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Abstract
The “food vs. fuel” debate has been difficult to resolve without letting the data speak. In this paper
we investigate the short run interactions and the long-run equilibrium relationship between food and fuel
prices. Results from cointegration analysis indicate a long-run equilibrium relationships between these
prices. A closer examination of the price dynamics between ethanol and three food prices revealed that
the corn-soybean linkage plays a key role in the fuel-food long-run relationship. Our results indicate
that ethanol prices Granger cause corn prices, while no individual agricultural commodity appears to
Granger cause ethanol prices. However, corn and soybean as a single group had a significant impact on
the ethanol market.