Substitution Between U.S. And Canadian Wheat By Class
The importation of hard red winter and durum wheat from Canada has been a source of contention among U.S. wheat growers, due to the likeness between domestic and imported Canadian wheat. It has also been investigated as a source of material injury to the U.S. market. We examine the relative substitution between U.S. and Canadian wheat, by class, by treating wheat as an input in flour production. We find that while U.S. hard red spring wheat and U.S. hard red winter wheat are economic substitutes, there is limited price substitution between U.S. and Canadian durum and U.S. and Canadian hard red spring wheat. Quality differences from the millers' perspective may be the reason driving the import demand for hard red spring and durum wheat from Canada.
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