The impact of ethanol plants on cropland values in the great plains

Purpose - Corn ethanol plants consume large amounts of corn and their location has the potential to alter local crop prices and surrounding agricultural land values. The purpose of this paper is to analyze the local economic impact of ethanol plant locations on farmland values.Design methodology app...

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Bibliographic Details
Published in:Agricultural finance review 2009-01, Vol.69 (1), p.36-48
Main Authors: Henderson, Jason, Gloy, Brent A.
Format: Article
Language:English
Subjects:
Agricultural commodities
Agricultural credit
Agricultural economics
Agricultural land
Agricultural production
Agriculture
biorefining
Central banks
Corn
Costs
crop production
cropland harvested
cropland planted
Crops
Discount rates
Economic analysis
Economic impact
Economic theory
equations
Ethanol
ethanol production
farmland values
Farms
Fuels
geographical distribution
Impact analysis
Land appraisals
land location
mathematical models
Plant location
Prices
Property finance
Property values
Studies
United States of America
Zea mays
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Summary:Purpose - Corn ethanol plants consume large amounts of corn and their location has the potential to alter local crop prices and surrounding agricultural land values. The purpose of this paper is to analyze the local economic impact of ethanol plant locations on farmland values.Design methodology approach - The relationship between ethanol plant location and agricultural land prices is examined using data obtained from the Agricultural Credit Survey administered by the Federal Reserve Bank of Kansas City.Findings - The findings indicate that ethanol plant location has had an impact on land values. The portion of land price changes attributable to location is consistent with previous estimates of basis changes associated with ethanol plant location.Originality value - The paper finds that land markets appear to be rationally adjusting to the location of ethanol plants.
ISSN:0002-1466
2041-6326
DOI:10.1108/00021460910960453