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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