Structural Econometric Model of the Canadian Wheat Sector

摘要

An improved model of the Canadian wheat sector incorporates the effect of beginning wheat stocks on producer price expectations, predicts Canadian Wheat Board (CWB) behavior in setting various prices, and estimates the mathematical relationships (elasticities) between U.S. grain prices and Canadian wheat exports. The model reveals that a sustained 20 percent decrease in the U.S. wheat loan rate beginning in 1986 would result in a 20 percent decrease in Canadian wheat exports that same year, a 42 percent decrease by 1990, and a 96 percent decrease in the long run from the baseline, assuming all else remains constant. A similar decrease in the U.S. corn loan rate--holding U.S. wheat loan rates and all else constant at 1985 levels--will result in a 5 percent increase in Canadian wheat exports in 1986, a 20 percent increase by 1990, and an 86 percent increase in the long run from the baseline.