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The United States In The Global Soybean Market: Where Do We Go From Here?

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  • Bolling, H. Christine
  • Somwaru, Agapi
  • Kruse, Jamie Brown

Abstract

This study applies the concept of a dynamic dominant-firm oligopoly model to the international soybean market. It has been suggested that the international soybean market should be viewed as an oligopoly among exporting nations. Consistent with Gaskins (1971) dynamic dominant firm model, our results indicate that the current U.S. loan deficiency-payment prices and their predecessors created an environment in which smaller (fringe) exporters could prosper and expand. The reduction of U.S. market share is thus a logical outcome of an "optimally managed decline" a la Gaskins. The study finds U.S. market share to decline at a reducing rate and predicts U.S. market share eventually to stabilize, given the expanding international market for soybeans and products. Recognition of the structure of international soybean market has policy implications for the 2002 farm program as the classic dominant firm model suggests.

Suggested Citation

  • Bolling, H. Christine & Somwaru, Agapi & Kruse, Jamie Brown, 2001. "The United States In The Global Soybean Market: Where Do We Go From Here?," 2001 Annual meeting, August 5-8, Chicago, IL 20698, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20698
    DOI: 10.22004/ag.econ.20698
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    References listed on IDEAS

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    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. Carter, Colin A. & MacLaren, Donald, 1994. "Alternative Oligopolistic Structures In International Commodity Markets: Price Or Quantity Competition?," Working Papers 51223, International Agricultural Trade Research Consortium.
    3. Ann M. Carlos & Jamie Brown Kruse, 1996. "The decline of the Royal African Company: fringe firms and the role of the charter," Economic History Review, Economic History Society, vol. 49(2), pages 291-313, May.
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    Cited by:

    1. Bolling, H. Christine, 2004. "Measuring Market Integration In The Global Economy," 2004 Annual meeting, August 1-4, Denver, CO 20269, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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