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Estimation of Demand for Wheat by Classes for the United States and the European Union

Published online by Cambridge University Press:  15 September 2016

Samarendu Mohanty  and
E. Wesley F. Peterson
Samarendu Mohanty
Affiliation:
Center for Agricultural and Rural Development at Iowa State University
E. Wesley F. Peterson
Affiliation:
Department of Agricultural Economics at the University of Nebraska-Lincoln
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Abstract

This study estimates demand for wheat differentiated by classes using a dynamic AIDS model for the United States and the European Union (EU). The results suggest that imported wheat is more price responsive than domestic wheat in the U.S. market but not in the EU market. This may suggest that the Canadian policy that reduces prices of Canadian wheat in the U.S. market or U.S. export subsidies that raise prices of U.S. wheat could be expected to give rise to substantial substitution of Canadian for U.S. wheat. It is also found that in the EU, complementary relationships exist between spring and other wheat groups. This complementary relationship between the lower and higher quality wheat in the EU is not surprising because EU millers blend cheaper wheat such as EU common wheat and U.S. other wheat with high protein (spring) to obtain the preferred characteristics.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 28 , Issue 2 , October 1999 , pp. 158 - 168
Copyright
Copyright © 1999 Northeastern Agricultural and Resource Economics Association 

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