Effects Of The Duties On Canadian Hard Red Spring Wheat

Since the United States imposed antidumping and countervailing duties totaling 14.16 percent on imports of Canadian hard red spring (HRS) wheat, Canadian exports to the United States have nearly stopped. This study examines the changes in U.S. wheat imports from Canada. An econometric model is developed and estimated to determine the effects of the decline in HRS wheat imports on U.S. farm price and producer revenue. The substantial decline in HRS wheat imports from Canada from the 1997/98 - 2001/02 levels to the current levels is found to have increased the spring wheat price received by farmers by about $0.15 per bushel. With the average yearly HRS wheat production totaling 481 million bushels, this price increase means an increase in annual income of $74 million. The increase in price also leads to an increase in production, and domestic sales replace imports. This increase in production leads to an additional increase in revenue of $27 million per year. The total increase in revenue for the U.S. HRS wheat industry is about $101 million per year. Some of the decline in Canadian HRS wheat exports to the United States could be due to a weakening U.S. dollar and below average Canadian production, but most is likely due to the U.S. imposition of antidumping and countervailing duties.