WORLD DURUM TRADE MODEL

The objective of this study was to assess the competitiveness of U.S. durum wheat producers in supplying durum by estimating production levels and trade flows under alternative trade scenarios. A mathematical programming model was used to compare production levels and distribution patterns for the durum market under protectionist and liberalized market environments. Production levels and export market share over recent years indicate there has been a shift in the competitiveness of major durum exporters. The European Economic Community (EEC) has significantly increased its competitiveness over recent years, capturing export market share from both the U.S. and Canada. Although Canada has been able to maintain a relatively stable presence in the world durum export market, it has been unsuccessful in competing with the U.S. Export Enhancement and EEC Export Refund programs. To compensate for the losses in the world durum market, Canadian marketing efforts have been concentrated on selling durum to buyers in the U.S. milling industry. U.S. producers have lost market share to Canada in the domestic markets and in export market sales to the EEC over recent years, indicating that U.S. producers are losing competitiveness relative to other major durum exporters. The net result of removing current trade barriers includes increased production by the U.S. and Canada and decreased production by the EEC. Canada gains a competitive advantage relative to the U.S. and the EEC in the durum export market. The U.S. gains a competitive advantage relative to Canada in supplying durum for U.S. mills. U.S. producers in northwestern and east central North Dakota and Montana, and Canadian producers in central Saskatchewan maintain production levels across all trade scenarios, implying producers in these regions have a competitive advantage in supplying durum. This competitive advantage is based on relatively low production and transportation costs. The results of this study indicate that increased EEC exports have had a negative affect on the ability of U.S. and Canadian producers to compete in the world durum market. The U.S. is able to continue to compete with the EEC in the export market, via its EEP program, but has lost a competitive advantage in its domestic market. Canada has not provided the same level of support for exports, but has maintained a relatively stable market share by increasing sales to its nearest importer, the United States.

• Record URL:
  https://www.ugpti.org/resources/reports/details.php?id=321
• 
• Corporate Authors:

  Mountain-Plains Consortium

  North Dakota State University
  Fargo, ND  United States  58108
• Authors:
  • Vachal, K
• Publication Date: 1994-9

Language

• English

Media Info

• Features: Figures; References; Tables;
• Pagination: 46 p.

Subject/Index Terms

• TRT Terms: Competition; Costs; Exports; International; Market share; Physical distribution; Production; Transportation; Wheat
• Identifier Terms: European Commission
• Uncontrolled Terms: International competition; Transportation costs
• Geographic Terms: Canada; European Union countries; United States
• Old TRIS Terms: Trade scenarios
• Subject Areas: Economics; Transportation (General);

Filing Info

• Accession Number: 00669029
• Record Type: Publication
• Report/Paper Numbers: MPC Rept No. 94-35
• Files: TRIS
• Created Date: Nov 23 1994 12:00AM