Did starLink reduce import demand for corn?

Troy Schmitz, Andrew Schmitzt, Charles B. Moss

Research output: Contribution to journalReview article

4 Scopus citations

Abstract

This study estimates the impact of reduced demand for U.S. corn during the 2000/01 marketing year caused by the StarLink-contamination event in the year 2000. A partial equilibrium model is constructed that separates both the domestic and foreign demand functions for corn into food and non-food demand curves. The complexities arising from the Loan Deficiency Payment (LDP) Program are also incorporated. The empirical results indicate that the reduction in Japanese corn demand alone would have reduced the average price received by U.S. corn producers in 2000/01 by between U.S. 4.17cents to U.S. 5.18cents per bushel if LDP payments did not partially offset the market impact. However, after adjusting for LDP payments, the average price received by U.S. corn producers dropped by only between U.S. $0.50cents and U.S. 0.83cents per bushel over the 2000/01 marketing year. This translates into a loss in revenue of between U.S. $48 and U.S. $78 million.

Original languageEnglish (US)
Pages (from-to)91-106
Number of pages16
JournalJournal of Agricultural and Food Industrial Organization
Volume2
Issue number2
DOIs
StatePublished - Jan 1 2004

Keywords

  • Biotechnology
  • Corn demand
  • Grain trade
  • Starlink

ASJC Scopus subject areas

  • Food Science
  • Business, Management and Accounting(all)
  • Economics and Econometrics

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