The impact of US fresh milk production standards on dairy trade

Dorian Owen and Niven Winchester

No 1117, Working Papers from University of Otago, Department of Economics

Abstract: We analyse the impact of proposed changes in US legislation to allow greater use of dairy concentrate products in the production of fresh milk products. This change could potentially have a large impact on dairy trade as US tariffs on concentrated dairy products are low relative to average dairy tariffs. Our investigation builds a global model that identifies six dairy commodities and includes a detailed specification of the production of fresh milk products. We find that proposed changes in US legislation may lead to large proportional changes in US imports of concentrated milk products from some sources. However, as proposed changes in US regulations will only facilitate a small increase in the use of concentrated milk products in the production of fresh milk products, there are only small changes in global dairy production. We supplement results from our simulation model with a gravity analysis. Our results indicate that trade in concentrated milk products is positively related to aggregate dairy tariffs and negatively related to concentrated milk tariffs. This suggests that large tariffs on some dairy commodities influence the overall pattern of dairy trade.

Keywords: dairy trade; concentrated milk products; non-tariff barriers; US milk production standards; numerical simulation; gravity modelling (search for similar items in EconPapers)
JEL-codes: C50 C68 D58 F14 Q12 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-12, Revised 2011-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The impact of US fresh milk production standards on dairy trade (2014)
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