Agricultural Production and Prices
Markets for major agricultural commodities are typically analyzed by looking at supply-and-use conditions and implications for prices. From an economic perspective, these factors determine the market equilibrium. In the U.S. agricultural sector, many interactions and relationships exist between and among different commodities. For example, corn production and prices affect feed costs in the livestock sector.
Corn is the major agricultural input used in the United States to produce ethanol, which has accounted for over 40 percent of U.S. corn use in recent years. Rapid expansion of ethanol production in the past decade reflected a response to high crude oil prices, the Renewable Fuel Standard, and other factors. However, ethanol production has generally plateaued as oil prices have fallen and the gasoline market has hit a 10-percent blend constraint.