IDEAS home Printed from https://ideas.repec.org/p/ags/aaea04/20306.html
   My bibliography  Save this paper

Two Approaches To Measuring The Economic Impact Of Starlink Corn On U.S. Producers

Author

Listed:
  • Schmitz, Troy G.
  • Schmitz, Andrew
  • Moss, Charles B.

Abstract

The discovery of StarLink corn in U.S. food products caused considerable disruption in the corn markets in 2000 and 2001. We estimated two models on the impact of StarLink corn over the 2000/2001 marketing year. In the first model, to segregate the U.S. corn market, identity preservation costs (IP costs) were imposed on the U.S. grain handling system to deal with both domestic and export sales of food corn and export sales of non food corn to Japan. In the second model, structural changes in corn demand were taken into account. Without taking into account Loan Deficiency Payment Program (LDP) payments, significant costs were incurred by producers as a result of StarLink. However, the effectively reduced the loss in revenue that would have been caused by StarLink, since there were periods of time immediately following the discovery of StarLink during which the market price dropped below the loan rate for corn. It was estimated that StarLink caused U.S. producers to lose between $25 and $290 million in revenue.

Suggested Citation

  • Schmitz, Troy G. & Schmitz, Andrew & Moss, Charles B., 2004. "Two Approaches To Measuring The Economic Impact Of Starlink Corn On U.S. Producers," 2004 Annual meeting, August 1-4, Denver, CO 20306, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20306
    DOI: 10.22004/ag.econ.20306
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/20306/files/sp04sc04.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.20306?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. William Lin & Gregory K. Price & Edward W. Allen, 2003. "StarLink: Impacts on the U.S. corn market and world trade," Agribusiness, John Wiley & Sons, Ltd., vol. 19(4), pages 473-488.
    2. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
    3. Schmitz, Troy G & Schmitz, Andrew & Dumas, Chris, 1997. "Gains from Trade, Inefficiency of Government Programs, and the Net Economic Effects of Trading," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 637-647, June.
    4. Bullock, D. S. & Desquilbet, M., 2002. "The economics of non-GMO segregation and identity preservation," Food Policy, Elsevier, vol. 27(1), pages 81-99, February.
    5. Schmitz, Troy G. & Gray, Richard S., 2000. "State Trading Enterprises And Revenue Gains From Market Power: The Case Of Barley Marketing And The Canadian Wheat Board," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-20, December.
    6. Marion Desquilbet & E. Nitsi, 2000. "The economics of non-GMO segregation and identity preservation," Post-Print hal-02283451, HAL.
    7. Lin, William W. & Price, Gregory K. & Allen, Edward W., 2002. "StarLink: Where No Cry9C Corn Should Have Gone Before," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 17(4), pages 1-4.
    8. David S Bullock & Marion Desquilbet, 2000. "The economics of non-GMO segregation and identity preservation," Working Papers hal-02319375, HAL.
    9. Charles B. Moss & Andrew Schmitz, 2001. "Vertical integration and trade policy: The case of sugar," Agribusiness, John Wiley & Sons, Ltd., vol. 18(1), pages 49-60.
    Full references (including those not matched with items on IDEAS)

    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. Troy G. Schmitz & Andrew Schmitz & Charles B. Moss, 2005. "The economic impact of StarLink corn," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 391-407.
    2. Harvey E. Lapan & Giancarlo Moschini, 2004. "Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 634-648.
    3. Mario F. Teisl & Julie A. Caswell, 2003. "Information Policy and Genetically Modified Food: Weighting the Benefits and Costs," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, March.
    4. David S. Bullock, 2001. "Les effets économiques des réglementations différentes en matière d'organismes génétiquement modifiés," Post-Print hal-02290699, HAL.
    5. Nadolnyak, Denis A. & Sheldon, Ian M., 2002. "A Model of Diffusion of Genetically Modified Crop Technology in Concentrated Agricultural Processing Markets - The Case of Soybeans," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24872, European Association of Agricultural Economists.
    6. Chang, Ching-Cheng & Hsu, Shih-Hsun & Wu, Chia-Hsuan, 2004. "An Economy-Wide Analysis Of Gm Food Labeling Policies In Taiwan," 2004 Annual meeting, August 1-4, Denver, CO 19929, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Demont, Matty & Tollens, Eric, 2001. "Reshaping The Conventional Welfare Economics Framework For Estimating The Economic Impact Of Agricultural Biotechnology In The European Union," Working Papers 31835, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    8. Konduru, Srinivasa & Kalaitzandonakes, Nicholas G. & Magnier, Alexandre, 2009. "GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49594, Agricultural and Applied Economics Association.
    9. Gawron, Jana-Christina & Theuvsen, Ludwig, 2007. "Costs of Processing Genetically Modified Organisms: Analysis of the Rapeseed and Corn Industries," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7601, German Association of Agricultural Economists (GEWISOLA).
    10. Crowe, Bronwyn & Pluske, Johanna M., 2006. "Is it Cost Effective to Segregate Canola in WA?," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 14.
    11. Baker, Andrew & Smyth, Stuart, 2010. "Managing Opportunism in Value-Added Supply Chains:," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 187979, International Consortium on Applied Bioeconomy Research (ICABR).
    12. Gawron, J.-C. & Theuvsen, L., 2008. "Kosten der Verarbeitung gentechnisch veränderter Organismen: Eine Analyse am Beispiel der Raps- und Maisverarbeitung," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 43, March.
    13. Hatwell, Bronwyn & Pluske, Johanna M., 2004. "The cost of segregating GM canola: A case study," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58702, Australian Agricultural and Resource Economics Society.
    14. Heyder, Matthias & Theuvsen, Ludwig & Hollmann-Hespos, Thorsten, 2012. "Investments in tracking and tracing systems in the food industry: A PLS analysis," Food Policy, Elsevier, vol. 37(1), pages 102-113.
    15. Hyde, Jeffrey & Martin, Marshall A. & Preckel, Paul V. & Buschman, Lawrent L. & Edwards, C. Richard & Sloderbeck, Phillip E. & Higgins, Randall A., 2003. "The Value of Bt Corn in Southwest Kansas: A Monte Carlo Simulation Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(1), pages 1-19, April.
    16. Troy G. Schmitz, 2018. "Impact of the Chinese embargo against MIR162 corn on Canadian corn producers," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(4), pages 571-586, December.
    17. Buhr, Brian L., 2003. "Traceability, Trade And Cool: Lessons From The Eu Meat And Poultry Industry," Working Papers 14577, International Agricultural Trade Research Consortium.
    18. Gryson, N. & Eeckhout, M. & Neijens, T., 2008. "Cost and benefits for the segregation of GM and non-GM compound feed," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44418, European Association of Agricultural Economists.
    19. Nielsen, Chantal Pohl & Robinson, Sherman & Thierfelder, Karen, 2002. "Trade in genetically modified food: A survey of empirical studies," TMD discussion papers 106, International Food Policy Research Institute (IFPRI).
    20. GianCarlo Moschini, 2008. "Biotechnology and the development of food markets: retrospect and prospects," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 35(3), pages 331-355, September.

    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:aaea04:20306. 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.