RIN Values: What Do They Tell Us about the Impact of Biofuel Mandates?
The impact of the US drought on the price of corn and other feed grains and oilseeds has made the arcane subject of Renewable Identification Number (RINs) and the role of US biofuel policy of great interest this year. For example, there have been a number of recent calls to the EPA for waivers of the RFS mandates to relieve pressure on food prices for consumers and feed prices for livestock producers. In this post we review the basic economics of the ethanol market both with and without the RFS mandate, and discuss RIN valuation under both conditions. We then provide some speculation as to the support the RFS mandates are currently providing to corn prices based on recently observed RIN prices.
The Evolution of the Ethanol and the Related Markets in the U.S.
This dissertation comprises three substantial chapters that analyse the impact of the U.S. ethanol market on other related markets, specifically the corn and oil markets. 
Chapter 3 models ethanol price asymmetry changes in demand and supply. We find that both demand and supply are relatively inelastic and both asymmetric and we discuss the policy implications of such results. 
Chapter 4 approaches the issue of connectedness among ethanol production, corn prices, and oil prices, together with the direct impact that ethanol production has on corn prices. We find in our connectedness analysis for the ethanol boom period that corn's position is improved as the ethanol market matures after the introduction of ethanol-blending mandates. Furthermore, ethanol production shows a dependent position that is due to the relatively small proportion it has on the fuel market. In contrast to apriori expectations, we do not find conclusive evidence to support the claims that ethanol production impacts corn prices. 
Chapter 5 continues to analyse the potential impact of ethanol prices by addressing the interrelation of price volatilities between corn, ethanol and oil prices in the U.S. ethanol market. We find that there are no statistical significant cross effects from ethanol prices to corn prices. For the pre-ethanol boom period, we find a double-directional significant cross-spillover effect from oil to ethanol which we expect for these two markets given their link through the blending mandates. In the ethanol boom period, however, we find that the own volatility effects are statistically significant only for oil, and a small significant cross-spillover effect from corn to oil, which suggests the position of corn as an energy crop is strengthening in the fuel market.
The U.S. biodiesel use mandate and biodiesel feedstock markets
Studies of individual biodiesel feedstocks or broad approaches that lump animal fats and vegetable oils into a single aggregate straddle the true case of imperfect but by no means inconsequential substitution among fats and oils by different users. United States biofuel policy includes a biodiesel use mandate that rises to almost 4 hm3 by 2012, calling for biomass feedstock analysis that recognizes the complex interdependence among potential feedstocks and competition for food and industrial uses. We model biodiesel input markets to investigate the implications of the mandate for quantities and prices with and without a provision disallowing biodiesel made from soybean oil. Findings suggest a hierarchy of price effects that tends to be largest for cheaper fats and oils typically used for industrial and feed purposes and smallest for fats and oils traditionally used exclusively for direct consumption, with the cross-commodity effects and other key economic parameters playing a critical part in determining the scale in each case. Although sensitive to the exact parameters used, our results argue against overly simplifying feedstock markets by holding prices constant when considering the economics of a particular feedstock or if estimating the broader impacts of rising biodiesel production on competing uses.