EVALUATION OF EXPORT ENHANCEMENT, DOLLAR DEPRECIATION, AND LOAN RATE REDUCTION FOR WHEAT

Ghis report evaluates the effect of export enhancement, dollar depreciation, and a 5-percent loan rate reduction on U.S. wheat exports for the 1986/87 crop yearL-2 Depending on one's interpretation of the European Community's motivation for its own targeted subsidy program, U.S. export enhancement bonuses have likely increased the U.S. price of wheat between 7 and 22 percent, U.S. wheat export volume between 10 and 31 percent, and U.S. wheat export revenue between 18 and 61 percent. Together, a 5-percent loan rate reduction and a change in the real value of the dollar corresponding to the actual change between the fall of 1986 and 1987 would have increased U.S. wheat export volume by over 5 percent and U.S. export revenue by over 6 percent. The loan rate reduction causes a greater response in expanding wheat sales, but the exchange rate change is potentially more important for increasing U.S. wheat export revenue. The EC's comparative disadvantage in world wheat trade makes it extremely vulnerable to policies of the United States and to currency realignments.


Issue Date:
1989-04
Publication Type:
Report
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/278157
Language:
English
Total Pages:
33
Series Statement:
AGES 89-6




 Record created 2018-10-12, last modified 2020-10-28

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)