Linkages between natural gas, fertiliser and cereal prices: A note

Alternative Energies
Written By Katie Browning

Journal of Agricultural Economics 

Volume 74, Issue 3

Authors

Vatsa, Puneet; Miljkovic, D; Baek, J

Abstract

We use structural vector autoregressions to analyse the dynamic effects of shocks to natural gas and nitrogenous fertiliser prices on three major cereal crops: maize, rice and wheat. We find that the response of cereal prices to natural gas and fertiliser price shocks has been relatively small, instantaneous and transitory. These findings suggest that crop prices may change rapidly in response to energy and fertiliser prices, even when there are no shifts in the underlying fundamentals in crop markets. Furthermore, because the effects of the shocks dissipate rather quickly, short-term measures to address swings in food prices may suffice.

Katie Browning https://www.blincinnovation.com
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