Determining Opportunities for U.S. Exports of Consumer-Oriented Foods to African Regional Markets

Abstract

This study examines the level of trade between the U.S. and Africa for consumer-oriented agricultural products during the 1990s. To achieve this objective, we propose six congruent regional African markets and examine patterns of U.S. trade with Africa on consumer-oriented agricultural products. The reason for such groupings is to identify trade flow differences and similarities between the U. S. and each of these regional groups. The results shed light on the extent to which U.S. exporters of consumer food products are capitalizing on the emerging markets of Africa. The graphing technique used in the study, in combination with trend stability measures for the six proposed congruent regional African markets, introduce a method for identifying market opportunity.     

U.S. Canned Tuna Supply and Demand

Abstract

A 3SLS econometric model is used to estimate price elasticities of supply and demand for domestically produced and imported canned tuna in the U.S. market. In addition, a VAR model is developed to examine the relations between imports and domestically produced canned tuna. For domestically produced canned tuna, a 3SLS estimation of a structural econometric model yielded a coefficient for price elasticity of supply of 0.2 and of own-price demand of ?0.3. Such price inelasticities are expected of a fishery exploited at or near its maximum yields (inelastic supply), and a consumer product widely viewed as almost a necessity in a well-stocked pantry (inelastic demand). In addition, the model yielded a cross-price elasticity of demand with respect to the price of imported canned tuna of 0.45. Additional results include an income elasticity U.S. demand for domestically packed tuna of 0.83; a cross-price elasticity with the price of bread (a complement) of ?0.33, a cross-price elasticity for the price of ground meat (a substitute) of 0.30. With respect to imported canned tuna in the U.S. market, the corresponding elasticities estimated in the model are ?1.3 (own-price demand), 3.5 (income elasticity), ?1.2 (cross-price with the price of bread) and 2.5 (cross-price with the price of ground meat).

For canned tuna company managers, the results provide useful information about the likely effects on sales that would come from their own price changes, from changes in the price of imported canned tuna, and from price changes in the markets for complementary and substitute products. They can also use our results in discussions with U.S. trade negotiators, who are frequently faced with disputes over tariffs, market access, and other trade issues.     

The linkage between the U.S. ethanol market and developing countries’ maize prices: a panel SVAR analysis

The major expansion of U.S. ethanol production raises concerns about the potential detrimental impacts on developing countries’ agricultural prices, farm income, and food security. To assess the sensitivity of maize prices to ethanol production, this study explores the linkage between the U.S. ethanol market and developing countries’ maize prices. The econometric approach, based on a panel structural vector autoregression model, captures market interdependencies and the likelihood that developing countries’ responses are both heterogeneous and dynamic. The results indicate that the U.S. ethanol market's impacts on maize prices in developing countries are heterogeneous and that coastal countries are more susceptible to U.S. economic shocks. The estimates also suggest that countries more dependent on food imports and/or receiving U.S. food aid are at a higher risk of being affected by such shocks. Overall, the results indicate that those countries with the greatest sensitivity and exposure to global agricultural commodity markets could benefit from domestic policies and international assistance, which reduce their exposure to impacts from the U.S. maize market.     

Forecasting Japan's Frozen Potato Imports

THe U.S. potato industry is the main supplier of frozen potatoes to a rapidly growing Japanese food service market. A two-stage budgeting procedure was employed to estimate total Japanese imports of frozen potatoes and imports by country of origin. Japanese demand for frozen potatoes was found to be own-price inelastic and income elastic. The complementary relationship between hamburger and frozen potatoes suggests that replacement of tariffs for beef import quotas will impact the Japanese potato market. Imports from the United States are expected to increase substantially and remain in constant proportion to total imports.     

Problems in planning tropical tree crop projects and possible solutions

Abstract

This paper considers whether top‐grade diary beef produced in Japan and high‐quality beef imports from the USA are components of the same product market. In addressing this issue an approach is used for defining the nature and extent of a product market relying on the concept of instantaneous causality. The results, for selected cuts of beef, suggest that the markets are in fact separate.     

U.S. Agricultural Trade with Mexico

Abstract

This study examined the effects of exchange rates, economic growth, trade liberalization, and export assistance programs on U.S. agricultural exports to Mexico. The Commodity Credit Corporation's GSM-102 Export Credit Guarantee Program reduces the risk associated with export financing and payment. The impact of the export credit guarantee program on U.S. agricultural exports to Mexico was estimated in an import demand model using quarterly data from 1980 to 1996. The results indicate that for every $1 of export credit guarantees, Mexican imports of U.S. farm products increased $0.30. Real income growth in Mexico, however, was the most important factor in the expansion of U.S. exports. Trade liberalization under NAFTA also increased U.S. exports to Mexico.     

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.     

Prospects for U.S. Rice in Japanese Retail Markets Under COOL: A Sensory Experiment

ABSTRACT

Japanese policies leave its retail market closed to U.S. rice. This study examined prospects of U.S. rice if these markets opened, with required country-of-origin labeling (COOL). Data were from auction experiments examining preferences for U.S. and Japanese rice under two scenarios (COOL with observation and COOL with tasting) using Japanese female primary shoppers. Two segments were identified: those open to U.S. rice at prices equal or above domestic, as likely due to tariffs, and those closed to U.S. rice at any price. About 7% of subjects were in the first segment, while nearly 26% fell in the latter. Tasting failed to generate large changes. Frequent COOL readers were especially closed even after tasting. Tasting did change the profile of open consumers, with demographics mattering less afterward. Under any policy change, U.S. rice would need a discounted price relative to domestic rice; even then, a substantial market segment appears closed.     

Linking of U.S. monetary policy and exchange rates to world soybean markets

The linkage between macroeconomic policies and agricultural commodity trade has become an important research issue of agricultural economists. This paper investigates the macroeconomic linkage of soybean trade competition between the exporting countries of the United States, Brazil, and Argentina in the EC-12 and Japan import markets. It is argued that U.S. monetary growth may have important impacts on the competitive position of U.S. soybean exports through exchange rates. Two relationships are investigated: (a) the effects of U.S. monetary growth on the agricultural trade weighted exchange rates, and (b) the responsiveness of agricultural commodity prices and U.S. exports to exchange rate movements. Results indicate that a weak dollar increases imports of soybeans and soymeal significantly which serves to increase the equilibrium world price and increase both U.S. and Brazil/Argentina exports in the long run. However, during periods of more expansionary U.S. monetary policy there is little evidence of significant increases in market share position for U.S. soybeans and soymeal in world markets.     

Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market

The U.S. wine market experienced rapid growth in all facets—production, consumption, exports, and imports—over the past decade. Red wine imports more than tripled while consumption of domestically produced red wines doubled. This research estimates demand elasticities of U.S. red wine imports from five countries accounting for over 90% of imports—Italy, France, Spain, Australia, and Chile—using the first-difference version of the almost ideal demand system (AIDS). These elasticities are compared with those for domestically produced red wine. Results for conditional expenditure elasticities indicate that the U.S. red wine industry gains over imports when U.S. consumers' total expenditures on red wine increase. However, comparing own- and cross-price elasticities reveals an increase in the price of U.S. red wine results in a decline in quantity demanded six times greater than for French and Italian red wines and over 20 times greater than other import countries, thus harming the U.S. red wine industry. Empirical results suggest that U.S. red-wine producers could increase their total revenue by decreasing prices, while Italian and French producers can increase total revenues by increasing them.     

An econometric analysis of U.S. vital wheat gluten imports

In light of the wheat wet milling industry's development in the E.C. and of the prominent role U.S imports play in the international market for wheat gluten, this paper discusses the international market for wheat gluten, an important component of processed grain products. An econometric analysis of the U.S. import demand for wheat gluten is undertaken. The price of flour, income, and the U.S. value of wheat protein are found to be important determinants of wheat gluten imports.     

Generic Advertising of U.S. Lamb

ABSTRACT

Generic advertising of U.S. lamb by the U.S. sheep and lamb industry is an effort to reverse an almost continual decline in the industry since World War II. This analysis explores the answers to three related questions: (1) What have been the effects of the generic lamb advertising on U.S. and foreign sheep, lamb, and wool markets? (2) Has the generic lamb advertising program effectively increased the consumption of domestically produced lamb as intended rather than imported lamb? (3) What have been the returns to U.S. sheep producers, feeders, and packers who pay for the advertising? Using a 70-equation, non-spatial, price equilibrium, simultaneous econometric simulation model of the world sheep, lamb, and wool markets, the analysis concludes that the U.S. lamb industry’s generic lamb advertising program has positively impacted their markets, enhanced profitability of the industry, and increased the industry’s share of domestic lamb consumption.     

A NOTE ON BIAS IN THE ESTIMATED EFFECTS OF BEEF IMPORTS ON U.S. MEAT PRICES

The impact of beef imports on United States meat prices is a highly emotional and controversial issue. Congressmen representing urban districts, and to a lesser extent the Administration, look towards beef imports as a way of containing rapid increases in meat prices. Congressmen and Senators from beef-producing States regard beef imports as a direct attack on the U.S. beef-producing industry. These differing views are being reconciled through Congress considering amendments to the Meat Import Law (Public Law 88-482). The impacts and the amendments are of vital interest to Australia because about 25 per cent of Australia's beef production is sold on the lucrative U.S. market. In this note it is argued that, in general, the reported impacts on U.S. meat prices are overestimates because the analysts misspecify the structure of the U.S. beef industry.     

Effect of Sugar Price Policy on U.S. Imports of Processed Sugar-containing Foods

The relationship between U.S. and world sugar prices, and U.S. import demand for four categories of sugar-containing products is examined. Results from econometric estimation indicate that U.S. intervention in the sugar market has helped to increase U.S. imports of some sugar-containing products, but that increased disposable income has played a more important role. Although some developing countries have benefitted from U.S. sugar policy by increasing their exports of sugar-containing products to the United States, U.S. sugar policy has helped imports from developed countries proportionately more than those from developing countries as a whole.     

Agricultural Trade among NAFTA Countries: A Case Study of U.S. Meat Exports

The U.S. NAFTA partners are important markets for U.S. meat exports. A source-differentiated almost ideal demand system is used in this study to estimate meat demand in Canada and Mexico. Empirical results suggest that while a U.S. price increase in the Canadian market is expected to increase U.S. sales revenues; it would decrease sales revenues in the Mexican market. Furthermore, an increase in meat expenditures in Canada and Mexico is expected to increase the demand for U.S. meats, while the bovine spongiform encephalopathy outbreaks have had a negative effect on U.S. and Canadian beef market shares. Finally, a decomposition of the causes of changes in demand for U.S. meats over time is performed.     

THE SHORT-RUN IMPACT OF BEEF IMPORTS ON U.S. MEAT PRICES

This paper contains short-run estimates of the impact of beef imports from Australia and elsewhere on U.S. retail meat prices. The U.S. beef demand is separated into two categories, table cuts and processed items. Estimates of direct and cross price elasticities of demand for these products are used together with elasticity estimates for other meats and other foods to assess the effect of imports on prices and upon various portions of the Consumer Price Index.     

An Analysis of Removal of Agricultural Trade Barriers between the United States and Canada with Emphasis on the Southeast

A four-region, 23-commodity small world agricultural trade liberalization model within the SWOPSIM framework is used to measure the impact of tariff removal between the United States and Canada. The tariffs are simply defined as negative import subsidy equivalents in the model and are then removed from the trade prices. The model recalculates domestic supply and demand levels in all regions, rebalancing world trade, production, consumption and prices. In summary, the impacts of the Canada-U.S. Trade Agreement on selected commodity groups are significant. Canadian imports of beef and veal, poultry meat, soybean oil and fresh strawberries increase. Furthermore, the results indicate larger trade flows for selected products and declines in producer and consumer prices in Canada, U.S. and Southeast regions. Since the U.S. share of Canadian agricultural imports averaged 60% in the 1980s, the impact of trade liberalization will be greater in Canada in selected commodities than in the U. S. or the southeastern region, and Canadian dependence on the U.S. market will be increasing in the future. The tariff phaseout, together with a reduction in nontariff barriers and harmonizing of domestic agricultural policies, will create more export opportunities in selected commodities for both the United States and Canada, and will create the world's largest free trade market.     

A Price Analysis of U.S. Agricultural Exports in East Asian Markets

This paper examines the price competition between U.S. agricultural exports and that of its competitors in East Asia. The results show weak price competition in Japan's corn and soybean markets, and no price competition in the wheat market. U.S. cotton exports to Japan face strong price competition. In Hong Kong, U.S. market shares are low, while the demand for its rice, corn, soybeans and cotton is elastic. For South Korea and Taiwan, improved political relationships between China, South Korea, and Taiwan have caused the U.S. to lose market shares to China.     

Japan's peanut import demand: implications for United States exports

Japan's import demand for both raw peanuts and processed peanut products was estimated using the Rotterdam model in order to determine the impact of an increase in the Japanese raw peanut quota on peanut imports from the USA and its competitors. The results indicate that if a larger import budget were allocated to raw peanut imports by Japan, most of the increase would be allocated to imports of Chinese raw peanuts. Furthermore, U.S. exports of peanut products could be affected if Japanese expenditures on peanut product imports change as a result of an increase in the quota for raw peanut imports. Thus, this study concludes that an increase in the Japanese import quota for raw peanuts provides only limited market opportunity for U.S. peanut exports, and China appears to benefit more than the USA from an increase in the Japanese raw peanut import quota. In contrast, the value added trade of peanut products could provide a better market opportunity for the U.S. peanut industry.     

Role of Trade in Satisfying U.S. Fresh Fruit and Vegetable Demand

Increases in U.S. consumer incomes result in an increase in imports' share of U.S. consumption. Although U.S. consumers reduce the quantity demanded in response to higher import prices, the reduction is sufficiently inelastic that exporter revenue increases. U.S. Free Trade Agreements have made fresh fruits and vegetables available throughout the year and may also have broadened the U.S. marketing window for imports. Now U.S. food safety regulations favor large operations that can absorb the fixed and seasonal food safety related costs. Therefore, the brunt of the increased import competition is borne by small and medium-size producers.