrastructure are key contributors of corn acreage heterogeneity at the state level, while real cropland values – which partially represent cropland quality improvements such as tile drainage and irrigated agricultural acres – do not explain state-level corn acreage heterogeneity. Among the 11 Corn Belt states, Iowa had the largest increase in corn intensity of 7.6 percent over the period examined. Findings of this thesis back up and help explain well-documented shifts in cropping patterns, such as the loss of small grains and marginal lands in favor of corn and soybeans. Over a roughly two-decade period, this research sheds light on the determinants of corn acreage intensity levels and heterogeneity in Corn Belt states.

Number of Pages

73

Publisher

South Dakota State University

Rights

Copyright © Kenneth Annan

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