Book Description

Extract: Import demand and export supply elasticities for grains, soybeans, and cotton for the Western Hemisphere countries studied suggest that neither imports nor exports will be very responsive in the medium run (2-3 years) to a reduction in U.S. commodity prices stemming from the Farm Security Act of 1985, because domestic and trade policies insulate domestic prices from changes in world prices. Import demand for feed grains and soybeans is generally more responsive to price declines than food grains. Factors other than price are often more important in influencing import decisions. But policies can change quickly, especially in many Latin American countries; a period of sustained lower U.S. prices may elicit policy changes in the long run that make import demand more responsive to lower prices.