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Economic Impacts of the U.S. Soybean Aphid Infestation: A Multi-Regional Competitive Dynamic Analysis

Author

Listed:
  • Kim, C.S.
  • Schaible, Glenn D.
  • Garrett, Lynn
  • Lubowski, Ruben N.
  • Lee, Donna J.

Abstract

We estimated the economic benefits resulting from controlling soybean aphid infestation by using a multi-regional competitive dynamic equilibrium model. Results indicate that the reduction of soybean production resulting from a soybean aphid infestation is largely absorbed by reducing soybean exports, due to the higher price elasticity of export demand compared to domestic demand. Producer benefits resulting from controlling soybean aphids would increase by between $949 million and $1.623 billion in ten years under various scenarios. Results also suggest that it is economically more efficient to control soybean aphids when the rate of intrinsic growth is relatively lower, the supply price elasticity of soybean acreage is relatively more elastic, and insecticide treatment costs per acre are lower. However, if the discovery of the gene Rag-1 (TF04048) leads to new cultivars that withstand the soybean aphid, our estimates will overestimate the actual damages. Even so, our analysis demonstrates that it is critical to control soybean aphids early in their infestation cycle to avoid a rapid increase in damages.

Suggested Citation

  • Kim, C.S. & Schaible, Glenn D. & Garrett, Lynn & Lubowski, Ruben N. & Lee, Donna J., 2008. "Economic Impacts of the U.S. Soybean Aphid Infestation: A Multi-Regional Competitive Dynamic Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), October.
  • Handle: RePEc:ags:arerjl:45660
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    References listed on IDEAS

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    1. Kim, C.S. & Lee, Donna & Schaible, Glenn & Vasavada, Utpal, 2007. "Multiregional Invasive Species Management: Theory and an Application to Florida's Exotic Plants," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(s1), pages 111-124, October.
    2. Torre Ugarte, Daniel de la & Sanford, Scott & Skinner, Robert A. & Westcott, Paul C. & Lin, William W., 2000. "Supply Response Under The 1996 Farm Act And Implications For The U.S. Field Crops Sector," Technical Bulletins 33568, United States Department of Agriculture, Economic Research Service.
    3. Kim, C.S. & Lubowski, Ruben N. & Lewandrowski, Jan & Eiswerth, Mark E., 2006. "Prevention or Control: Optimal Government Policies for Invasive Species Management," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(1), April.
    4. Kim, C.S. & Lubowski, Ruben N. & Lewandrowski, Jan & Eiswerth, Mark E., 2006. "Prevention or Control: Optimal Government Policies for Invasive Species Management," Agricultural and Resource Economics Review, Cambridge University Press, vol. 35(01), pages 29-40, April.
    5. William H. Meyers & S. Devadoss & Michael D. Helmar, 1991. "World Soybean Trade Model: Specification, Estimation, and Validation, The," Food and Agricultural Policy Research Institute (FAPRI) Publications 91-tr23, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    6. Piggott, Nicholas E. & Wohlgenant, Michael K., 2002. "Price elasticities, joint products, and international trade," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), December.
    7. William H. Meyers & S. Devadoss & Michael D. Helmar, 1991. "World Soybean Trade Model: Specification, Estimation, and Validation, The," Center for Agricultural and Rural Development (CARD) Publications 91-tr23, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    8. Lee, Donna J. & Kim, C.S. & Schaible, Glenn D., 2006. "Estimating the Cost of Invasive Species on U.S. Agriculture: The U.S. Soybean Market," 2006 Annual meeting, July 23-26, Long Beach, CA 21113, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Kim, C.S. & Lee, Donna J. & Schaible, Glenn D. & Vasavada, Utpal, 2007. "Multiregional Invasive Species Management: Theory and an Application to Florida's Exotic Plants," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(October), October.
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