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Spatial Integration of Mexico-U.S. Grain Markets: The Case of Maize, Wheat and Sorghum

Author

Listed:
  • Jose Luis Jaramillo - Villanueva

    (Colegio de Posgrados)

  • Antonio Yunez - Naude

    (El Colegio de Mexico)

  • Valeria Serrano Cote

    (El Colegio de Mexico)

Abstract

The Mexican government embarked on agricultural trade liberalization in the 1990s, and agricultural trade flows in North America increased. Based on data on Mexico and United States of America (U.S.) prices of maize, sorghum and wheat from 1981 to 2010 we show that trade liberalization between Mexico and the U.S. under the North American Free Trade Agreement (NAFTA) resulted in a structural change in prices received by Mexican producers of these crops. We found that this change coincides with convergence with U.S. prices of maize, sorghum and wheat in Mexico food consumption. Hence, the study provides evidence that trade liberalization led to greater integration of Mexico-U.S. agricultural markets. We also shown that for the three studied crops, there is a long-term relationship between their price series and an increase in the speed of adjustment of domestic prices in response to changes in international/U.S. prices.

Suggested Citation

  • Jose Luis Jaramillo - Villanueva & Antonio Yunez - Naude & Valeria Serrano Cote, 2015. "Spatial Integration of Mexico-U.S. Grain Markets: The Case of Maize, Wheat and Sorghum," EconoQuantum, Revista de Economia y Finanzas, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 12(1), pages 57-70, Enero-Jun.
    • Handle: RePEc:qua:journl:v:12:y:2015:i:1:p:57-70
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    Citations

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    Cited by:

    1. Boly, Mohamed & Sanou, Aicha, 2022. "Biofuels and food security: evidence from Indonesia and Mexico," Energy Policy, Elsevier, vol. 163(C).

    More about this item

    Keywords

    grain markets; price convergence; structural change.;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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