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The Renewable Fuel Standard (RFS) mandates in the Energy Independence and Security Act (EISA) of 2007 require that 36 billion gallons of renewable biofuels be produced in 2022, of which 16 billion gallons are to be from cellulosic feedstocks. This study examined supply of “other hay” (hay excluding alfalfa), based on the assumption that "other hay" is similar to grass species that might be grown as cellulosic feedstock. We have attempted to estimate the factors affecting the acreage of "other hay" in the context of a system of equations explaining allocations among all crops. For each of the three basic models (acreage allocation equations, acreage share equations and revenue share equations), we have estimated with seemingly unrelated regression (SUR) and three-stage least squares (3SLS). Empirical analysis reveals that production of hay in Upper Midwestern U.S. has not been significantly and consistently affected by prices.
Adviser: Richard Perrin