Major impacts of the US Renewable Fuel Standard on corn and soybean cultivation

Abstract

We use rich spatial data on observed crop choices and ethanol production to estimate the local impacts of ethanol plants and the overall impact of the 2007 US Renewable Fuel Standard (the RFS2) on crop patterns. We find that the RFS2 increased total corn area by 9.7%, corn monoculture by 16.8%, and soybean area by 6.7%, with notable spatial heterogeneity in both the overall impact and the local effects of ethanol plants. The results indicate an RFS2-induced shift in the geography of corn and soybean cultivation within the Corn Belt—intensification in the core, and significant expansion near the periphery.