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There is an inextricable link between energy production and food/feed/fiber cultivation with available water resources. Currently in the United States, agriculture represents the largest sector of consumptivewater usemaking up 80.7%of the total. Electricity generation in the U.S. is projected to increase by 24 % in the next two decades and globally, the production of liquid transportation fuels are forecasted to triple over the next 25-years, having significant impacts on the import/export market and global economies.

We quantify the emergence of biofuel markets and its impact on U.S. and world agriculture for the coming decade using the multi-market, multi-commodity international FAPRI (Food and Agricultural Policy Research Institute) model. The model incorporates the trade-offs between biofuel, feed, and food production and consumption and international feedback effects of the emergence through world commodity prices and trade.

USDA Agricultural Projections for 2011-20, released in February 2011, provide longrun projections for the farm sector for the next 10 years. These annual projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.

Important assumptions for the projections include:

PEATSim (Partial Equilibrium Agricultural Trade Simulation) is a dynamic, partial equilibrium, mathematical-based model that enables users to reach analytical solutions to problems, given a set of parameters, data, and initial
conditions. This theoretical tool developed by ERS incorporates a wide range of domestic and border policies that enables it to estimate the market and trade effects of policy changes on agricultural markets. PEATSim captures

Agricultural markets often feature significant transport costs and spatially distributed production and processing which causes spatial imperfect competition. Spatial economics considers the firms’ decisions regarding location and spatial price strategy separately, usually on the demand side, and under restrictive assumptions. Therefore, alternative approaches are needed to explain, e.g., the location of new ethanol plants in the U.S. at peripheral as well as at central locations and the observation of different spatial price strategies in the market.

The USDA, NASS Cropland Data Layer (CDL) of the US for the growing seasons 1997 through 2013 are available using CropScape. Data for some states may not be available for one or more years.