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Abstract
A two-stage budgeting procedure was employed to analyze (1) the
Japanese import demand for barley and (2) allocation of Japanese
barley imports between North America (Canada and the United
States) and Australia. It was found that the import demand for
barley was price inelastic and corn was a substitute for barley.
Japanese barley imports were also influenced by size of the cattle
herd and the number of cattle slaughtered. Price competition
played a significant role in import allocation and budget shares
of the two suppliers were proportional to total import
expenditure. Starting in April 1991, import quotas and the
involvement of the Livestock Industry Promotion Corporation (a
quasi-government agency) in the Japanese beef trade will be
replaced with higher tariffs and direct negotiations between
traders. These changes promise easier access to the Japanese beef
market and have been predicted to exert adverse impacts on the
Japanese cattle industry. Different responses of the Japanese
cattle industry under trade liberalization were assumed and were
combined with the estimated econometric models to forecast
Japanese barley imports in total and by country of origin. The
effect of a reduced price for North American barley was also
investigated as reduced total imports under trade liberalization
may intensify price competition.