IDEAS home Printed from https://ideas.repec.org/p/ags/aaea04/20164.html
   My bibliography  Save this paper

Economic Implications Of The Australia-U.S. Free Trade Agreement For U.S. Dairy Markets And Domestic Dairy Farm Programs

Author

Listed:
  • Alston, Julian M.
  • Sumner, Daniel A.
  • Balagtas, Joseph Valdes
  • Brunke, Henrich

Abstract

We develop a simulation model to analyze the effects on U.S. milk markets of an Australia-U.S. free trade agreement. An important contribution to the literature is the derivation of explicit supply and demand relationships for milk components, which allows an analysis of long-term production, consumption, and trade patterns that is not tied to specific products. Simulations indicate that increased imports from Australia, resulting from bilateral trade liberalization, would result in modest reductions in U.S. milk prices and production.

Suggested Citation

  • Alston, Julian M. & Sumner, Daniel A. & Balagtas, Joseph Valdes & Brunke, Henrich, 2004. "Economic Implications Of The Australia-U.S. Free Trade Agreement For U.S. Dairy Markets And Domestic Dairy Farm Programs," 2004 Annual meeting, August 1-4, Denver, CO 20164, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20164
    DOI: 10.22004/ag.econ.20164
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/20164/files/sp04al06.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.20164?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jean-Christophe Bureau & Jean-Pierre Doussin, 1999. "Sanitary and Technical Regulations: Issues for Trade Liberalization in the Dairy Sector," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(5), pages 149-156, December.
    2. Jean‐Paul Chavas & Thomas L. Cox & Edward Jesse, 1998. "Spatial allocation and the shadow pricing of product characteristics," Agricultural Economics, International Association of Agricultural Economists, vol. 18(1), pages 1-19, January.
    3. Zohra Bouamra‐Mechemache & Jean‐Paul Chavas & Tom Cox & Vincent Réquillart, 2002. "EU Dairy Policy Reform and Future WTO Negotiations: a Spatial Equilibrium Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 233-257, July.
    4. Thomas L. Cox & Jean-Paul Chavas, 2001. "An Interregional Analysis of Price Discrimination and Domestic Policy Reform in the U.S. Dairy Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 89-106.
    5. Sumner, Daniel A., 2003. "Implications of the US Farm Bill of 2002 for agricultural trade and trade negotiations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(1), pages 1-24.
    6. Jean-Paul Chavas & Richard M. Klemme, 1986. "Aggregate Milk Supply Response and Investment Behavior on U.S. Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 55-66.
    7. Zohra Bouamra-Mechemache & Jean-Paul Chavas & Thomas L. Cox & Vincent Réquillart, 2002. "Partial Market Liberalization and the Efficiency of Policy Reform: The Case of the European Dairy Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1003-1020.
    8. Zohra Bouamra-Mechemache & K. Dartigues & Vincent V. Requillart, 2002. "EU dairy policy reform and future WTO negotiations [Réforme de la politique laitière européenne et nouvelles négociations de l'OMC]," Post-Print hal-02670390, HAL.
    9. Bruce A. Babcock & John C. Beghin & Jacinto F. Fabiosa & Stephane De Cara & Amani Elobeid & Cheng Fang & Chad E. Hart & Murat Isik & Holger Matthey & Alexander E. Saak & Karen Kovarik & FAPRI Staff, 2002. "Doha Round of the World Trade Organization: Appraising Further Liberalization of Agricultural Markets, The," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 02-wp317, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    10. Thomas L. Cox & Jonathan R. Coleman & Jean-Paul Chavas & Yong Zhu, 1999. "An Economic Analysis of the Effects on the World Dairy Sector of Extending Uruguay Round Agreement to 2005," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(5), pages 169-183, December.
    11. Joseph V. Balagtas & Daniel A. Sumner, 2003. "The Effect of the Northeast Dairy Compact on Producers and Consumers, with Implications of Compact Contagion," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 123-144.
    12. Jeffrey D. McDonald & Daniel A. Sumner, 2003. "The Influence of Commodity Programs on Acreage Response to Market Price: With an Illustration Concerning Rice Policy in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 857-871.
    13. Dale M. Heien & Cathy Roheim Wessells, 1988. "The Demand for Dairy Products: Structure, Prediction, and Decomposition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 219-228.
    14. Richard R. Barichello, 1999. "Dairy Demand, Supply and Policy in Korea: Potential for International Trade: Discussion," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(5), pages 143-143, December.
    15. JooHo Song & Daniel A. Sumner, 1999. "Dairy Demand, Supply and Policy in Korea: Potential for International Trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(5), pages 133-142, December.
    16. Babcock, Bruce A. & Beghin, John C. & Fuller, Frank H. & Mohanty, Samarendu & Fabiosa, Jacinto F. & Kaus, Phillip J. & Fang, Cheng & Hart, Chad E. & Matthey, Holger & de Cara, Stephane & Kovarik, Kare, 2001. "FAPRI 2001 U.S. and World Agricultural Outlook," FAPRI Staff Reports 32052, Food and Agricultural Policy Research Institute (FAPRI).
    17. Helmberger, Peter G. & Chen, Yu-Hui, 1994. "Economic Effects Of U.S. Dairy Programs," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-14, December.
    18. Michael K. Wohlgenant, 1989. "Demand for Farm Output in a Complete System of Demand Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 241-252.
    19. Economic Research Service, 1992. "Weights, Measures, and Conversion Factors for Agricultural Commodities and Their Products," Miscellaneous Publications 330082, United States Department of Agriculture, Economic Research Service.
    20. Jean-Christophe Bureau, 1999. "An Economic Analysis of the Effects of the Uruguay Round Agreement and Full Trade Liberalization on the World Dairy Sector: Discussion," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(5), pages 201-202, December.
    21. Kuo S. Huang, 1996. "Nutrient Elasticities in a Complete Food Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 21-29.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Balagtas, Joseph Valdes & Kim, Sounghun, 2005. "Beggar-Thy-Self Advertising: A Multi-Market Model of Generic Promotion for Dairy Products," 2005 Annual meeting, July 24-27, Providence, RI 19303, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alston, Julian M. & Balagtas, Joseph Valdes & Brunke, Henrich & Sumner, Daniel A., 2006. "Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 1-22, June.
    2. Bouamra-Mechemache, Z. & Chavas, J.P. & Cox, T. & Réquillart, V., 2001. "Price discrimination and EU dairy policy : an economic evaluation of policy options," Economics Working Paper Archive (Toulouse) 23, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
    3. Seyed Habibollah Mosavi, 2016. "Energy price reform and food markets: the case of bread supply chain in Iran," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 169-179, March.
    4. Abdessalem Abbassi & Olivier Bonroy & Jean‐Philippe Gervais, 2008. "Dairy Trade Liberalization Impacts in Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(3), pages 313-335, September.
    5. Bouamra-Mechemache, Zohra & Ali-Kein, Hela Hadj & Requillart, Vincent, 2006. "Impact of WTO reforms on the world dairy sector," 2006 Annual meeting, July 23-26, Long Beach, CA 21149, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Bouamra-Mechemache, Zohra & Requillart, Vincent, 2006. "EU dairy policy and WTO negotiations," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10105, European Association of Agricultural Economists.
    7. Scott Biden & Alan P. Ker & Stephen Duff, 2020. "Impacts of trade liberalization in Canada's supply managed dairy industry," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 535-552, July.
    8. Charteris, Angus & Winchester, Niven, 2010. "Dairy disaggregation and joint production in an economy-wide model," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 1-17.
    9. D’Antoni, Jeremy M. & Mishra, Ashok K. & Blayney, Donald, 2013. "Assessing participation in the Milk Income Loss Contract program and its impact on milk production," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 243-254.
    10. Jackson Jeremy Jay & Thraen Cameron S. & Bozic Marin, 2013. "Conflict over Cooperation: Why So Much Disagreement over the Proposed Dairy Market Stabilization Program?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 1-10, November.
    11. Angus Charteris & Niven Winchester, 2010. "Dairy disaggregation and joint production in an economy-wide model *-super-‡," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 491-507, October.
    12. DESBOIS, Dominique, 2015. "La qualité du lait a-t-elle un prix ? Une estimation hédonique de la valeur des attributs spécifiques du lait de vache," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(3), September.
    13. Hayley H. Chouinard & David E. Davis & Jeffrey T. LaFrance & Jeffrey M. Perloff, 2010. "Milk Marketing Order Winners and Losers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 59-76.
    14. Key, Nigel D. & Lubowski, Ruben N. & Roberts, Michael J., 2004. "The 1996 Federal Agriculture Improvement and Reform Act: Correcting a Distortion?," 2004 Annual meeting, August 1-4, Denver, CO 20128, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Zohra Bouamra-Mechemache & Roel Jongeneel & Vincent Réquillart, 2009. "EU Dairy Policy Reforms: Luxembourg Reform, WTO Negotiations and the Quota Regime," EuroChoices, The Agricultural Economics Society, vol. 8(SpecialIs), pages 13-22, April.
    16. Lehtonen, Heikki, 2008. "Impact Of Phasing Out Milk Quotas On Structure And Production Of Finnish Dairy Sector," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6465, European Association of Agricultural Economists.
    17. Ahearn, Mary Clare & Collender, Robert N. & Diao, Xinshen & Harrington, David H. & Hoppe, Robert A. & Korb, Penelope J. & Makki, Shiva S. & Morehart, Mitchell J. & Roberts, Michael J. & Roe, Terry L. , 2004. "Decoupled Payments In A Changing Policy Setting," Agricultural Economic Reports 33981, United States Department of Agriculture, Economic Research Service.
    18. Lee, Hyunok & Sumner, Daniel A. & Ahn, Byeong-il, 2006. "Consequences of further opening of the Korean dairy market," Food Policy, Elsevier, vol. 31(3), pages 238-248, June.
    19. Ecker, Olivier & Qaim, Matin, 2011. "Analyzing Nutritional Impacts of Policies: An Empirical Study for Malawi," World Development, Elsevier, vol. 39(3), pages 412-428, March.
    20. Rolf Jens Brunstad & Ivar Gaasland & Erling Vårdal, 2005. "Efficiency losses in milk marketing boards - the importance of exports," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 77-97.

    More about this item

    Keywords

    International Relations/Trade;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea04:20164. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.