IDEAS home Printed from
   My bibliography  Save this article

A Dynamic Analysis Of Us Export Wheat Pricing And Market Shares


  • Ahmadi-Esfahani, Fredoun Z.
  • Carter, Colin A.


The economics of a higher loan rate to support US wheat prices is analysed. Utilising optimal control theory, a dynamic wheat trade model is developed. The basic premise underlying the model is that the United States finds itself having transient monopoly power in the wheat market. An expression for the optimal pricing policy which maximises the present value of expected profits over the indefinite future is derived. Results from both the theoretical and empirical models demonstrate that the US wheat pricing strategy depends on its costs relative to competitors' costs, the discount rate and the competitors' response function. The main policy implication of the analysis is for the dominant wheat exporting country constantly to seek to lower costs relative to competitors and to maintain a price exceeding unit cost without encouraging competitors' expansion.

Suggested Citation

  • Ahmadi-Esfahani, Fredoun Z. & Carter, Colin A., 1987. "A Dynamic Analysis Of Us Export Wheat Pricing And Market Shares," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(3), pages 1-13, December.
  • Handle: RePEc:ags:ajaeau:22269

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Gaskins, Darius Jr., 1971. "Dynamic limit pricing: Optimal pricing under threat of entry," Journal of Economic Theory, Elsevier, vol. 3(3), pages 306-322, September.
    2. Dunmore, John C., 1985. "International Trade as a Source of Risk and Uncertainty," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 3(1), pages 1-8, February.
    3. Mitchell, Donald O & Duncan, Ronald C, 1987. "Market Behavior of Grains Exporters," World Bank Research Observer, World Bank Group, vol. 2(1), pages 3-21, January.
    4. Johnson, S. R. & Womack, Abner W. & Meyers, William H. & Young II, Robert E. & Brandt, Jon, 1985. "Options for the 1985 Farm Bill: An Analysis and Evaluation," FAPRI Staff Reports 244138, Food and Agricultural Policy Research Institute (FAPRI).
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Ahmadi-Esfahani, Fredoun Z. & Jensen, Paul H., 1994. "Impact of the US-EC price war on major wheat exporters' shares of the Chinese market," Agricultural Economics, Blackwell, vol. 10(1), pages 61-70, January.
    2. Ryan, Timothy J., 1994. "Marketing Australia's Wheat Crop: The Way Ahead," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(01), pages 1-15, April.

    More about this item


    Demand and Price Analysis;


    Access and download statistics


    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:ajaeau:22269. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.