Agricultural and energy commodity prices have traditionally exhibited relatively low correlation. However, recent increases in biofuel production have altered the agriculture-energy relationship in a fundamental way. This increase has drawn on corn previously sold to other uses, as well as...

Policy measures to encourage biofuels production, including the Renewable Fuels Standard (RFS) mandates, subsidies to ethanol blenders, regulations on gasoline chemistry and import tariffs, helped to create this new, persistent demand for corn and contributed to incentives to create the capacity...