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The Effects of Panama Canal Expansion on US Dairy Trade Flows: West, East, and Gulf District Regions

Author

Listed:
  • Vorotnikova, Ekaterina
  • Devadoss, Stephen

Abstract

In the last two decades, many trends and policy developments impacted the course of the US dairy industry. Since the mid-1990s two important trade agreements, NAFTA and Uruguayn Round have increased international trade for the dairy industry. As of 2015, a major transportation improvement is expected to be achieved by to the expansion of the Panama Canal. The canal is expected to lower transportation costs for many exporters. In this study, we develop a world dairy trade model to analyze dairy product export quantity from the three dairy producing US regions: west coast, gulf coast, and east coast and great lakes combined. We assess the effect of the Panama Canal expansion on the trade of the US regions. We find that the west coast, which includes California, Oregon, Washington, and Idaho states, is one of the biggest beneficiaries of the expansion. The competitive advantages of this region aid in harnessing the most benefits from the transportation improvements and international demand growth for dairy products.

Suggested Citation

  • Vorotnikova, Ekaterina & Devadoss, Stephen, . "The Effects of Panama Canal Expansion on US Dairy Trade Flows: West, East, and Gulf District Regions," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(B), pages 1-20.
    • Handle: RePEc:ags:ifaamr:244615
    DOI: 10.22004/ag.econ.244615
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    References listed on IDEAS

    as
    1. Stephen Devadoss & Angel H. Aguiar & Steven R. Shook & Jim Araji, 2005. "A Spatial Equilibrium Analysis of U.S.–Canadian Disputes on the World Softwood Lumber Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(2‐3), pages 177-192, June.
    2. Paris, Quirino & Drogué, Sophie & Anania, Giovanni, 2011. "Calibrating spatial models of trade," Economic Modelling, Elsevier, vol. 28(6), pages 2509-2516.
    3. Stephen Devadoss & William Ridley, 2014. "Effects of the Mexican Apple Tariff on the World Apple Market," Review of Development Economics, Wiley Blackwell, vol. 18(4), pages 763-777, November.
    4. 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.
    5. Stephen Devadoss & Angel Aguiar, 2006. "Effects of global trade liberalization on softwood lumber markets," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2351-2360.
    6. William Ridley & Stephen Devadoss, 2014. "US–Brazil Cotton Dispute and the World Cotton Market," The World Economy, Wiley Blackwell, vol. 37(8), pages 1081-1100, August.
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