A Market Analysis of a Set-aside Program by the Five Major Grain and Oilseed Exporting Countries

Nominal grain and oilseed prices have declined dramatically from the high levels observed in the mid-1990s. As a result, it has been suggested by some industry stakeholders that measures should be taken to limit world crop supplies to raise prices. One such measure is a set-aside program involving a number of participants that would significantly reduce the quantity of land in production over a certain period of time. In fact, the European Union and the United States currently have set-aside programs that, together, already have had a positive effect on crop prices. Set-aside programs could also become relevant if the use of the World Trade Organization blue box is extended to more countries after the next round of negotiations. This analysis focuses on the quantitative aspects of a substantial multi-country, multi-commodity, set-aside program and its impact on major agricultural commodity prices. Three main conclusions can be drawn from the analysis: · A permanent set-aside program would be necessary to keep prices from returning to relatively low levels · Even with a permanent set-aside program, the results show a declining effect over time mostly because of additional production by non-participating countries and because of crop substitution in favour of cereals and oilseeds and higher yield in participating countries. · For a set-aside program to have any significant impact on prices, the program must include many commodities in many countries. A program involving Canada alone is doomed to fail. And given that the United States and the European Union-two large producers-already have their respective set-aside programs, it might be difficult to convince them to participate in an international effort.Agricultural and Food Policy, Demand and Price Analysis,

Medium Term Outlook for Canadian Agriculture - International and Domestic Markets

The purpose of this document is to describe the features of the Agriculture and Agri-Food Canada (AAFC) Medium Term Outlook for Canadian Agriculture (previously entitled Medium Term Policy Baseline) covering the period 2008 to 2018. The outlook is an attempt to outline a plausible future of the international and domestic agri-food sectors. It serves as a benchmark for discussion and scenario analysis. The outlook makes specific assumptions and outlines their implications. Since it assumes that policies remain unchanged from existing legislation, the outlook is not a forecast of future events. The medium term assumptions used and published by the OECD/FAO in the Agricultural Outlook are by in large maintained in the AAFC's outlook but updated to reflect short term price forecasts produced and released by the U.S. Department of Agriculture (USDA) in November 2008. The November 2008 macroeconomic forecast published by the International Monetary Fund (IMF) was also incorporated in the outlook and in particular a 32% reduction in the crude oil price in 2009. AAFC assumed that 3 years will be necessary before the crude oil price returns to the level used in the OECD/FAO medium term outlook. The world prices generated by this process combined with the macro-economic forecast for Canada published by the Conference Board in December 2008 are the key inputs used to produce the Canadian agricultural markets outlook. The key sectors covered are grains, oilseeds and products, special crops, bio-fuels, beef/cattle, pork/hogs, milk and dairy products, chicken, turkey and eggs.Outlook, Agriculture, Cereals, Oilseeds, Bio-fuels, Livestock, Red meats, Milk, Dairy products, Chicken, Turkey, Eggs, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

The Impact of Foot and Mouth Disease Outbreaks in Taiwan and South Korea on the Red Meat Industries in Canada and the United States

In addition to trade liberalization, other factors have contributed to the strong growth of red meat production in Canada since the end of the 1980s. In particular, the outbreaks of foot and mouth disease (FMD) in Taiwan and in South Korea eliminated two competitors in the Japanese market. This reduction in supply caused an increase in the price of hogs in the United States and Canada of 2.5% and 3% respectively during the 1997 to 2007 period. The higher price stimulated Canadian production by an average of 5%, and by 2% in the United States. Annual agricultural farm receipts from the hog market were greater by an average of $CD 276 million (9$CD 3 billion over the 11 years. Moreover, the value added in the red meat processing industry was on average $CD 158 million higher (5$CD 1.7 billion. Finally, the value of exports of the red meat supply chain is on average $CD 239 million higher (4.4$CD 2.6 billion during these 11 years.red meats, Japan, South Korea, Taiwan, foot and mouth disease, economic impact, pork, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

Medium Term Outlook for Canadian Agriculture

The purpose of this document is to describe the features of the Agriculture and Agri-Food Canada (AAFC) Medium Term Outlook for Canadian Agriculture (previously entitled Medium Term Policy Baseline) covering the period 2007 to 2017. The outlook is an attempt to outline a plausible future of the international and domestic agri-food sectors. It serves as a benchmark for discussion and scenario analysis. The outlook makes specific assumptions and outlines their implications. Since it assumes that policies remain unchanged from existing legislation, the outlook is not a forecast of future events. The medium term assumptions used and published by the OECD/FAO in the Agricultural Outlook 2007-2016 are by in large maintained in the AAFC's international agricultural markets outlook but updated to reflect short term price forecasts produced and released by USDA in October 2007. The world prices generated by this process combined with the macro-economic forecast for Canada published by the Conference Board in September 2007 are the key inputs used to produce the Canadian agricultural markets outlook. The key sectors covered are grains, oilseeds and products, special crops, bio-fuels, beef/cattle, pork/hogs, milk and dairy products, chicken, turkey and eggsOutlook, agriculture, cereals, oilseeds, bio-fuels, livestock, red meats, milk, dairy products, chicken, turkey, eggs, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

Medium Term Outlook for Canadian Agriculture International and Domestic Markets

The purpose of this document is to describe the features of the MTO covering the period 2010 to 2020. The MTO is a plausible future for the international and domestic agri-food sectors based on current policies in Canada and other countries as of Fall 2010. It serves as a benchmark for discussion and scenario analysis. The outlook makes specific assumptions and outlines their implications. Since it assumes that policies remain unchanged from existing legislation, the outlook is not a forecast of future events. In particular there are no assumptions made regarding the outcome of the Doha round of trade negotiations. It also assumes no impact from climate change and from policy to mitigate climate change nor significant animal disease outbreaks or unusual climatic conditions over the period of the outlook. The starting point of the MTO is world agricultural commodities price projection based on the OECD/FAO Agricultural Outlook for 2009/2019 adjusted with more recent information. The Canadian macro-economic forecasts are from the Conference Board of Canada outlook published in September 2010. In addition, short-term price forecasts have been updated using United States Department of Agriculture (USDA) projections released in October 2010. For example, droughts in some southern hemisphere countries and China as well as the foot and mouth outbreak in South Korea have not been taken into account.Outlook, Agriculture, Cereals, Oilseeds, Bio-fuels, Livestock, Red meats, Milk, Dairy products, Chicken, Turkey, Eggs, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

Economic Analysis of the Liberalization of Red Meat Markets in the Pacific Region from 1988 to 2007

The liberalization of red meat (beef and pork) markets since 1988 is a good example of government action that has led to significant gains for the Canadian and American agri-food industries. Japan, South Korea and Mexico are the main countries that have liberalized their red meat markets since 1988. This industry has also benefited from the agreement between Canada and the United States. It has also made gain from the liberalization of the pork market in Australia and the Philippines, and the beef market in Indonesia. This analysis captures the impact on the price received by farmers as well as on Canadian production in the absence of these increased market access. The combination of lower prices and lower production would have caused annual average decreases in farm cash receipts drawn from the cattle and hog market equal to C$776 million and C$486 million, respectively, for a grand total of C$25.7 billion over this 20-year period (1988-2007) for the entire agriculture industry. Additionally, the value added of the red meat processing industry would have dropped by an average of C$432 million per year, for a total loss of C$8.6 billion. Finally, the value of exports of the red meat supply chain would have dropped by an average of C$1.044 billion per year, for a grand total of C$21 billion over this 20-year period.liberalization, benefits, red meats, pork, beef, Japan, Korea, Mexico, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

Medium Term Outlook for Canadian Agriculture - International and Domestic Markets

The purpose of this document is to describe the features of the Agriculture and Agri-Food Canada (AAFC) Medium Term Outlook for Canadian Agriculture covering the period 2009 to 2019. The outlook is an attempt to outline a plausible future of the international and domestic agri-food sectors. It serves as a benchmark for discussion and scenario analysis. The outlook makes specific assumptions and outlines their implications. Since it assumes that policies remain unchanged from existing legislation, the outlook is not a forecast of future events. In particular there are no assumptions made regarding the outcome of the Doha round of trade negotiations. It also assumes no impact from climate change and from policy to mitigate climate change nor significant animal disease outbreaks or unusual climatic conditions over the period of the outlook. The starting point of the international baseline is the so-called lower GDP slow recovery medium term scenario published in the OECD/FAO Agricultural Outlook 2009-2018. This scenario was updated in the short term using macro-economic forecasts released by the OECD in September 2009 and by the World Bank in June 2009. Exchange rates were updated to reflect the information released at the end of 2008 and in the first 6 months of 2009. The agricultural outlook was updated to reflect short term price forecasts produced and released by the U.S. Department of Agriculture (USDA) in October 2009.outlook, agriculture, cereals, oilseeds, bio-fuels, livestock, red meats, milk, dairy products, chicken, turkey, eggs, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

Genetic diversity of Mycoplasma hyopneumoniae isolates of abattoir pigs

Mycoplasma hyopneumoniae, the causative agent of porcine enzootic pneumonia, is present in swine herds worldwide. However, there is little information on strains infecting herds in Canada. A total of 160 swine lungs with lesions suggestive of enzootic pneumonia originating from 48 different farms were recovered from two slaughterhouses and submitted for gross pathology. The pneumonic lesion scores ranged from 2% to 84%. Eighty nine percent of the lungs (143/160) were positive for M. hyopneumoniae by real-time PCR whereas 10% (16/160) and 8.8% (14/160) were positive by PCR for M. hyorhinis and M. flocculare, respectively. By culture, only 6% of the samples were positive for M. hyopneumoniae (10/160). Among the selected M. hyopneumoniae-positive lungs (n = 25), 9 lungs were co-infected with M. hyorhinis, 9 lungs with PCV2, 2 lungs with PRRSV, 12 lungs with S. suis and 10 lungs with P. multocida. MLVA and PCR-RFLP clustering of M. hyopneumoniae revealed that analyzed strains were distributed among three and five clusters respectively, regardless of severity of lesions, indicating that no cluster is associated with virulence. However, strains missing a specific MLVA locus showed significantly less severe lesions and lower numbers of bacteria. MLVA and PCR-RFLP analyses also showed a high diversity among field isolates of M. hyopneumoniae with a greater homogeneity within the same herd. Almost half of the field isolates presented less than 55% homology with selected vaccine and reference strains

Documentation of the European Comission’s EU module of the Aglink-Cosimo modelling system

This report documents the EU module of Aglink-Cosimo model. Aglink-Cosimo is a recursive-dynamic, partial equilibrium, supply demand model of world agriculture developed by the OECD and FAO Secretariats. The model is used to simulate development of annual supply, demand and prices for the main agricultural commodities produced, consumed and traded worldwide. Aglink-Cosimo covers 44 individual countries and 12 regions, and 40 commodities clearing markets at the world level. At the EU level, the Aglink-Cosimo model is used to produce the "Prospects for Agricultural Markets and Income in the EU". This is a yearly exercise that provides a detailed overview of EU agricultural markets with a 10 year time horizon. It incorporates information from policy makers and market experts in the European Commission, stakeholders, researchers and modellers. The EU Outlook intends to provide a broad consensus about the evolution of European Agriculture in the medium-term. It serves as reference timeline for counterfactual policy analysis and market analysis done in numerous research sites in Europe. The report includes a detailed presentation and discussion of the structure and specific features of the model, along with the theoretical underpinnings. It also documents the process of calibration such as to obtain a medium-term baseline and different efforts towards the validation of results. Nonetheless, different applications in the area of uncertainty analysis and the use of partial stochastics are also included.JRC.J.4-Agriculture and Life Sciences in the Econom

Enhancing the Brazilian land use module in Aglink-Cosimo

The primary objective of this report is to document the improvements made to the Brazilian module of the Aglink-Cosimo model (Enciso et. al. 2015) (OECD/FAO, 2015) related to the inclusion of land use dynamics. Aglink-Cosimo is an agricultural partial equilibrium model developed by the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) in partnership with some member countries of these organisations. It is a partial equilibrium model used to simulate the annual developments of supply, demand and prices for the main agricultural commodities produced and traded worldwide over a 10 year period. It is a recursive-dynamic model, since current economic decisions are reached by taking into account lagged information on prices and quantities. Aglink-Cosimo model is a central model to the integrated Modelling Platform for Agro economic Commodity and Policy Analysis (iMAP) of the Joint Research Center (JRC) of the European Commission. Its main objectives are the implementation of quantitative tools for commodity market and agricultural policy analysis, and the preparation of a benchmark for the assessment of agricultural policies in a medium to long-term horizon (so-called 'baseline'). Models in iMAP are used in stand-alone mode or in combination, so as to address a broad range of topics linked to the economic assessment of the agricultural and rural development policies, as well as those concerning related topics such as trade, energy, environment, and climate change. The model improvements to the Brazilian module reported here are important to assess the effects of domestic policy changes on the economic performance of the Brazilian agricultural sector, but also to analyse how agricultural production and land use in Brazil would respond to changes in world market commodity prices . The utilised agricultural area (UAA) in Brazil has increased in recent years, mainly driven by increases in multiple cropping and livestock density on pastureland. Here we propose a methodology to capture the multi cropping aspect of Brazilian agricultural in Aglink-Cosimo and expand the crop coverage of the model to also include pasture land and beans. Moreover, in order to capture the changing livestock density on pastureland, a beef cow intensity function (i.e. cow inventory divided by land use) is estimated using historical data. Last but not least, the movement and allocation of crops within Brazil are discussed in relation to their distance from ports and the associated transport costs. Internal transport costs are included in model as a relative discount to the export price depending on the distance to ports for specific crops. In order to test the behaviour of the revised model, three illustrative scenarios are included in the report. A first scenario focuses on the economic impacts in the Brazilian agricultural sector of an abolishment of the biofuel blending mandates. In a second scenario, the land use effects of an intensification of cattle production in Brazil are analysed. Lastly, a scenario on the reduction of transport costs between the State of Mato Grosso and the port of Santos for agricultural commodities due to better infrastructures is depicted, with a clear focus on balance of trade effects. These scenarios show that the land use response in Brazil is strongly linked to the world market. This is not surprising, since Brazil is an important exporter of agricultural commodities, for instance soybeans and beef. The proposed scenarios also demonstrate the importance of having a complete model like Aglink-Cosimo to analyse direct and indirect land use changes.JRC.D.4-Economics of Agricultur