Not all thin markets are alike: The case of organic and non-genetically engineered corn and soybeans

Abstract

We use time series methods to explore the relationship between prices for two different niche versions of feed corn and soybeans, and their conventional counterparts. Whereas organic versions are linearly cointegrated, and their premia are high and stable, non-GE products – which are nonlinearly cointegrated – exhibit narrower premia that are subject to collapse. Because organics are also non-GE, these differences point to the value of a well-recognised and enforced USDA organic label and/or the importance consumers place on the non-GE attributes of organic products.