World Perspectives
wheat

When Price is a Poor Indicator

Few markets are as distorted as those involving agriculture. Governments typically impose higher tariffs on food to support domestic production even when it is at the expense of consumer welfare. Some governments will even starve their own people during wars or due to geopolitical objectives. Additionally, food is substitutable and so if wheat is expensive there may be a switch to rice or some other lower priced grain. Consequently, price is not always a good indicator of trade opportunities.  For example, in Turkey the producer price of wheat is the equivalent of $199.60/MT and the country imports the equivalent of 11.8 MT/per capita of wheat. Meanwhile, in Oman the local value of wheat is a whopping $929.80/MT and yet imports are le...

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From WPI Consulting

Communicating importance of value-added products

Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.

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