NORTH AMERICAN MALTING BARLEY TRADE Differences in Quality and Marketing Costs

Abstract

This research was completed under a special USDAICSRS Special Grant 89-02580 titled "lnternutional Marketing and Trade Policies for Northern Grown Crops. " Diflerences between U.S. and Canadian marketing policies in malting barley have been identified as potential sources of trade distortions. Most important are issues related to quality control, yield di$erentials between feed and malting varieties, and diferences in handling costs. l%is study anaiyzes effects of changes in selected marketing policies on trade flows and p&es in the North American malting barley sector using a mathematical programming model. Simulation results illustrate impacts of relaxed variety release requirements, increased selection rates for malting barley, reduced Canadian handling costs and the effect of increased Canadian exports of malting barley to oflshore markets. lhe results quantify e$ects of these strategic issues on both the United States and Gmadian barley sectors. Les di$drences entre les regimes de commercialisation de l'orge de malterie-brasserie aux &ats-Unis et au Canada pourraient &tre la cause de distorsions des echanges commerciaux. Mentionnons en particulier les questions touchant le contrc%e de la qua&e, les diflerences de rendement entre les vat-i&t% four-rag&-es et les van'&% brassicoles et les diflerences a$ectant les coats de manutention. Au moyen d iut modele de programmation mathematique, nous analysons les effets de modifications affectant certaines politiques de commercialisation sur les flux des t?changes entre les deux pays et sur les prix aarts le secteur nord-am&icain de 1 'orge de brasserie. L.es simulations mettent en evidence les impacts d 'une reglementation plus souple des conditions & mise au commerce des vari&s, du relevement des criteres de selection pour 1 'orge brassicole, d 52ne diminution des cot&s de manutention canadien ainsi que 1 'e$et d 'un accroissement des exportations canadiennes d 'orge brassicole vers les marches d 'outremer. L.es resultats permettent de quantifier les effets de ces questions strategiques sur le secteur de 1 'orge du Canada et des ktats-Unis.

State Trading Enterprises in a Differentiated Product Environment: The Case of Global Malting Barley Markets

“…Let x 1 , x 2 , and x 3 represent total sales of malting barley to the world market by the CWB (equation (1)), ABB (equation (2)), and the other malting-barley-exporting countries (equation (3)), respectively, and denote the downstream inverse demand functions of 4 Agronomic practices, soil characteristics, and climatic conditions determine the barley varieties grown in different regions, and downstream brewers have specific quality requirements in terms of acceptable varieties, protein, plumpness, and germination (Wilson and Johnson, 1995). Trade practices such as credit terms, delivery dates, and ancillary services add to the overall product differentiation.…”

“…Finally, general support for some form of STE leadership emerged from a variety of studies employing time-series analysis of international grain prices Smith, Goodwin, and Holt, 1995;Spriggs, Kaylen, and Bessler, 1982;and Goodwin and Schroeder, 1991). Much past work has also focused on price discrimination and price pooling (Carter, 1993;Schmitz and Gray, 2000;Alston and Gray, 2000;Brooks and Schmitz, 1999), singledesk selling (Clark, 1995;Dixit and Josling, 1997;Gray, Ulrich, and Schmitz, 1993;Brooks, 1993;Carter and Smith, 2001), and marketing policy and practice (Wilson and Johnson, 1995;Carter, Loyns, and Berwald, 1998). Strategic behavior, delayed payment systems, and other strategic factors generally have been ignored.…”

Canadian Exports of Livestock and Meat to the United States

“…Trade flows between the United States and Canada and their effect on domestic prices have been extensively considered (e.g., see Worley, Baldwin and Thraen 1991;Boyd, Doroodian and Abdul-Latif 1993). Much of the existing literature focuses on grains and dairy (e.g., see Mohanty 1995;Wilson and Johnson 1995;Sumner, Alston and Gray 1994;Koo 1998). A number of studies have focused on livestock and red meat trade, although few have been externally published.…”

Pressures and Challenges in Integrating the U.S.-Canada Grains Sector

“…This is likely due to important differences in malting barley varieties (Wilson and Johnson 1995a) which may have constrained the potential for increased flows from Canada to the United States. Wilson, W., and Bruce L. Dahl.…”