Rising energy prices over the past decade, in tandem with evolving policies promoting renewable energy and on farm conservation practices, have transformed the relationship between the energy and agriculture sectors, according to the “Agriculture Supply and Demand for Energy and Energy Products” report from USDA’s Economic Research Service (ERS).
Traditionally, agriculture used energy both directly in the form of fuel and electricity and indirectly through use of energy-intensive inputs, such as fertilizers and pesticides. However, record-high energy prices and expanding biofuel policies have substantially increased the demand for agricultural products as renewable fuel feedstocks since the mid-2000s. As of 2012, corn-based ethanol and soybean-based biodiesel supplied almost 6 percent of U.S. transportation fuels, consuming 42 and 1 percent of U.S. corn and soybean production, respectively, the report explained.
The report concluded the following regarding how farmers have adapted to rising energy prices and evolving policies by adjusting their use of energy-based agricultural inputs, altering energy-intensive production practices, and growing more energy-feedstock crops. The findings are as follows:
- Farmers have expanded production of agricultural commodities used as energy feedstocks. In particular, corn production increased 13 percent from 2001 to 2012.
- The prices of all major field crops increased by more than 40 percent between 2001 and 2012 (in real terms).
- Farmers adapted to higher energy prices and related energy and conservation policy incentives by shifting to more energy-efficient production practices and input use.
- The agriculture sector’s use of energy and energy-intensive inputs generally remained constant or fell during 2001-11.
- Nonetheless, energy-related agricultural production costs increased with rising energy prices, and
- More farmers started producing on-farm energy, though the scale of production still remains very low.
The study is available here.
In a related ERS announcement, the agency said it is making available “U.S. Bioenergy Statistics,” which includes data on ethanol, boidiesel, next-generation bio-fuels, and related topics. The report is available here.
