Effect of National Level Policies on the U.S. Catfish Market

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IMPACT OF MARKETING, TRADE AND EXCHANGE RATE POLICIES
ON U.S. CATFISH MARKETS: RESULTS FROM US-Catfish MODEL
Madan M. Dey
Kehar Singh
Carole R. Engle
Aquaculture/Fisheries Center
University of Arkansas at Pine Bluff
Why Economic Modeling?
• U.S. industries have matured
• Affected by:
 Dynamics of global economy
 Federal, state policies
 International trade
• Other segments of U.S.
agriculture benefit from
economic models.
Southern Regional Aquaculture Center
Funded a project to
Develop Economic Models
of U.S. catfish & trout
US-Catfish Model: General Framework
Policy
Export
Import
Biological
Environment
Aquaculture
Technology
Policy
Policy,
Institutions &
Support Services
Consumers’
Profile
Producers’
Profile
Production
Consumption
US-Catfish Model
U.S. farm-raised catfish
Different
Products
Imported basa and tra
Imported channel catfish
Policy Options Considered
•
Changes in Catfish feed prices
•
Effects of TCI advertising
expenditures
•
Effects of various anti-dumping
tariff levels
•
Effect of COOL (Country of Origin
Labeling)
•
Changes in U.S. per capita income
•
Changes in exchange rates with
U.S. $
Behavioral Equations/Models
Behavioral Equations/Models
•Farmers
•Processors
•Consumers
• Exporters/Importers
FARM-RAISED CATFISH SUPPLY EQUATION
Variable
Pond Bank Price (¢/lb),
Fingerlings Prices (¢/lb)
Feed Price ($/bag)
Fuel Rate ($/gallon)
Electricity Rate (¢ per kwH)
Wage Rate (Average Earning, $/hr)
Domestic
Supply of U.S.
Farm-Raised
Catfish
+
-
CONSUMER DEMAND (SHARE) EQUATIONS
Variable
Price of U.S. Farm-Raised Catfish (¢/lb)
Import Unit Value of Imported Catfish (¢/lb)
Import Unit Value of Imported Basa/tra (¢/lb)
Import Unit Value of Imported Tilapia (¢/lb)
U.S. GDP per Capita (2000=100)
U.S. Population (million)
TCI Advertisement Expenditure ('000 $)
COOL
Consumers" Demand for
U.S. FarmRaised Imported Imported
Catfish
Catfish
Basa/tra
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
-
-
IMPORT DEMAND EQUATIONS
Variable
Domestic Price of Farm Raised Catfish (¢/lb)
Import Unit Value Catfish (¢/lb)
Import Unit Value Basa/tra (¢/lb)
U.S. GDP per Capita (2000=100)
U.S. Population (million)
China x-rate (CNY/$)
Import Demand for
Imported
Catfish
Basa/Tra
+
+
+
+
+
Vietnam X-rate ( VND/$)
TCI Advertisement Expenditure ('000 $)
COOL
Anti-Dumping Tariff (%)
-
+
+
+
+
+
-
PROCESSORS’ SUPPLY EQUATIONS
Variable
Round and Gutted Fresh (¢/lb)
Whole Dressed Fresh (¢/lb)
Other Fresh (¢/lb)
Fillet Fresh (¢/lb)
Whole Dressed Frozen (¢/lb)
Other Frozen (¢/lb)
Fillet Frozen (¢/lb)
Pond Bank Price (¢/lb)
Fuel Price ($/gallon)
Electricity Rate(¢/KwH)
Wage Rate (Average Earning,$/hr)
Consumer Price Index (Food &
beverages, 2000=100)
Consumer Price Index (Food and
beverages) 1982-84=100
Round and Whole
Gutted
Fresh
Dressed Other
Fresh Fresh
Whole
Fillet Dressed Other Fillet
Fresh Frozen Frozen Frozen
+
+
+
+
-
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
-
+
+
+
-
+
+
-
+
+
+
+
+
-
-
-
+
+
-
PROCESSORS’ DEMAND OF U.S. FRAM-RAISED CATFISH EQUATION
Variable
Round and Gutted Fresh (¢/lb)
Whole Dressed Fresh (¢/lb)
Other Fresh (¢/lb)
Fillet Fresh (¢/lb)
Whole Dressed Frozen (¢/lb)
Other Frozen (¢/lb)
Fillet Frozen (¢/lb)
Pond Bank Price (¢/lb)
Fuel Price ($/gallon)
Electricity Rate(¢/KwH)
Wage Rate (Average Earning,$/hr)
Consumer Price Index (Food & beverages, 2000=100)
Consumer Price Index (Food and beverages) 1982-84=100
U.S. FRAMRAISED
CATFISH
+
+
+
+
-
Impact of Policies
Effects of Changes in Feed Prices
21.41
-10%
-10%
-15%
0.65
19
14
13.29
9
4
1.12
0.94 1.53
0.69
-1
U.S. Farm-raised Catfish
Imported Catfish
Supply/Demand
Imported Basa/tra
(% change over base)
(% change over base)
5
0
-5
-0.13
Consumers'
Surplus
Farmers' Surplus
-15%
0.47 1.03
Processors'
Surplus
Total U.S. Surplus
-10
-12.25
-15
-11.91
-20
-25
-19.85
-21.53
Economic Benefits
A decrease in feed price would benefit
the U.S. farm-raised catfish industry
along with marginal gains to imported
channel catfish and basa/tra.
Effects of Changes in TCI Advertisement Expenditure
(% change over base)
0.79
1.29
0
U.S. Farm-raised Catfish
Imported Catfish
Imported Basa/tra
-5
-10
-15
-8.83
-12.09
-18.64
Supply/Demand
25%
13.72
14
12
15.12
9.66
8.79
10
8
6
4
2
0.26
0.61 1.06
0.33
0
-13.70
-20
15%
16
25%
(% change over base)
15%
5
Consumers'
Surplus
Farmers' Surplus
Processors'
Surplus
Total U.S. Surplus
Economic Benefits
An increase in TCI expenditures would
benefit U.S. farm-raised catfish marginally;
however, it would reduce imports
significantly.
Effects of Changes in Tariff on Basa/Tra
(% change over base)
2
0.51
1.02
10%
20%
1.55
0
-2
U.S. Farm-raised Catfish
Imported Catfish
Imported Basa/tra
-4
-6
-6.21
-8
15%
16
(% change over base)
2.98
4
14
12
-12
-11.47
Supply/Demand
15.12
9.66
8.79
10
8
6
4
2
0.26
0.61 1.06
0.33
0
-10
25%
13.72
Consumers'
Surplus
Farmers' Surplus
Processors'
Surplus
Economic Benefits
Imported channel catfish would benefit
more than U.S. farm-raised catfish with
an increase in tariff levels on basa/tra
imported from Vietnam
Total U.S. Surplus
Effects of COOL
2
0.44
(% change over base)
0
-2
U.S. Farm-raised Catfish
Imported Catfish
-4
Imported Basa/tra
-3.71
-6
-8
-10
-15.79
-12
-14
-16
Supply/Demand
(% change over base)
25
21.96
20
15
13.51
13.60
Consumers'
Surplus
Farmers' Surplus
10
5
0
-5
-10
Processors'
Surplus
-5.75
Economic Benefits
Total U.S.
Surplus
COOL has benefited
U.S. farm-raised catfish
marginally, but has hurt
channel catfish imports
significantly.
COOL has resulted in
an increase in U.S.
consumers and farmers’
surplus; however, U.S.
processors’ surplus have
declined marginally.
Effects of Changes in U.S. Per Capita Income
18
-10%
10%
16.43
(% change over base)
13.58
13
8
2.38
3
-2
-7
U.S. Farm-raised Catfish
Imported Catfish
Imported Basa/tra
-3.54
-5.91
-12
-13.63
Supply/Demand
25
-10%
20
(% change over base)
Increase in U.S.
per capita income
would have a
positive impact on
the catfish industry
as a whole, with a
greater positive
impact on
imported channel
catfish and
imported basa/tra.
18.89
10%
15.87
15
10
3.71
5
0.51
0
-5
-10
-15
-20
Consumers'
Surplus
Farmers' Surplus
-0.68
Processors'
Surplus
Total U.S. Surplus
-5.43
-15.33
-20.24
-25
Economic Benefits
Effects of Changes in Exchange Rates
15.00
-10%
10.59
10%
(% to base line)
10.00
5.00
0.38
1.12
0.00
U.S. Farm-raised Catfish
Imported Catfish
-5.00
Imported Basa/tra
-1.16
-0.92
-10.00
-10.74
-15.00
VIETNAM (VND/USD)
Increased Exchange Rate (VND/USD):
Increase basa/tra imports
Decrease channel catfish import
Marginally expand U.S. farm-raised catfish market
Thanks to SRAC for financial support
Thank you for your attention
Would appreciate your Feedback
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