ANALYSIS OF U.S. WHEAT MARKET SHARES IN EAST ASIA

The effects of U.S. wheat prices, dollar values, and their volatilities on U.S. wheat market shares in 10 Asian countries are analyzed. The variables are converted to a relative form comparing the U.S. against Australian and Canadian variables in order to incorporate the effects of competition among these countries. The effects of the increased loan rates and target prices in the early 1980s and the U.S. export enhancement program (EEP) are also analyzed. Estimation results show that higher U.S. wheat prices and U.S. dollar appreciation have detrimental effects, while increases in competitors? wheat prices and currency values have cross positive effects on U.S. market shares. The importers are not sensitive to volatility in annual price and exchange rate changes. Dummy variables representing the domestic farm and trade policies are not statistically significant, implying that the two variables do not have a substantial effect on U.S. wheat export performance in the markets.international wheat trade, market share, panel unit-root test, panel estimation, Crop Production/Industries, International Relations/Trade,

THE EFFECT OF FOOD-SAFETY RELATED INFORMATION ON CONSUMERS' PREFERENCE: THE CASE OF BSE OUTBREAK IN JAPAN

This study analyzes consumers' responses to food-safety related information by evaluating if Japanese consumers have undergone a structural change in their preferences for meat due to the BSE outbreak in the country. The axiom of revealed preference is utilized to test the stability of preference in Japanese meat consumption. The matrix of weak form of revealed preference (WARP) is partitioned and Kruskal-Wallis statistics are derived to evaluate whether the switches of preference are transitory or due to a structural change. Empirical results show that Japanese meat demand has undergone a structural change, synchronized with the BSE outbreak in Japan in mid-September 2001.Food Consumption/Nutrition/Food Safety,

U.S. MEAT EXPORTS AND FOOD SAFETY INFORMATION

New information about food safety can stimulate a sudden, significant concern by the public, resulting in a pronounced change in consumer demand. One such example is the declining level of beef consumption in Europe and Japan, stemming from the outbreak of Bovine Spongiform Encephalopathy (BSE), known as mad-cow disease. This study evaluates the impacts of the BSE outbreak in Japan in September 2001 on the import demands for U.S. meat in Japan and South Korea, using a nonparametric revealed preference approach. Empirical results show that there are excess violations in the Japanese data after the timing of the outbreak, but not in the South Korean data, implying that the event has influenced Japanese meat import demand, but not South Korean meat import demand.Bovine Spongiform Encephalopathy, meat import demand, revealed preference, Food Consumption/Nutrition/Food Safety, International Relations/Trade,

THE EFFECT OF LOST EXPORTS ON U.S. BEEF PRICES

Since the discovery of Bovine Spongiform Encephalopathy (BSE) in the United States in December 2003, U.S. beef exports have declined approximately 85 percent. A number of countries, including Japan and Korea (the top export markets for U.S. beef), have banned imports of beef from the United States, while U.S. exports to other important markets, such as Mexico and Canada, have been well below previous levels. Domestic demand in the United States was not significantly affected by the BSE discovery, but the effect of decreased beef exports on U.S. price is significant. This study examines the effect of exports and other supply and demand factors on U.S. meat prices, and estimates the effect of the drop in exports on U.S. beef and cattle prices. Results indicate that if all other factors remain the same, the drop in exports results in a $0.22 per pound reduction in retail beef prices and a$0.04 per pound reduction in the slaughter steer price. Prices in 2004 remained relatively high, however, possibly due to a decline in U.S. production and strong domestic demand.Bovine Spongiform Encephalopathy, beef, pork, chicken, exports, International Relations/Trade,

A REEXAMINATION OF FRACTIONAL INTEGRATING DYNAMICS IN FOREIGN CURRENCY MARKETS

This paper reexamines foreign currency markets for evidence of fractional integration, and extends the extant literature in several important dimensions. First, we utilize a new semiparametric wavelet-based estimator, which is far superior to the more prevalent GPH estimator on the basis of mean squared error. Second, we utilize a broader and longer sample, which better facilitates the detection of long memory dynamics. Our analysis yields interesting empirical results that contrast with other recent studies. In particular, we find new evidence that a large proportion (fourteen out of nineteen) of exchange rate series display evidence of long memory, with little variation over alternative sample periods.Financial Economics,

THE EFFECTS OF THE FREE TRADE AGREEMENT AMONG CHINA, JAPAN AND SOUTH KOREA

A computable general equilibrium model is used to evaluate the economic effects of a free trade agreement among China, Japan, and South Korea on the world economy. This study is focused on estimating trade creation and diversion effects of the FTA. Results show that there are strong trade diversion effects of the FTA between the member countries and the rest-of-the-world. This is especially true for trade in the high-technology manufacturing sector between the U.S and China. This study also reveals that the member countries under the FTA tend to specialize on the basis of resource endowments, but there exists a significant amount of intra-industry trade among the member countries in all sectors except agricultural and service/utility sectors. In addition, the FTA stimulates the economies of the three countries through increased trade volume, but provides a significant negative effect on economies of non-member countries.Free Trade Agreement, Trade Diversion Effect, Trade Creation Effect, Computable General Equilibrium Model, GTAP

THIRD COUNTRY EFFECTS ON U.S. WHEAT EXPORT PERFORMANCE IN ASIAN COUNTRIES

This study examines third country effects on U.S. wheat export performance in Asian countries. An import demand model is developed to analyze the impacts of price competitiveness, exchange rates, and exchange rate volatilities on U.S. wheat market shares. The United States competes with Australia and Canada in the Asian wheat market. Empirical results show that two factors, Australian wheat price and U.S. dollar values against the Asian countries' currencies, have significant effects on U.S. market shares in this region. Furthermore, exchange rate risks between the exporting and importing countries are found to be important.international grain trade, market share, exchange rate, panel analysis., International Relations/Trade,

PRODUCTIVITY SPILLOVERS FROM INWARD FOREIGN DIRECT INVESTMENT IN THE U.S. FOOD PROCESSING INDUSTRY

Productivity spillovers in the U.S. food processing industry resulting from inward foreign direct investment (FDI) were examined for the time period of 1988 to 1992. Both Caves-type (unidirectional) and simultaneous (bidirectional) spillover models were considered in the analysis. Using the Caves-type spillovers model, foreign investment was found to have significantly negative spillovers. The technology gap between U.S. firms and foreign firms in the food processing industry was small, and it was positively related to the productivity growth. The simultaneous equation model revealed that spillovers were bi-directional in the U.S. food processing industry. The demonstration effect from foreign presence was negative, but the competition effect had even larger positive spillovers for U.S. domestically-owned firms. As a whole, the U.S. food processing industry has benefited from the competition brought by inward FDI.International Relations/Trade,

THE EFFECT OF FOOD-SAFETY RELATED INFORMATION ON CONSUMER PREFERENCE: THE CASE OF THE BSE OUTBREAK IN JAPAN

This paper uses a nonparametric approach for testing whether there is a structural change in the meat demand of Japanese consumers due to the BSE (mad-cow disease) outbreak in the country. The axiom of revealed preference is utilized to test the stability of preference in Japanese meat consumption. The matrix of weak form of revealed preference (WARP) is partitioned and Kruskal-Wallis statistics are derived to evaluate whether the switches of preference are transitory or due to a structural change. Empirical results show that Japanese meat demand is currently unstable and has undergone a structural change, synchronized with the BSE outbreak in Japan in mid-September 2001.BSE (Mad-Cow Disease), the Revealed Preference Test, WARP, structural change, Food Consumption/Nutrition/Food Safety,

THE EFFECTS OF THE BSE OUTBREAK IN THE UNITED STATES ON THE BEEF AND CATTLE INDUSTRY

On December 23, 2003, Bovine Spongiform Encephalopathy (BSE), widely known as 'mad cow disease,' was found in the state of Washington. Major beef importing countries, including Japan, South Korea, and Mexico, banned imports of beef and beef products produced in the United States. A single case of BSE occurred on May 20, 2003, in Canada, prompting the United States to close its border to Canadian beef products. Prior to these BSE outbreaks in North America, the disease was detected in the United Kingdom and Japan. U.S. consumer response to the BSE outbreak in Washington is unknown. However, the previous cases which occurred in the United Kingdom and Japan indicate that the BSE outbreaks reduced domestic consumption of beef produced in the countries and increased beef imports from BSE-free countries, suggesting that consumers in the United States may respond negatively to the BSE outbreak and reduce their consumption of beef. Based on consumer response to BSE outbreaks in the United Kingdom and Japan, the BSE outbreak in Washington could reduce domestic consumption by 10% and exports by 75%, which could decrease the price of beef about 15%, from 370cents/lb in the third quarter of 2003 to 313.7cents/lb. However, prices of pork and chicken would increase about 3%, as consumers in this country switch from beef to pork and chicken consumption. The decreased consumption and export of beef will affect prices of slaughter and feeder cattle accordingly. The price of slaughter cattle would decrease about 13.5%, and the price of feeder cattle would decrease about 16% in the United States. If there are additional BSE outbreaks in the United States, the impacts will be much more significant. Domestic consumption of beef could decrease more than 20%, and U.S. exports would shutdown completely. In this case, the domestic price of beef could decrease 26%. Prices of slaughter and feeder cattle would decrease accordingly, about 20.9% and 24.5%, respectively, which could destroy the U.S. beef and cattle industry. To isolate a future BSE outbreak in the region, it is important to improve traceability of the infected animals by introducing both country of origin and regional labeling and preserve it through the supply chain. If the labeling system is developed for the United States, and if U.S. processors could segregate cattle based on its origin by labeling, the impacts of BSE outbreaks on the U.S. beef/cattle industry could be less prominent. Labeling would allow U.S. and foreign consumers to distinguish beef coming from BSE-free regions in the United States.Production Economics,