An Analysis of Value-Added Agricultural Exports to Middle-Income Developing Countries: The Case of Wheat and Beef Products

Abstract

This study determined probable future directions in U.S. value-added agricultural exports to middle-income developing countries (MIDCs) under the assumption of continued income growth. Import share equations for U.S. bulk, semi-processed and value-added wheat or beef products, as a percent of total U.S. wheat or beef product exports to each MIDC, were econometrically estimated using the ordinary least squares (OLS) technique. The empirical results indicate that in most MIDCs, increases in real per capita income have negative effects on the import share of processed wheat products while having positive effects on the import share of bulk wheat. However, import shares of U.S. processed beef products are likely to increase with income growth in most MIDCs.

Does lamb promotion work?

“…The import share of the domestic consumption of any commodity is often modeled as a function of real prices, exchange rates, and other variables as determined by the particular markets and commodities being analyzed (see Chang & Hsia, 2000; Durham & Lee, 2009; Jones, 2006; and Lee, Henneberry, & Pyles, 1991 for examples of meat import share models). Accordingly, we specify the import share of U.S. lamb consumption as: where M =the import share of U.S. lamb consumption (i.e., the sum of imports from Australia and New Zealand divided by U.S. lamb consumption; PM =the trade weighted price of lamb imported from Australia and New Zealand; RX =the real lamb‐trade‐weighted exchange rate of the Australian and New Zealand currencies to the U.S. dollar; TRQ =indicator variable for the removal of the U.S. tariff rate quota on imported lamb in 2001/2002; and P , I , and E are as defined in Equation 1.…”

Global market segmentation for value-added agricultural products

“…Similarly Salvacruz and Reed (1993) predicted the growth rate of U.S. agricultural exports to individual countries based on nine trade and macroeconomic variables. Lee et al (1991) provided an empirical comparison analysis of value-added wheat and beef product exports to middle-income developing countries.…”

The location of marginal production for value-added and intermediate goods: optimal policies and trade volumes

“…In 1990 high-value products accounted for approximately 75 percent of world agricultural exports (GAO, 1993b). Some authors attribute the relatively rapid growth of HVP trade to increases in the income of a number of middle-income developing countries (Lee, Henneberry, & Pyles, 1991;Lee & Robinson, 1994). Their reasoning stems from the fact that income elasticities for value-added and meat products are higher than those for food grains, and, as income increases, expenditures on HVPs tend to rise with the change in the dietary composition of food products .…”