A Spatial Panel Approach to Estimating Corn Yields: Implications for U.S. Ethanol Availability

Abstract

As sustainable ethanol management is dependent on the availability of corn, it is requisite to predict corn yields correctly under different weather conditions. Reflecting the spatial linkages between weather conditions and corn yields, this study estimates corn yields with a focus on changes in fertilizers and weather variables. Due to the spatial spillover effects, the results show that the spatial panel model is more appropriate for estimating corn yields. Based on the predicted values of corn yields, the potential ethanol availability is also projected by using the conversion rates of ethanol from corn. The results reveal that the spatial panel analysis provides more robust estimates of ethanol yields than the standard panel analysis. The findings highlight the importance of considering spatial correlations in predicting corn yields, which is ultimately critical for predicting future ethanol availability.