Short-run dynamics of feed ingredient prices facing the EC: a causal analysis

This paper attempts to (1) shed some light on the EC - US controversy concerning the effect of the EC oilseeds market regime on EC imports of US soybean products, essentially soy meal, and (2) provide information on another EC - US controversy: Does corn-gluten feed behave as a substitute for (EC view) or a complement to (US view) feed grains, and do EC corn-gluten feed imports displace EC grain production or not?By using a constrained vectorial autoregressive model of Rotterdam prices for soy meal, sunflower meal, rape meal, corn-gluten feed and cassava, we show that (1) the decrease in EC imports of US soymeal are mot mainly caused by the EC milling subsidies, and (2) corn-gluten feed is both a substitute for soymeal due to its protein content and a substitute for cassava (and grains) due to its energy content: US and EC views are only partial views.