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Did StarLink Reduce Import Demand for Corn?

Author

Listed:
  • Schmitz Troy G.

    (Arizona State University)

  • Schmitz Andrew

    (University of Florida)

  • Moss Charles B.

    (University of Florida)

Abstract

This study estimates the impact of reduced demand for U.S. corn during the 2000/01 marketing year caused by the StarLink-contamination event in the year 2000. A partial equilibrium model is constructed that separates both the domestic and foreign demand functions for corn into food and non-food demand curves. The complexities arising from the Loan Deficiency Payment (LDP) Program are also incorporated. The empirical results indicate that the reduction in Japanese corn demand alone would have reduced the average price received by U.S. corn producers in 2000/01 by between U.S. 4.17¢ to U.S. 5.18¢ per bushel if LDP payments did not partially offset the market impact. However, after adjusting for LDP payments, the average price received by U.S. corn producers dropped by only between U.S. $0.50¢ and U.S. 0.83¢ per bushel over the 2000/01 marketing year. This translates into a loss in revenue of between U.S. $48 and U.S. $78 million.

Suggested Citation

  • Schmitz Troy G. & Schmitz Andrew & Moss Charles B., 2004. "Did StarLink Reduce Import Demand for Corn?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(2), pages 1-16, May.
  • Handle: RePEc:bpj:bjafio:v:2:y:2004:i:2:n:6
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    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.
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    Cited by:

    1. Kalaitzandonakes, Nicholas & Kaufman, James & Miller, Douglas, 2014. "Potential economic impacts of zero thresholds for unapproved GMOs: The EU case," Food Policy, Elsevier, vol. 45(C), pages 146-157.
    2. Schmitz, Andrew & Zilberman, David & Zhu, Manhong, 2015. "Trans-Pacific Partnership, GMOs, and Japan’s Agricultural Trade," Proceedings Issues, 2014: Trade and Societal Well-Being, December 13-15, 2015, Clearwater Beach, Florida 229242, International Agricultural Trade Research Consortium.
    3. Magnier, Alexandre & Konduru, Srinivasa & Kalaitzandonakes, Nicholas G., 2009. "Market and Welfare Effects of Trade Disruptions from Unapproved Biotech Crops," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49592, Agricultural and Applied Economics Association.
    4. Henseler, Martin & Piot-Lepetit, Isabelle & Ferrari, Emanuele & Mellado, Aida Gonzalez & Banse, Martin & Grethe, Harald & Parisi, Claudia & Hélaine, Sophie, 2013. "On the asynchronous approvals of GM crops: Potential market impacts of a trade disruption of EU soy imports," Food Policy, Elsevier, vol. 41(C), pages 166-176.

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