Browsing by Author "Schweizer, Heidi"

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The economic impacts of the Canadian Wheat Board ruling on U.S.-Canada malt barley contracting
(Montana State University - Bozeman, College of Agriculture, 2013) Schweizer, Heidi; Co-chairs, Graduate Committee: Anton Bekkerman and Vincent H. Smith
The August 2012 termination of the Canadian Wheat Board's (CWB) monopsony and monopoly powers changed the market structure for Canadian grains. In this paper, we examine what this change means for North American malt barley markets. We develop decision-making models of Canadian barley producers and U.S. malt barley procurers (maltsters), and account for the relative costs of altering each party's existing contracting decisions. The contract decision model provides the foundation for an empirical simulation-based analysis of contracting decisions by Canadian and U.S. malt barley market participants in the new institutional environment. The simulation model is calibrated to jointly characterize the relationship among Canadian malt barley production factors such as yields and expected barley malting rates; transportation costs impacting U.S. firms; and relevant government policies and changes. The latter category includes termination of the CWB's single-desk authority and the continuing jurisdiction of the Canadian Grain Commission and the Canadian Transportation Act (1996). Our model suggests that terminating the CWB's monopsony and monopoly powers may give U.S. brewers and Canadian farmers incentives to contract for malt barley and further deregulation of transportation rates and wheat variety controls could benefit North American malt barley farmers. However, those incentives are not so substantial as to guarantee U.S. maltsters will contract with Canadian farmers for the procurement of malting barley.
The Impacts of the Canadian Wheat Board Ruling on the North American Malt Barley Markets
(2014-07) Bekkerman, Anton; Schweizer, Heidi; Smith, Vincent H.
The 2011 Marketing Freedom for Grain Farmers Act deregulated Canadian grain markets and removed the Canadian Wheat Board (CWB) as the sole buyer and seller of Canadian grain. We develop a rational expectations contract decision model that serves as the basis for an empirically informed simulation analysis of malt barley contracting opportunities between Canadian farmers and U.S. maltsters in the deregulated environment. Comparative statics and simulation results indicate that some new opportunities for contracting are possible, but the likelihood of favorable conditions for U.S. maltsters to contract with Canadian rather than U.S. farmers is low—between 9% and 35% over a range of possible selection rates. The effects on contracting of the termination of the Canadian grain transportation revenue cap policy and of the relaxation of criteria for the release of new spring wheat varieties are also investigated. While changes to grain transportation policies are not likely to significantly affect favorable conditions for contracting, reducing constraints on Canadian farmers’ access to higher yielding wheat varieties could increase the returns from growing spring wheat but decrease the likelihood of contracting for malt barley with U.S. maltsters by an average of 5.3 percentage points.