Analysis of the Wheat Gluten Industry
Опубликовано на портале: 06-02-2004Manhattan, 1999
Department of Agricultural Economics
|Тематические разделы:||Экономика, Экономика отраслевых рынков, Экономика отраслевых рынков: Аграрная экономика|
On June 1, 1998, president Clinton approved a 3-year quota on wheat gluten imports from Australia, the European Union (E.U.), and all other nonexcluded countries. The quota will be reviewed for possible extension for up to additional 5 years. The potential for extensions is an important reason to develop a better economic understanding of this industry and the effectiveness of the implemented quotas. This thesis contains two distinct studies related to the U.S. wheat gluten industry. The purpose of the first study was to provide background on the gluten trade dispute, decipher the qualitative impacts of E.U. policies on world gluten markets, and evaluate the potential effectiveness of the U.S. quota. The U.S. industry has operated at a low level of capacity and Canada, which was excluded from the quota, has recently expanded gluten capacity. These factors are likely to significantly limit the quota’s effectiveness but may give the industry time to develop value-added products that use their primary outputs. The purpose of the second part of this study is to estimate the impacts of the wheat gluten market on the U.S. wheat protein premium markets and vice versa. Lower wheat gluten prices derived from E.U. starch subsidies have the potential to decrease the premiums for higher protein wheat. Supply and demand equations for wheat gluten and the wheat protein markets were used to develop a system of simultaneous equations. An increase in the Hard Red Winter Wheat (HRWW) protein price ratio increased demand for wheat gluten. However, wheat gluten supplies were not significant in determining U.S. wheat protein premiums. Therefore, it has not been demonstrated that E.U. starch policies affect protein premiums being paid to U.S. wheat producers.