Andrew Swanson, PhD

I am an Assistant Professor in the Department of Agricultural Economics and Economics at Montana State University. My position includes a partial appointment with the Montana Agricultural Experiment Station and Extension. Prior to joining Montana State, I was a postdoctoral scholar at the University of California, Davis in a cooperative appointment funded by the USDA, Office of the Chief Economist. I graduated with a Ph.D. in Agricultural and Resource Economics from UC Davis, and I received my Master's degree from Montana State. I grew up on a corn, soybean, and cattle farm in rural Nebraska. My research aims to understand how low-carbon fuel policies in California and at the federal-level are impacting commodity markets.

Access my CV here.

Get in touch at andrew[dot]swanson7[at]montana[dot]edu.

Current Research

The Pass-Through of California Low Carbon Fuel Standard Credits to Ethanol Plant Corn Prices

Abstract: California’s Low Carbon Fuel Standard (LCFS) uses a system of carbon credits to subsidize low-carbon fuels based on their carbon emissions per megajoule of energy. Corn ethanol producers are the second largest source of renewable energy in California’s transportation sector, and they can earn over $0.10 per gallon of ethanol sold in California from LCFS credits. I estimate the impact of weekly credit price changes on the cash corn prices of ethanol plants selling into California, and I use data from the California Air Resources Board and a fixed-proportions model of ethanol production to determine the per bushel value of LCFS credits. I find that 40% of credit price changes pass through to corn prices. However, ethanol plants with another LCFS competitor within 20 miles pass through over 60% of their LCFS subsidies, and I cannot reject full pass-through in this case. My results are consistent with a spatial-competition model of corn procurement in which the LCFS provides some buyers with a competitive advantage over their nearest neighbors. Ethanol plants generated over $200 million dollars of credits in 2024. This paper finds that corn suppliers are capturing around $80 million dollars of these subsidies through higher prices while ethanol plants are capturing over $100 million. As policymakers seek to boost commodity markets through low-carbon fuel policies like 45Z, farmers could likewise capture a sizable portion of this tax credit; however, without sufficient local competition, the majority of the subsidies could accrue to large commodity processors with market power.

Selection of Refereed and Policy Publications

Smith, Aaron, and Andrew Swanson. 2024. The Economic and Policy Challenges of Climate Smart Agriculture. Conditionally accepted at Review of Environmental Economics and Policy. Working paper draft.

Swanson, Andrew. 2024. Is Sustainable Aviation Fuel the Future of Ethanol? farmdoc daily (14):39. Available here.

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