Low water on the big river: The role of physical and economic distance in US soybean markets
Presented by:
Joe Janzen
Agricultural & Consumer Economics
University of Illinois-Urbana-Champaign
Friday, November 3, 2023
12:00 pm-1:15 pm
Taylor-Hibbard Seminar Room (Rm103)
Low water levels on the Mississippi River waterway significantly disrupted the flow of agricultural commodities from the US Midwest to global markets in fall 2022. This paper studies the soybean market response to this supply chain shock. The price impact of the drought-induced supply chain shock is a function of dependence on river transport, concurrent production shocks, and proximity to alternative demand sources. Using a spatial difference-in-difference approach, we estimate the county-level soybean price impact of the supply chain shock and the cost to producers of low water levels.
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