ESTIMATING THE POTENTIAL ECONOMIC IMPACT OF LATE WILT OF CORN (HARPOPHORA MAYDIS) INCURSIONS INTO THE UNITED STATES

Philip Paarlberg, Ann Seitzinger and Trang Vo

No 166791, Working papers from Purdue University, Department of Agricultural Economics

Abstract: This analysis estimates the economic impacts of late wilt of corn; a seed- and soil-borne pathogen affecting corn. The assumed infestation originates in central Illinois in crop year 2012/13 and spreads through the 2017/18 crop year. The infestation triggers a loss in U.S. coarse grains exports. With no trade regionalization the export loss dominates the output loss so prices for corn and other crops fall. From 2012/13 to 2017/18 losses in returns to U.S. agricultural producers total $41.3 billion. Coarse grains producers lose $21.8 billion. That loss consists of a $20.1 billion loss to uninfested producers combined with a loss to infested growers of $1.7 billion. Losses to infested growers are concentrated on a few producers in central Illinois while the larger loss to uninfested grower is spread among growers throughout the United States. Land owners are a separate group and lose $9.9 billion. Competing crops experience reduced returns. Lower commodity prices mean gains in consumer surplus. If the export market is regionalized, the output reduction and the export loss offset. Infested corn growers continue to experience losses but higher corn prices generate gains to uninfected growers to balance the loss to infested growers.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Marketing (search for similar items in EconPapers)
Pages: 33
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ags:puaewp:166791

DOI: 10.22004/ag.econ.166791

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