Turnover in U.S. Agricultural Labor Markets

Agricultural workers move in and out of agriculture frequently. Migration between types of jobs takes relatively little time. Legal female workers tend to stay out of the U.S. labor market longer once they stop being employed and their access to jobs outside of agriculture is more limited than that of their male counterparts. Predictions made when the 1986 Immigration Reform and Control Act was passed that granting people amnesty would induce most of them to leave agriculture were incorrect.     

Price Dynamics in U.S. Grain and Freight Markets

This paper studies the spatial price linkages in U.S. grain and transportation markets using cointegration analysis and algorithms of inductive causation on directed acyclic graphs. Transport costs and prices from alternative transportation modes are considered to provide a relatively comprehensive view of the interaction between grain and freight markets over time. Dynamic relationship among corn prices in selected U.S. markets and freight rates, extending from January 1990 to December 2002, are explored. Results suggest the Mississippi Gulf (lower Mississippi River port area) is the most dominant corn market among evaluated export and domestic markets. Also, grain barge rates on the upper Mississippi/Illinois Rivers influence domestic corn markets in contemporaneous time. In the longer‐run, significant dynamic relationships among prices in domestic and export corn markets and freight rates are observed; perturbations in transportation rates affect the variation in corn prices considerably. Le présent article examine les relations d'arbitrage spatial entre les prix pour les marchés des céréales et du transport aux États‐Unis à l'aide d'une analyse de cointégration et d'algorithmes utilisant la notion de causalité inductive sur des graphiques acycliques orientés. Les coûts et les prix de divers modes de transport sont examinés afin de fournir un tableau assez complet de l'interaction entre le marché des céréales et le marché du fret au fil du temps. Nous avons exploré la relation dynamique entre les prix du maïs sur des marchés états‐uniens sélectionnés et les taux de fret, entre janvier 1990 et décembre 2002. Les résultats indiquent que le golfe du Mississippi (zone portuaire du Mississippi inférieur) est le marché de maïs le plus important parmi les marchés intérieurs et extérieurs évalués. Les frais de transport des céréales par barge sur le cours supérieur du Mississippi et la rivière Illinois influencent les marchés intérieurs du maïs à l'heure actuelle. À long terme, des liens dynamiques importants entre les prix sur les marchés du maïs intérieur et extérieurs et les frais de transport sont observés. Des changements de frais de transport affectent considérablement la variation des prix du maïs.     

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.     

Threshold Effects and Asymmetric Price Adjustments in U.S. Dairy Markets

Recent volatility in food prices and the growing disparity between prices at various stages of the marketing channel has generated much interest among agricultural producers, consumers, and policy makers. This study examines the effect of nonlinear threshold dynamics on asymmetric price transmission for three U.S. dairy products (butter, cheese, and fluid milk) using threshold error correction models. The empirical result suggests that price transmission of changes between producer and retail stages of the marketing chain is asymmetric for butter and fluid milk, but not for cheese prices. Also, this paper's findings indicate that conclusions about price asymmetries depend on the model specification assumptions made about symmetry and threshold effects. Thus, previous studies that assumed symmetric behavior and ignored threshold effects may be misleading. La récente volatilité des prix des produits alimentaires et la disparité croissante entre les prix observés aux divers échelons du réseau de distribution ont suscité l'attention des producteurs agricoles, des consommateurs et des décideurs. La présente étude examine l'effet d'une dynamique non linéaire avec seuil sur la transmission asymétrique des prix dans le cas de trois produits laitiers aux États‐Unis (le beurre, le fromage et le lait de consommation), à l'aide de modèles à correction d'erreur avec seuil. Les résultats empiriques montrent que la transmission des variations de prix entre les producteurs agricoles et les détaillants est asymétrique dans le cas du beurre et du lait de consommation, mais ne l'est pas dans le cas du fromage. D'après les résultats de la présente étude, les conclusions concernant l'asymétrie des prix dépendent des hypothèses posées sur la symétrie et les effets de seuil. Par conséquent, les études antérieures dans lesquelles on a supposé un comportement symétrique et ignoré les effets de seuil pourraient induire en erreur.     

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 Economic Impact of U.S. Tobacco Products Exports

The economic impacts of increasing U.S. tobacco exports on the U.S. economy are analyzed. Simulation of expanded exports to South Korea and Thailand are conducted. Over $1.1 billion in economic activity and 12,000 jobs were associated with tobacco export increases to these countries. Declining raw tobacco exports to Thailand, however, offset gains associated with greater cigarette sales. The resultant losses totaled $5.3 million in economic activity and over 378 jobs in the U.S.     

Price Volatility Spillovers in the Western Canadian Feed Barley,U.S. Corn,and Alberta Cattle Markets

Price volatility complicates price discovery and creates risks for cattle producers. This paper analyzes volatility spillovers in the western Canadian beef cattle supply chain. A modified bivariate VAR‐BEKK‐GARCH model is used to examine spillovers and account for asymmetries associated with rising versus falling markets. The spillovers that are found are unidirectional from input to output markets. Spillovers tended to be stronger when cattle prices are depressed and feed costs are rising. Volatility transmission is also flows from feed barley to feeder cattle markets, but volatility does not flow in the opposite direction nor does it advance by more than one level in the supply chain. La volatilité des prix complique la découverte des prix et crée des risques pour les éleveurs de bétail. Cet article analyse les répercussions de la volatilité au sein de la chaîne d'approvisionnement des bovins d'élevage. Un modèle VAR‐BEKK‐GARCH modifié à deux variables sert à l'examen des répercussions et tient compte des asymétries associées aux marchés à la hausse et à la baisse. Les répercussions décelées sont unidirectionnelles du marché des intrants aux produits. Les répercussions semblent plus fortes lorsque les prix des bovins sont bas, et les coûts de fourrage à la hausse. Le transfert de la volatilité se fait aussi sentir de l'orge de fourrage aux marchés de bovins d'engraissement, mais l'inverse ne survient pas et elle ne progresse pas de plus d'un niveau dans la chaîne d'approvisionnement.     

China as a Potential Market for U.S. Pork Exports

This study provides details of emerging opportunities for U.S. pork exporters following the U.S.–China WTO Accession Agreement. The Agreement will enable the United States to gain unprecedented access to the Chinese pork market. The United States enjoys comparative advantages in producing hogs at lower cost, higher quality, and greater efficiency. Moreover, Chinese preference for pork is highly complementary to that of U.S. consumers. Therefore, U.S. pork exporters are expected to target primarily the Chinese variety meats market. Although China is expected to remain a surplus pork production nation, demographic shifts could provide additional opportunities for U.S. pork exporters to increase sales of more premium cuts for urban consumers in China.     

Regional Integration of Nineteenth Century U.S. Egg Markets

Multivariate asymmetric threshold vector error correction models are applied to a historical analysis of the regional integration of U.S. markets for eggs at the turn of the nineteenth century. Two general approaches to the selection of the thresholds are considered. The first criterion ignores the cross equation correlation while the latter explicitly accounts for it. Our results suggest that threshold behaviour characterises spatial price linkages between the markets analysed.     

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.     

Price Cycles and Asymmetric Price Transmission in the U.S. Pork Market

Economists have proposed several plausible explanations for observed price transmission asymmetries in commodity markets. Unfortunately, the econometric methods commonly used in such studies cannot empirically distinguish pricing behavior under the competing theories. We argue that the theories may be classified by firm responses to high- and low-frequency price cycles and use Engle's band spectrum regression to test the symmetry of high- and low-frequency cycles in weekly pork prices. The findings indicate that changes in wholesale prices are asymmetrically transmitted to retail prices in relatively low-frequency cycles, which does not support search costs and other high-frequency explanations. Conversely, wholesale pork prices asymmetrically adjust to changes in farm prices at all frequencies.     

Assessing the Vulnerability to Price Spikes in Agricultural Commodity Markets

We examine empirically the predictability of conditions associated with a higher probability of a price spike in agricultural commodity markets. We find that the forward spread is the most significant indicator of probable price jumps in maize, wheat and soybeans futures markets, a result which is in line with the ‘Theory of Storage’. We additionally show that some option-implied variables add significant predictive power when added to the more standard information variable set. Overall, the estimated probabilities of large price increases from our probit models exhibit significant correlations with historical sudden market upheavals in agricultural markets.     

Analyzing Factors Affecting U.S. Food Price Inflation

Since the summer of 2007, U.S. food price inflation has increased dramatically. Given public anxiety over fast-rising food prices, this study attempts to analyze the effects of market factors—prices of energy and agricultural commodities and exchange rate—on U.S. food prices using a cointegration analysis. Results show that the agricultural commodity price and exchange rate play the key roles in determining the short- and long-run movement of U.S. food prices. It is also found that in recent years, energy price has been a significant factor affecting U.S. food prices in the long run, but has little effect in the short run. This implies the strong linkage between energy and agricultural markets in the long run over the recent years. Depuis l’été 2007, l’inflation des prix des aliments aux États-Unis a augmenté considérablement. En raison de l’anxiété que la hausse rapide des prix des aliments suscite au sein de la population, nous avons tenté d’évaluer, à l’aide d’une analyse de co-intégration, les répercussions de certains facteurs de marché– le prix de l’énergie, le prix des produits agricoles primaires et le taux change – sur les prix des aliments aux États-Unis. Les résultats ont montré que les prix des produits agricoles primaires et le taux de change jouent un rôle important dans la détermination des tendances à court et à long terme des prix des aliments aux États-Unis. Nous avons également constaté que, au cours des dernières années, le prix de l’énergie a eu une forte influence sur les prix des aliments aux États-Unis à long terme, mais peu d’influence à court terme. Cette observation montre l’étroit lien à long terme des marchés de l’énergie et des produits agricoles au cours des dernières années.     

The U.S. Dairy Sector without Price Supports

Under legislation approved in 1996, the U.S. dairy price support program would end on 31 December 1999. While U.S. dairy markets would continue to be protected by import tariffs and export subsidies, the previous floor under market prices would be removed. Given the prospective market situation, model results indicate that removing the price support program would have only modest impacts on the U.S. dairy industry. Prices of nonfat dry milk may be lower without the price support program than they would be if the program continued, but the net impact on milk prices and production would be small. Unless world demand is substantially stronger than projected or unless U.S. supplies are much larger, unsubsidized U.S. exports of products such as butter and nonfat dry milk appear unlikely. Niche markets and changes in relative values of milk components, however, may offer other U.S. dairy export opportunities. En vertu d'une loi agricole approuvée par les États-Unis en 1996, le régime de soutien des prix des produits laitiers devait se terminer le 31 décembre 1999. Même si les marchés laitiers américains continueraient àêtre protégés par des tarifs douaniers à l'importation et par des subventions à l'exportation, le prix plancher en place serait enlevé. Vu la situation prospective du marché, les résultats modélisés font voir que le retrait du régime de soutien des prix n'aurait que des impacts modestes sur le secteur laitier américain. Les prix de la poudre de lait écrémé seraient peut-être plus bas que si le régime avail été maintenu, maisl'impact net sur les prix du lait et sur la production laitière serait faible. À mains que la demande mondiale n'augmente sensiblement plus que prévu ou que les stocks américains ne soient beaucoup plus importants, il est peu probable que des exportations non subventionnées de produits comme le beurre et la poudre de lait écrémé voient le jour dans le proche avenir. Toutefois, le développement de certains créneaux du marché et les changements affectant les valeurs relatives des composants laitiers pourraient se traduire par d'autres possibilitiés d'exportation pour les produits laitiers américains.     

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.     

Examining the Leontief Paradox in U.S. Agricultural Trade

Factor intensity of United States agricultural trade is examined in the context of Leontief's classic paradox using Leontief's method as well as methods developed recently by Leamer and others. Findings indicate that factor endowments are important determinants of U.S. agriculture's comparative advantage in trade as suggested by the Heckscher-Ohlin theory.     

Effects of Trade Barriers on U.S. and World Apple Markets

Regional apple demand and supply parameters using Bayesian estimation were utilized to develop a spatial equilibrium model for the world apple market. A baseline scenario with existing tariffs was developed; a reduced tariff and free trade scenarios were simulated. Comparison of these scenarios with the baseline shows that apple trade is significantly greater under trade liberalization. China increases its exports by 174% under free trade and replaces France as the largest exporter. U.S. exports increased by about 140% to all regions except to Canada and Southeast Asia. Results confirm the importance of transportation costs and the interlinkages of prices in the world market in determining the trade flows.
Nous avons utilisé des paramètres régionaux de l'offre et de la demande de pomme, déterminés à l'aide d'une estimation bayésienne, pour élaborer un modèle d'équilibre spatial du marché mondial de la pomme. Nous avons élaboré un scénario de base utilisant des tarifs douaniers existants et nous avons simulé des scénarios utilisant des tarifs douaniers réduits et le libre-échange. Une comparaison de ces scénarios avec le scénario de base montre que le commerce de la pomme est significativement plus important dans un contexte de libéralisation des échanges. La Chine augmente ses exportations de 174 p. 100 dans un contexte de libre-échange et détrône la France en tant que premier exportateur mondial. Les exportations des États-Unis augmentent d'environ 140 p. 100 dans toutes les régions sauf au Canada et en Asie du Sud-Est. Les résultats confirment l'importance des coûts de transport et des liens entre les prix sur le marché mondial dans la détermination du flux des échanges commerciaux.