AN ECONOMIC MODEL OF U.S. IMPORTS OF BUTTER AND MILK FAT PRODUCTS

This study developed a model to explain monthly imports of butter and butter substitutes. The U.S. imports butter and other high milk fat products that can substitute for a strict definition of butter. These products include dairy spreads, butter substitutes, anhydrous milk fat, and food preparations. The U.S. imports these high milk fat products under a tariff-rate quota system (TRQ) implemented by the World Trade Organization (WTO). This study quantified all the milk fat contained in U.S. butter and butter substitute imports. A conceptual model was developed to explain imports of these products under a TRQ system. And an econometric model was estimated to analyze the economic factors that drive over-quota imports. The model found that the wedge between U.S. and world butter prices explains much of the incentive to import overquota butter and butter substitutes.


Issue Date:
2005
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/18846
Total Pages:
25
Series Statement:
Staff Paper 374




 Record created 2017-04-01, last modified 2017-08-24

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