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. 4.17¢ to U.S. 5.18¢ 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. $0.50¢ and U.S. 0.83¢ 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.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.