OPERATIONAL EFFICIENCY OF A U.S./CANADIAN WHEAT POOL: A GAME THEORY ANALYSIS

William Nganje, Won W. Koo, Joon J. Park and Richard D. Taylor

No 23661, Staff Papers from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: The problem of declining wheat prices and excess supply has been the subject of recent economic studies partly because it coincides with the Federal Agriculture Improvement and Reform (FAIR) Act of 1996, and partly because efforts to decrease supply domestically have led to increased imports from Canada. This paper develops a game theory optimization model of market efficiency and derives conditions under which voluntary pooling is sustained for U.S./Canadian durum and hard red spring wheat producers. Analysis reveals that U.S. and Canadian farmers can increase farm returns with efficiency gains from pooling and by internalizing benefits from grain blending and logistics. The model is used to analyze diverse factors affecting the sustainability of such a pool.

Keywords: Crop Production/Industries; Marketing (search for similar items in EconPapers)
Pages: 19
Date: 2001
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Related works:
Working Paper: OPERATIONAL EFFICIENCY OF US/CANADA WHEAT POOL: A GAME THEORY ANALYSIS (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddsps:23661

DOI: 10.22004/ag.econ.23661

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