The Demand for Salmon in the European Union: The Importance of Product Form and Origin

This paper addresses the importance of different product forms and their origin when considering the market structure in the European salmon market. The competition between farmed salmon and wild caught Pacific salmon has received some attention previously. However, this was before frozen Atlantic salmon emerged as an important product form in the market. This could be important as frozen Atlantic salmon is more likely to be a close substitute for Pacific salmon, which is mostly marketed frozen, than is fresh Atlantic salmon. In this paper, an almost ideal demand system is used to estimate the demand for fresh Atlantic salmon, frozen Atlantic salmon and frozen Pacific salmon in the European Union.     

A Cross-Sectional Analysis of Costs of Farming Atlantic Salmon (Salmo Salar)

Commercial aquaculture, the cultivation of fish in managed systems, has received increasing attention in recent years as an alternative source of fish, employment and income. High value species particularly offer a better prospect of profitable farming. For example, Atlantic salmon, which is one of the more expensive species on the market, is now being farmed in Norway, Scotland, Canada, the United States, and several other countries. Norway has made rapid progress in Atlantic salmon aquaculture; farmed salmon have now replaced cod as her principal export species. In the opinion of some observers, Norway' s success in farming the Atlantic salmon is the most significant event in the history of European aquaculture (United States Department of Commerce, 1984).
Commercial aquaculture in Canada is still in its initial stage of development, but recently there has been increased interest in aquaculture as a means of generating incomes and jobs, and of acquiring technological expertise. The Science Council of Canada has urged a commitment towards commercial aquaculture; it cites Norwegian aquaculture that by the year 2000 could be producing fish worth U.S. $3 billion and be employing 50.000 people (Science Council of Canada 1985). In Canada, farming of Atlantic salmon is expanding rapidly on both east and west coasts. Canada' s output of farmed Atlantic salmon reached 174t in 1984 and is forecast to reach 1,200t by 1987, with a further immediate potential on the east coast of 2.000–3,000t. On the west coast, more than a million Atlantic salmon eggs have been imported for hatching and for cultivation in sea pens. The number of Atlantic salmon farms on the west coast is projected to more than double by the end of 1986.     

Analyzing the Demand for New Value-Added Product: Case of Pure Blueberry Sweetener

Analyzing the demand for a new product that is not on the market presents challenges as agricultural producers search for potential value-added products and develop marketing strategies for these products. This study examines the market potential for a new pure blueberry sweetener in Kentucky. The results from a contingent choice survey indicate that the average respondent was not willing to pay a significantly positive amount for the product. However, a small group of respondents, who can be identified by their overall blueberry purchasing intentions and age, was willing to pay a price higher than the product's cost of production. Small and medium-size producers who are often limited by the financial and technical constraints associated with actual market trials of new products are likely to find that the type of marketing research described here is a particularly cost-effective method of getting information to assess market potential.     

Consumer Attitudes Toward Mandatory Traceability and Labeling Systems for Farmed Atlantic Salmon

The food incidence of polychlorinated biphenyls in farmed Atlantic salmon in Canada and its subsequent effects on the demand for farm-raised salmon has induced policymakers and stakeholders to develop new policies on food safety. This article analyzes consumer attitudes toward mandatory traceability and labeling systems for farmed Atlantic salmon in Newfoundland and Labrador. It identifies factors affecting consumers' decisions to purchase the product. Results show that consumers, on average, perceive the benefits of traceability and labeling systems on farm-raised Atlantic salmon in spite of its driving up the product price.     

An Evaluation of Indian Government Rice Policy in Tamil Nadu

The Indian government procures rice from wholesalers or producers at a price below the market price and then distributes it to low-income consumers at a subsidized price. This paper uses a simulataneous equations econometric model to evaluate the effects of this policy on supply/demand of rice in the state of Tamil Nadu, between 1956 and 1985. Results show that production is more responsive to power for irrigation and fertilizer prices than to output prices. Because supply is inelastic, producers bear the burden of the ‘tax’ imposed by procurement even though rice is procured from the wholesaler. Rice distributed by the government displaces rice demanded in the open market, and thus the government distribution of rice has not increased the total consumption of rice.     

MARKETING AGENCIES AND THE ECONOMICS OF MARKET SEGMENTATION*

Increasing importance is being attached to market segmentation strategies as a means of increasing producer returns. In this paper, a generalised model of price discrimination without supply control is developed to analyse the implications of optimal segmentation strategies for non-homogeneous products. It is shown that the magnitude of producer returns is dependent on demand and supply conditions, with increases in returns falling as price elasticities of demand and supply increase. The model is applied to the New Zealand sheep meats industry to reveal that returns to producers from market segmentation strategies could be quite low in the long run.     

Markets and welfare effects of food fraud

This study develops a theoretical framework of heterogeneous consumers and producers and imperfectly competitive food companies to analyse the system‐wide market and welfare effects of food fraud in the form of food adulteration and mislabelling. The results show that, while the price impacts of food fraud are product‐specific with the equilibrium prices of high‐quality and low‐quality products moving in different directions, the equilibrium quantities depend on the relative magnitude of the demand and supply effects of food fraud. Regarding the welfare effects of food fraud, they are shown to be highly asymmetric across different consumers and producers. In addition to enabling the disaggregation of the welfare effects of food fraud, the explicit consideration of agent heterogeneity, asymmetries in the probability of fraud detection and the endogeneity of the producer quality choices also enables the derivation of a key result of this study; contrary to what is traditionally believed, both low‐quality and high‐quality producers can have economic incentives to commit fraud. The group that is more likely to cheat is determined by the social attitudes towards fraudulent behaviour, the enforcement policy parameters and the relative magnitude of the demand and supply effects of food fraud. A comparison of the market effects of mislabelling and food adulteration reveals that, while the equilibrium quantity of the high‐quality product is higher in the presence of mislabelling, producers are more likely to mislabel than adulterate their products.     

AN ANALYSIS OF THE ROLE OF UNCERTAINTY IN THE MARKETING OF PERISHABLE PRODUCTS

This paper analyses the problem of marketing uncertainty for producers of perishable products. It argues that there are two main features to this marketing uncertainty: uncertainty of demand at the market price due to quality considerations; and uncertainty of transport services associated with the independence and cost of such services. Moreover a negative correlation between the uncertainties of demand and transport services may be shown theoretically to be an additional cost for producers, and as such may be sufficient to create a reversal of supply response to a given change in market conditions.     

The producer welfare effects of trade liberalization when goods are perishable and habit‐forming: the case of asparagus

Asparagus is a perishable, highly seasonal crop. We find that out‐of‐season imports of asparagus caused habit formation that increased demand in the U.S. growing seasons. We find that habit effects offset about 64% of the welfare losses to U.S. asparagus producers from increased Mexican imports under NAFTA and all of the U.S. producer welfare losses from increased Peruvian imports under the Andean Trade Preference Act. We estimate that the U.S. producer welfare losses from NAFTA are less than the annualized value of market loss assistance provided them in the 2008 Farm Bill.     

挪威三文鱼养殖业及其对我国的启示

挪威是世界上重要的三文鱼养殖地之一,三文鱼产量长期居全球首位,挪威三文鱼养殖业取得了举世瞩目的成绩。本文在对挪威三文鱼养殖业进行实地走访调研的基础上,借助于联合国粮农组织渔业统计数据库和贸易统计数据库,对挪威三文鱼养殖业的成就进行了简要介绍,并对挪威三文鱼养殖业取得成功的因素和存在的问题进行了详细分析,以期为我国水产养殖业的发展规划提供参考。     

A CROSS-COMMODITY APPRAISAL OF DEMAND-RAISING RESEARCH BENEFITS: PORK AND CHICKEN IN AUSTRALIA

A multi-commodity model is developed for evaluating the gains from research which raises the demand for a commodity, and applied to the pig and chicken industries in Australia. The major finding is that the gain to pork producers is larger, and the gain to consumers smaller, with a cross-commodity consideration than without. Bigger differences in results are observed with larger values of the cross-price elasticity between pork and chicken, and with a larger shift in demand for chicken. However, the aggregate benefits to the Australian pig industry are not significantly affected by price changes in the market for chicken. The implication of the analysis is that, by ignoring the cross-market feedback between commodities closely related in consumption, consumers (or taxpayers) of the commodity experiencing a rise in demand may bear a higher-than-optimal outlay on public research directed to increasing the demand for that commodity.     

A Spatial Equilibrium Analysis of U.S.–Canadian Disputes on the World Softwood Lumber Market

This paper utilizes a world spatial equilibrium model to examine the effects of U.S.–Canadian softwood lumber disputes on U.S., Canadian, and other exporters' and importers' lumber markets. Results show that the U.S. import tariff on Canadian softwood lumber impacts prices, supply, demand and trade flows not only in the United States and Canada but also in the other countries. Though the goal of U.S. trade restriction is to limit imports from Canada and protect its producers, the United States cannot fully accomplish this goal as non-Canadian exporters fill the void left by the reduced imports from Canada. Canadian producers lose from the U.S. policy, but their loss is mitigated as Canada redirects its exports to other importers. Importing countries such as Japan and the European Union benefit from the U.S. trade restrictions as Canada seeks to sell its softwood lumber to these countries.     

Wheat policy and economy-wide reform in Brazil

In recent years, the wheat sector in Brazil has moved from governmental protection and public intervention to a free market and privatization. In this study, those changes are analyzed through measures of governmental intervention on nominal rates of protection and on welfare of producers and consumers. Elasticities of demand and supply of wheat are estimated, and the effects of changes in policies are analyzed under official and shadow exchange rates. Welfare measures indicate that almost US$ 8 billion were spent from 1970 until 1989 with policies to subsidize producers and consumers. The policy-induced stimulus to consumer demand exceeded the stimulus to domestic production, and self sufficiency in wheat declined. The reduction in wheat subsidies since 1989 was more than an isolated sector-specific policy. It was part of macroeconomic antiinflation policy, and it coincided with other economy-wide changes such as real appreciation and a decline in international commodity prices.     

The Pricing of Experience Goods: The Example of en primeur Wine

The market for "primeur" wine in the Bordeaux region allows producers to sell wine that is still in barrels. As with all experience goods, producers send quality signals to uninformed buyers. Using original data on Bordeaux wines, we show that the pricing behavior of producers depends to a large extent on their reputation, and much less on short-term changes in quality (as measured by experts' grades). We also find that the primeur price has an informative role, since a 10% increase in primeur price leads to a 3% increase in prices on the market for bottled wine.     

Industry consolidation and price in the US linerboard industry

Starting from the 1980s, the US paper and paperboard industry has recorded an increasing degree of consolidation through mergers and acquisitions. This strategy, combined with voluntary downtime, is adopted by producers as a method to tackle excess capacity and to reduce costs in order to improve profitability. In this study, we investigate the impact of industry consolidation on price in the linerboard industry. We estimate a dynamic demand/supply system model that explicitly incorporates market structure. We find a low own-price elasticity of linerboard demand and an insignificant substitute effect of plastic containers. Additionally, linerboard price does not seem to respond to current demand and adjusts slowly across time. Moreover, industry-operating rate shows a positive, statistically significant, but small impact on price. Although those findings suggest an oligopoly market and some degree of barometric price leadership, market concentration shows no statistically significant effect on price.     

Integration in the Norwegian pulpwood market: domestic prices versus external trade

Pulpwood from Norway spruce (Picea abies (L.) Karst) traded domestically in Norway, imported to Norway, or exported from Norway is investigated with respect to commodity homogeneity and market integration. The prices imply that pulpwood from Norway spruce is a homogenous commodity, and the three price series are analyzed with respect to market integration. Using the cointegration estimator two cointegrating vectors are found within the system, and the weak Law of One Price can be imposed on domestic- and import prices. Imports are weakly exogenous to the two other variables, indicating that international pulpwood prices leads the domestic market.     

Effects of an animal disease shock on meat markets and producer income

This paper simulates pig producer and slaughterhouse income losses due to a classical swine fever outbreak in Finland. The analysis explicitly takes into account that an outbreak of a highly contagious animal disease can shrink export demand for pig meat. After having observed the disease and its impact on pig meat price, producers can optimize animal stocks thought insemination decisions, which affects the number of animals in a dynamic manner. The income losses of pig industry were estimated to be less than €30 million. The losses were mainly due to price movements caused by an export demand shock. The results suggest that if the outbreak causes distortions in meat trade, the disease can cause substantial losses to the industry even if it has directly a small impact on the number of animals on farms. We also found that the optimization could reduce disease losses significantly, even more than 50%.     

Assessing the U.S. Market Economics for a Cultured Flounder,Paralichthys sp., Industry

There is considerable interest in the culture of flounder because of its high retail market value, the established worldwide market for flatfish, and the ability of flounder to grow in fresh or brackish water. The author assesses the U.S. market potential for a cultured flounder, Paralichthys sp., industry. Regression analyses were used to estimate both the price and income elasticity of demand for flounder. Demand forecasting was used to predict effective annual future demand for flounder. Although the U.S. flounder market is large and expanding, there are indications of excess supply suppressing prices below profitable levels for aquaculture producers. Demand is price inelastic, so an increase in supply from aquaculture production will produce a disproportionately large decrease in price, reducing total producer revenue. Unless niche markets are targeted or an export market is developed, the outlook for large-scale flounder aquaculture in the United States is not economically promising.     

An equilibrium displacement approach to oligopoly market analysis: an application to trade in the Korean infant formula market

This article uses an equilibrium displacement model (EDM) to assess the impact of a change in trade policy in the Korean infant formula market that is assumed to be oligopolistic. Domestic oligopolists compete in a market for a homogenous good with importing firms who enjoy the same level of market power as the domestic producers. Within an EDM framework, we investigate how the market adjusts to a new equilibrium in response to an external policy shock that improves access to foreign goods. Our empirical work consists of two steps. We first econometrically estimate the market demand elasticity and market power parameter. Then, using these estimates, we simulate our EDM model to assess the distributional effects of tariff cuts and other changes in marginal cost. Simulation results show that, with a lower market price and increased consumption, the change in consumer surplus resulting from tariff reduction is unambiguously positive, but that the change in social welfare can be in either direction, depending on who receives market rents associated with imports. When importing firms are domestic, the domestic welfare change is definitely positive. However, in the case of foreign importing firms, the direction of the welfare change crucially depends on the demand elasticity.     

Competition between farmed and wild salmon: the Japanese salmon market

This article examines the Japanese market for salmon. This market is of interest, since it is the largest and most diversified salmon market in the world with wild and farmed species, from Europe and South and North America, competing in the same market. In contrast to the European Union (EU)‐ and U.S.‐markets, there have been neither trade conflicts nor trade restrictions. The Japanese market can hence provide information about the impact of bringing substantial quantities of a new product into a market, and the effect of large‐scale aquaculture on traditional fisheries. In this article, market integration between wild and farmed salmon on the Japanese market is examined, using both bivariate and multivariate cointegration analysis. Tests for the Law of One Price are also conducted. The results indicate that the species are close substitutes on the market, and that the expansion of farmed salmon has resulted in price decreases for all salmon species.