Madan M. Dey Kehar Singh Carole R. Engle Aquaculture/Fisheries Center University of Arkansas at Pine...

Madan M. DeyKehar Singh

Carole R. EngleAquaculture/Fisheries Center

University of Arkansas at Pine Bluff

IMPACT OF MARKETING, TRADE AND EXCHANGE RATE POLICIESON U.S. CATFISH MARKETS: RESULTS FROM US-Catfish MODEL

Why Economic Modeling?• U.S. industries have matured

• Affected by:Dynamics of global economyFederal, 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

Policy

Export Import

Production Consumption

BiologicalEnvironment

Aquaculture Technology

Policy, Institutions &

Support Services

Producers’ Profile

Policy

Consumers’ Profile

US-Catfish Model: General Framework

Imported channel catfish

U.S. farm-raised catfish

Imported basa and tra

US-Catfish Model

Different Products

• 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. $

Policy Options Considered

Behavioral Equations/ModelsBehavioral Equations/Models

Behavioral Equations/Models

•Farmers•Processors•Consumers• Exporters/Importers

FARM-RAISED CATFISH SUPPLY EQUATION

CONSUMER DEMAND (SHARE) EQUATIONS

IMPORT DEMAND EQUATIONS

PROCESSORS’ SUPPLY EQUATIONS

PROCESSORS’ DEMAND OF U.S. FRAM-RAISED CATFISH EQUATION

Impact of Policies Impact of Policies

Effects of Changes in Feed Prices

0.47

-21.53

0.65 1.03

-19.85

-0.13

-12.25 -11.91

-25

-20

-15

-10

-5

0

5

Consumers'Surplus

Farmers' Surplus Processors'Surplus

Total U.S. Surplus

Economic Benefits

(% c

hang

e ov

er b

ase)

-10% -15%

13.29

0.94

21.41

1.12 1.53

0.69-1

4

9

14

19

U.S. Farm-raised Catf ish Imported Catf ish Imported Basa/tra

Supply/Demand

(% ch

ange

over

base

)

-10% -15%

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

An increase in TCI expenditures would benefit U.S. farm-raised catfish marginally; however, it would reduce imports significantly.

0.61

9.66

1.06

13.7215.12

0.26

8.79

0.330

2

4

6

8

10

12

14

16

Consumers'Surplus

Farmers' Surplus Processors'Surplus

Total U.S. Surplus

Economic Benefits

(% c

hang

e ov

er b

ase)

15% 25%

0.79

-12.09

1.29

-13.70

-18.64

-8.83

-20

-15

-10

-5

0

5

U.S. Farm-raised Catf ish Imported Catf ish Imported Basa/tra

Supply/Demand

(% c

hang

e ov

er b

ase)

15% 25%

Effects of Changes in Tariff on Basa/Tra

Imported channel catfish would benefit more than U.S. farm-raised catfish with an increase in tariff levels on basa/tra imported from Vietnam

0.61

9.66

1.06

13.7215.12

0.26

8.79

0.330

2

4

6

8

10

12

14

16

Consumers'Surplus

Farmers' Surplus Processors'Surplus

Total U.S. Surplus

Economic Benefits

(% ch

ange

over

base

)

15% 25%

-6.21

2.98

-11.47

0.51 1.551.02

-12

-10

-8

-6

-4

-2

0

2

4

U.S. Farm-raised Catf ish Imported Catf ish Imported Basa/tra

Supply/Demand

(% c

hang

e ov

er b

ase)

10% 20%

Effects of COOL

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.

0.44

-3.71

-15.79

-16

-14

-12

-10

-8

-6

-4

-2

0

2

U.S. Farm-raised Catfish Imported Catfish Imported Basa/tra

Supply/Demand

(% c

ha

ng

e o

ve

r b

as

e)

-5.75

13.6013.51

21.96

-10

-5

0

5

10

15

20

25

Consumers'Surplus

Farmers' Surplus Processors'Surplus

Total U.S.Surplus

Economic Benefits

(% c

ha

ng

e o

ve

r b

as

e)

Effects of Changes in U.S. Per Capita Income

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.

-3.54

2.38

13.58

-5.91

-13.63

16.43

-12

-7

-2

3

8

13

18

U.S. Farm-raised Catfish Imported Catfish Imported Basa/tra

Supply/Demand

(% c

hang

e ov

er b

ase)

-10% 10%

3.71

18.89

0.51

-15.33

-20.24

-5.43

15.87

-0.68

-25

-20

-15

-10

-5

0

5

10

15

20

25

Consumers'Surplus

Farmers' Surplus Processors'Surplus

Total U.S. Surplus

Economic Benefits

(% c

ha

ng

e o

ve

r b

as

e)

-10% 10%

1.12

-10.74

0.38

10.59

-0.92 -1.16

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

U.S. Farm-raised Catfish Imported Catfish Imported Basa/tra

VIETNAM (VND/USD)

(% t

o b

ase l

ine)

-10% 10%

Effects of Changes in Exchange Rates

Increased Exchange Rate (VND/USD):Increase basa/tra importsDecrease channel catfish importMarginally expand U.S. farm-raised catfish market

Thanks to SRAC for financial support

Thank you for your attention

Would appreciate your Feedback