Chapter 6
Sanitary Regulations and Canadian - U.S. Trade in Cattle: An
Evaluation of the Northwest Pilot Project
Linda M. Young and John M. Marsh
Introduction
This paper examines the impact of potential growth in demand
for feeder cattle in Alberta on stock growers in Montana, and
discusses two conflicting proposals that would change sanitary
regulations for cattle moving across the U.S.–Canadian border.
The Northwest Pilot Project would reduce regulations to facilitate
the movement of live cattle across the border of Montana. This
proposal has been advanced by industry associations on both sides
of the border. Recently, the Animal Plant Health Inspection Service
(APHIS) released the Regionalization Proposal which would, due
to a change in Canada's livestock health classification, increase
the sanitary requirements for moving live cattle across the border.
As many economists have noted, with the decrease in both tariffs
and quotas due to the implementation of the Canada U.S. Free
Trade Agreement (CUSTA) and the North American Free Trade Agreement
(NAFTA), sanitary barriers are of greater relative importance
(Josling). The Uruguay Round Agreement, and NAFTA both contain
provisions specifying the basis for sanitary regulations that
affect trade.
One purpose of this paper is to estimate the value of the
Northwest Pilot Project for Montana cow-calf producers. The second
purpose is to discuss the challenges of attempting to incorporate
sanitary regulations into an empirical model. These issues will
become increasingly more important as agricultural economists
turn their attention to evaluating technical barriers to trade.
Alberta's Cattle Feeding Industry
Alberta is the center of Canada's cattle feeding and packing
industry. This industry is in a period of expansion for several
reasons. First, the industry believes that there will be an increasing
demand for boxed beef in the Pacific Rim and feels that Alberta
has an advantageous position to service that market. Secondly,
removal of transportation subsidies on August 1, 1995, was expected
to decrease the price of barley used for domestic feed. Previously,
grain shippers only had to pay a portion, roughly half, of the
rail rate to move grain to offshore export position, and the
government paid the rest. The removal of subsidies has been expected
to result in lower exports of grain, and an increase in the use
of grain for livestock feeding (Producer Payment Panel). This
has not been observed in the year after the removal of subsidies
due to unusually high grain prices worldwide, however, it is
expected over the long run. Finally, removing Canada from the
countries that face restrictions on exports to the United States
under the U.S. Meat Import Act encouraged the decision by Cargill
and Iowa Beef Packers (IBP) to invest in facilities in Alberta.
Figure 6.1 shows the increase in Alberta's beef cattle herd
over the years 1980-1996. Canada's cyclical increase in its herd
preceded the increase in the U.S. herd by a few years (refer
to Figure 6.1 and Figure 6.2). Herd expansion was further stimulated
by the expectation of increases in Alberta's packing capacity.
FIGURE 6.1 ALBERTA BEEF COW INVENTORY, 1980-96
 |
FIGURE 6.2 U.S. BEEF PRODUCTION, 1985-95
 |
U.S. – Canada Cattle and Beef Trade
U.S. – Canadian trade consists of trade in both live
cattle and boxed beef. U.S. imports of Canadian feeder and slaughter
cattle have approximately doubled since 1989, and reached 1.1
million head in 1995 (refer to Figure 6.3). Recent data show
that a comparison of the first seven months of 1996 with a comparable
period in 1995 indicates that imports were 138 percent of the
previous year (Livestock Marketing Information Center). This
is thought to be partially accounted for by an expansion of Alberta's
herd in expectation of increased slaughter capacity at Cargill.
However, as slaughter capacity did not increase on the time line
expected, some of these cattle were exported to the United States.
U.S. exports of live cattle to Canada have been much smaller
than imports, with 67,000 head being exported to Canada in 1995
(Marsh and Peck).
FIGURE 6.3 U.S. CATTLE IMPORTS AND EXPORTS TO CANADA, 1985-95
 |
Several reasons exist for two way cross border trade in live
cattle. Canada and the United States have different grading systems.
In Canada, the accepted weight for carcasses is within a range
of 600-750 pounds, and carcasses above that weight are discounted
(Dumford). The United States has a higher upper range for carcasses
of 700-850 pounds. This means that there is an incentive for
stock growers to ship heavy cattle to the U.S. market if additional
transportation costs are less than the discount due to the heavy
carcass weight. Seasonality also plays a role in determining
import demand for cattle in Canada. Production patterns for spring
born calves in Alberta result in a shortage of cattle in late
fall and early winter, and during this window the industry anticipates
looking to a wider area for their supplies of cattle.
Figure 6.4 shows U.S. boxed beef imports from and exports
to Canada since 1985. Trade in both directions has increased,
and the net trade balance is relatively small. Overall, net imports
of cattle and beef, converted to a carcass weight equivalent,
are only 3.57 percent of U.S. beef production (refer to Figure
6.5). The small size of net imports from Canada compared to the
U.S. market is an important factor in evaluating the impact of
increased demand for feeder cattle in Alberta on U.S. feeder
cattle prices.
FIGURE 6.4 U.S. BOXED BEEF IMPORTS FROM AND EXPORTS TO CANADA,
1985-95
 |
FIGURE 6.5 IMPORT/EXPORT DIFFERENTIAL
AS A PERCENTAGE OF U.S. PRODUCTION*
 |
Given the expansion of Alberta's packing capacity, the Alberta
industry expects to import feeder cattle from the United States
(Thorlakson). The level of imports depends on future increases
in plant capacity, supply response from Alberta's stock growers,
and the cost and availability of feeder cattle from Saskatchewan.
Anticipation of increased flows of cattle from northern tier
states in the United States to Alberta has been an important
motivation for the Northwest Project.
Trade Agreements and Sanitary Restrictions
on Trade
Both the Northwest Pilot Project and the Regionalization Proposal
advanced by APHIS must satisfy the conditions for sanitary regulations
outlined in the Sanitary and Phytosanitary Agreements (SPS) of
the Uruguay Round Agreement of the General Agreement on Tariffs
and Trade (GATT), and NAFTA. While the agreements differ slightly,
both agreements state that regulations must be:
• based on science: All standards must be based on science,
and the procedures used for risk assessment must meet internationally
accepted standards. Countries are encouraged to work towards
international harmonization by adopting the standards developed
by the Office Internationale Des Epizootices (OIE). This organization
was designated by the World Trade Organization (WTO) to set standards
for animal health. A country can choose to impose a more stringent
standard to reflect a preferred level of risk if the standard
is based on science; however, more stringent standards may be
challenged by other members of the WTO.
• consistent: Restrictions should be the same for all
countries exporting to the country, where similar conditions
exist. However, restrictions can diverge due to differences in
climate, existing pests, or disease, including pest-free or disease-free
areas. In addition, regulations for imports should not be more
stringent than those imposed on the domestic industry.
• transparent: All regulations must be published, and
new regulations should be implemented in such a manner to give
exporters time to adjust.
Two proposals have been advanced that would affect U.S.–Canada
trade in live cattle. The first is the Northwest Pilot Project,
a regional proposal first advanced by the cattle industry in
1995, to facilitate trade over the border. The second is the
Regionalization Proposal released by APHIS in April 1996. This
proposal includes a new strategy for assessment of the disease
risk posed by animal imports based on regions, rather than the
country of their origin. This reflects the wording of both the
NAFTA-SPS and the WTO-SPS:
A Member country shall recognize the concepts
of regions of low pest or disease prevalence, and shall ensure
that its sanitary and phytosanitary measures are adapted to take
into account the characteristics of regions from which products
originate and to which products are destined. In doing so, the
Member should take into account relevant geography, ecology,
methods of surveillance and effectiveness of control systems
(APHIS).
It is argued that the implementation of the Regionalization
Proposal will expedite U.S. negotiation of export protocols and
trade agreements. Adoption of similar measures by importers from
the United States means that under specified conditions, disease-free
regions of the United States will not be barred from the export
market due to the presence of risk in other U.S. regions.
The Proposed Northwest Pilot Project
Purpose
The purpose of the pilot project is to reduce the cost of
moving animals across the border by reducing unnecessary sanitary
requirements and by streamlining procedures. Unnecessary sanitary
requirements are those that cannot be justified on the basis
of science. Specifically, it is proposed that:
• The United States would recognize Canada's disease-free
status for brucellosis and tuberculosis, and eliminate the test
and vaccination requirements for Canadian cattle entering Montana
(Rath);
• Canada would create special feedlots which could import
feeder cattle (for the period October 1 to March 31) from Montana
without tests for anaplasmosis, brucellosis, or tuberculosis,
subject to strict requirements for identification and records
indicating that all sales are to packers only; and
• Both countries would streamline operational procedures
used to implement the regulations to reduce the cost and shorten
the process of moving the livestock from one country to another.
Montana has been chosen due to its supply of feeder cattle,
low incidence of disease, and proximity to Canada.
The project is proposed for a two-year period, at which time
it would be evaluated.
Current Regulations
Canadian Regulations. Currently, cattle entering Canada
from the United States, and Montana specifically, must be tested
for anaplasmosis, brucellosis, and tuberculosis. The tests cost
$25/head (Rath). Cattle may also be required to have tests for
bluetongue, depending on their origin and the time of year; however,
as these regulations are complex and peripheral to the discussion
they will not be discussed here. In Montana there are certification
fees at the border of $49.50/head for the first animal and $1.50
for each animal after that included in the shipment. This means
that the tests add approximately $27/head to the cost of the
animal. In addition, complying with border regulations takes
management time and skills.
U.S. Regulations. Cattle entering the United States
from Canada are subject to both federal requirements and additional
requirements that vary by state. Federal regulations require
that cattle be tested for brucellosis and tuberculosis, and usually
these tests can be performed before shipment to the border. In
addition, the State of Montana requires that cattle be vaccinated
for brucellosis.
The Approval Process
Implementation of the Northwest Pilot Project will require
approval from federal agencies from both countries. On the U.S.
side, APHIS would need to grant a waiver for the test requirements
for brucellosis and tuberculosis. The State of Montana would
also need to change a state statute regarding brucellosis vaccination
for Canadian cattle. On the Canadian side, Ag Canada would need
to change existing testing requirements and regulations for cattle
destined for special feedlots without testing for anaplasmosis,
brucellosis, and tuberculosis would need to be enacted. Neither
party has indicated a willingness to implement changes unilaterally.
The Regionalization Proposal
In April, 1996, APHIS released the "Regionalization Proposal"
that has new disease- specific risk-based regional requirements
for the importation of animals. The concept behind this proposal
was discussed previously. If adopted as originally proposed,
there could be significant implications for U.S.–Canadian
trade in live cattle. The proposal classifies Canada's health
status for Brucella abortes as having a slight risk, for
Brucella san biovar-4 as having an unknown level of risk,
and for tuberculosis as low risk. The implications of these classifications
would be to increase the requirements for moving Canadian cattle
across the border. Interpretation of the health classification
for tuberculosis, for example, is that Canadian cattle would
be held at the border for 72 hours for administration of a test
(Hopf, Ducksworth). This interpretation must be treated with
caution as APHIS has not published information on what the classifications
would mean for U.S.–Canadian border requirements.
APHIS had a period in which it received comments on the Regionalization
Proposal, and is currently in the process of addressing those
that it chooses to. Information on the adoption process for the
Regionalization Proposal has not been made available to the authors,
and it appears that Congressional approval is not needed. Adoption
of the Regionalization Proposal would clearly make it difficult
to implement the Northwest Pilot Project due to differences in
the assessment of the health of Canada's livestock.
Economic Impact of the Pilot Project for Montana Stockgrowers
Canadian Packing Plant Expansion
Since 1994, U.S. and Canadian cattle producers have been conjecturing
about the market potentials of Iowa Beef Processors (IBP) and
Cargill Foods expanding their beef packing operations in southern
Alberta. IBP, Inc. of Dakota City, Nebraska, acquired the Alberta
beef packer Lakeside Farm Industries, Ltd. of Brooks, Alberta,
in October of 1994. The Lakeside plant currently maintains a
kill capacity of about 2,400 head of cattle per day, and plans
are to increase capacity to about 3,500 head per day by 1997–98
through plant renovations and double operation shifts (Dumford,
Oct 1996). There is some speculation that capacity (under further
expansion) could expand to near 4,000 head per day.
Concurrently, Cargill Foods (a division of Cargill, Inc.)
of High River, Alberta had plans to expand its beef packing facility
to a full second shift, accommodating a kill capacity of 3,500
head per day. This expansion is now in operation (October 1996)
and had increased from a 1994 capacity of about 2,000 head per
day (Dumford, Oct 1996). Consequently, both packers' expansion
plans could increase their packing capacity in southern Alberta
from 1.37 million head to possibly 1.79–1.92 million head
by 1997–98. These figures, however, ignore potential increases
in processing capacities of other smaller packers in Alberta.1
Overall, Canadian packing plant expansions have several market
implications for both U.S. and Canadian cattle producers. One
obvious consequence would be local economy impacts via the regional
income and employment multiplier effects of packing plant (carcass
and fabrication) investment and Alberta feedlot expansion. Other
factors deemed important include Canadian marketing of additional
boxed beef products to the United States and international markets
(Asia–Pacific Rim), changes in the derived demands for Canadian
and U.S. feeder and slaughter cattle, and potential changes in
transfer costs as U.S. live cattle flows respond to market demands
in southern Alberta.
The purpose of this section is to provide a statistical analysis
of the impacts of expected growth in southern Alberta beef packing
capacity on the demand prices of Montana feeder cattle. Doing
so recognizes a strong price transmission relationship between
the Billings, Montana, feeder cattle market and the major feeder
cattle market in Oklahoma City, Oklahoma; thus, any price change
in this national terminal market yields a price response in the
Montana cash market.2 Montana's role in satisfying
expanding packing plant demand relates to its surplus cow-calf
production and geographical proximity. Other benefits besides
potential price changes include revenue changes from possible
reductions in transportation costs of feeder cattle moving northward.
Model and Assumptions
The model used to evaluate the effects of Alberta demand for
Montana feeder cattle is based on a reduced form system of U.S.
wholesale beef, slaughter, and feeder cattle prices (Marsh, 1988).
The reduced forms are solved from conceptual domestic supply
and demand equations (specific to each sector) along with net
export demand functions for boxed beef and net import demand
functions for live cattle. Net export beef demand is given as
foreign demand primarily for U.S. choice and prime grade beef
less U.S. imports of the equivalent grade of select and choice
beef from Canada. Imports of lower quality (processing) beef
are primarily from Australia and New Zealand and are measured
as a separate variable in the category of nonfed beef production.
Net import demand consists of U.S. imports of live cattle from
Canada and Mexico less U.S. exports of live cattle to both countries.
The bulk of the live cattle trade consists of stocker/feeders
and slaughter cattle with relatively smaller trade in breeding
stock. Market clearing conditions are assumed in the model, which
provides for a unique solution of prices; that is, prices are
specified as the dependent variables and are stochastic functions
of domestic supply and demand shifters as well as net export
and net import demands for boxed beef and live cattle, respectively.3Policy
variables (i.e., tariffs, quotas, exchange rates) are not explicitly
measured; they are based on only a priori knowledge that policy
shocks would change the direction of the net export/import relations
and impact cattle prices in the domestic market.
Empirical Equation
Quarterly data from 1979 to 1994 were used in the model, with
all price and income variables deflated by the Consumer Price
Index (1982–84=100). Parametric restrictions were not imposed
on the reduced form as theoretical interrelationships (i.e.,
symmetry and homogeneity) were data determined within the incomplete
demand system. Abstracting only the feeder cattle segment of
the model, the feeder price equation is presented in general
form as:4
Pf = F (Q, I, B, C, T,
U ) (6.1)
where Pf is the price of feeder steers; Q is a vector of the
relevant domestic quantity variables in the system (i.e., boxed
beef production, fed and nonfed cattle slaughter, feeder cattle
inventories); I represents consumer disposable income; B is farm
by-product values (joint products of the slaughter sector); C
represents feed grain and marketing costs (derived demand shifters);
T includes the net export and import trade variables discussed
above; and U is a disturbance term with zero mean and constant
variance. The model was estimated as a partial adjustment process
with autoregressive errors; the distributed lags allowed calculation
of dynamic multipliers to estimate expected price impacts from
packing plant growth. Nonlinear least squares was used to estimate
the model in order to obtain consistent and asymptotically efficient
parameter estimates (Burt, Townsend, and LaFrance, 1986).
Growth Assumptions and Scenarios
Table 6.1 presents three
scenarios in evaluating the potential price impacts of capacity
expansion. The scenarios are developed from a 1995 baseline of
Alberta live cattle exports to the United States (576,000 head),
actual Alberta cattle slaughter (1.54 million head), number of
Alberta cattle available for slaughter (2.12 million head), and
packing plant capacity of IBP, Cargill, and three other packers
(1.73 million head). The number of Alberta cattle exports (576,000
head) is based on 48 percent of the 1.2 million head of total
1995 Canadian live cattle exported to the United States (USDA,
1996; McKinnon, 1991). The number of Alberta cattle slaughtered
plus the quantity exported yields the 2.12 million head available
for slaughter. The 1995 packing plant capacity of 1.73 million
head is the 1.37 million head capacity of IBP and Cargill plus
0.36 million head capacity of three smaller packers in Alberta
(Dumford, Oct 1996).
The feeder price impacts are linked to estimated changes in
cattle and beef flows and market demands. They include the number
of Canadian live cattle entering the United States; quantities
of additional Canadian boxed beef sold in the Asia-Pacific Rim,
in the Canadian domestic market, and exported to the U.S. market;
and additional demands for Montana feeder cattle. Estimates of
changes in transfer costs are also provided as there could be
a redistribution of Montana feeder cattle away from major domestic
grow out and finishing points to southern Alberta. All impacts
are evaluated on a longer term basis (i.e., through the 1997–98
period) to allow the major packers to be operating within their
capacity expansions.
The three scenarios are as follows. Scenario 1 assumes that
the expected increase in total capacities of IBP and Cargill
is 418,200 head. Cargill moves from 2,000 head per day to 3,500
head per day, 5 days per week for 51 weeks (382,500 head increase).
IBP moves from 2,400 head per day, 7 days per week for 51 weeks
to 3,500 head per day, 5 days per week for 51 weeks (35,700 head
increase). The 576,000 head exported to the United States less
the 418,200 head capacity increase still leaves 157,800 head
of Canadian live cattle entering the United States This scenario
is considered for those who understand that the only adjustment
will be that the new capacity requirements are merely satisfied
from existing Canadian live cattle exports.
Scenario 2 says capacity expansion utilizes all 576,000 head
exported plus an additional 30,000 head demand for Montana feeders.
It was stated above that 1995 Alberta packing capacity was 1.73
million head and that 2.12 million head were available for slaughter.
Thus, 1.73 million head existing capacity plus 418,200 projected
increased capacity (total of 2.15 million head) less the 2.12
million head available for slaughter, equals the additional 30,000
head needed.
Scenario 3 would be the most optimistic alternative. Here,
we assume IBP increases capacity to 4,000 head per day and that
the Alberta cattle inventory is 5 percent smaller than in 1995
due to herd liquidation (currently taking place in both Canada
and the United States). This increases total packer capacity
to 2.28 million head, and subtracting 2.01 million head available
for slaughter (2.12 million head with a 5 percent inventory reduction)
gives a high demand of 270,000 head of cattle.
Each scenario has implications about the distribution of the
wholesale beef supply. That is, expanded Canadian beef packing
capacity yields additional boxed beef that can be marketed either
domestically, to the United States, or to the international market,
primarily the Asia-Pacific Rim. For expediency, the distribution
is assumed constant across all scenarios; that is,10 percent
is assumed marketed within Canada, 25 percent is exported to
the United States, and the remainder (65 percent) is exported
to the Asia-Pacific Rim markets. Although somewhat presumptive,
it is also maintained that Alberta demand for additional cattle
is met by Montana feeder cattle and not by feeder or slaughter
cattle of other regions.
Estimated Price Effects
Table 6.2 presents the estimated
price effects on Montana feeder cattle from Alberta beef packer
expansion. The price effects are for Billings 600 pound feeder
steers (medium #1) as derived from the general impact on the
Oklahoma City terminal market. Price impacts correspond to the
three scenarios discussed in Table 6.1 and are given in both
percentage and dollar per cwt terms, the latter utilizing a $65
cwt base price.
Overall, the results reveal minimal effects on Montana cattle
prices; nevertheless the price directions from capacity expansion
are positive. Marginal price increases in this analysis reflect
reductions in Canadian live cattle exports to the United States
and increases in demand for Montana feeder cattle, which tend
to offset Canadian boxed beef exported to the United States and
Canadian beef competing with U.S. beef in the growing Pacific
Rim trade. The intensity of the Pacific Rim competition is uncertain
since Canada may market a product that satisfies a growing lean
beef demand while the United States continues to provide a choice-to-prime
grade demand. The United States experienced an annual beef export
growth of about 6 percent to Japan from 1992 to 1995; thus, growth
is assumed to slow to 3 percent for Scenario 1 and to 2 percent
for Scenarios 2 and 3.
Proceeding from Scenario 1 to Scenario 3, it is clear the
price effects become relatively greater as Alberta cattle exports
(to the United States) are absorbed by additional packing capacity
and the demand for Montana feeder cattle grows. For example,
Scenarios 1, 2, and 3 show net price gains of $0.13 cwt, $0.24
cwt, and $0.71 cwt, respectively, holding all other factors constant
in the market. The $0.71 cwt gain of Scenario 3 would be our
most optimistic estimate (under current market assumptions) since
IBP slaughter capacity increases to 4,000 head per day and the
Alberta cattle inventory decreases by 5 percent from its 1995
level.
Translating the price changes into revenue effects may be
useful. This can be done by assuming the 1994 1.05 million head
of Montana calves marketed (accounting for replacements, death
loss, and retained ownership) at an average weaning weight of
575 pounds. Gross revenue increases for the Montana cow-calf
sector would be 784.9 thousand dollars under Scenario 1, 1.45
million dollars under Scenario 2, and 4.29 million dollars under
Scenario 3. For both the estimated price and revenue effects,
however, the marginal increases could be negated if additional
Mexican feeder cattle entered the United States, particularly
since 1996 imports are significantly less than their 1995 levels.
Transfer Cost Savings
Presently, feeder cattle from Montana are sold to feedlots
of varying distances from Montana. Some major destinations are
illustrated in Figure 6.6. If Montana feeder cattle are sold
to packing plants in Alberta, there could be cost savings due
to reduced transportation costs. Savings have been estimated
for Scenarios 2 and 3, which have 30,000 and 270,000 head of
cattle moving to Alberta, respectively. The savings in transportation
was estimated as the difference between four more distant destinations
and High River, weighted by their importance as a destination
for Montana feeder cattle, and by the percentage of Montana cattle
sold to Alberta.5 Transportation cost savings were
estimated as $65,356 for Scenario 2 and $501,077 for Scenario
3. These savings would occur without the Northwest Pilot Project
given that those flows occur.
FIGURE 6.6 DESTINATIONS OF MONTANA FEEDER CATTLE
(Destinations as highway mileage with the percentage of Montana
cattle for 1995)
 |
With the pilot project, savings would also occur due to the
elimination of tests and certification requirements at the border.
For Scenario 2 this would result in additional savings of $795,000
and for Scenario 3 savings would be $7,155,000.
Total savings from the implementation of the Pilot Project
and reduced transportation costs would be $860,365 for Scenario
2 and $7,656,077 for Scenario 3. These savings would be shared
by cow calf producers and cattle buyers, depending on their respective
supply and demand elasticities. These elasticities have not been
estimated as a part of this model; thus, it is not possible to
calculate the division of these marketing cost savings.
Conclusions
Impact of Increased Demand for Feeder Cattle
Increased demand for feeder cattle in Alberta from packer
capacity expansion will have a small, but positive, impact on
the price of feeder cattle in Montana. Given the price estimates,
this could increase cow-calf revenues by 1.5 to 4.3 million dollars,
roughly about 1 percent of total cow-calf marketing income. While
the transportation cost savings are small, more substantial savings
would occur due to the removal of cost of the health tests and
certification under the Northwest Pilot Project. Under the assumptions
of Scenarios 2 and 3, the total savings would be between $795,000
and $7,155,000; however, we have not estimated the portion of
that savings that would accrue to producers.
Modeling Challenges
The reduced form price model used in this study was able to
estimate the price impact of changes in net trade flows of slaughter
cattle from Canada and Montana feeder cattle to Canada. This
model was able to estimate, as well, the impact on feeder cattle
price of increased flows of Canadian boxed beef into the U.S.
domestic and third country markets. However, the model was not
able to explicitly represent derived demand for feeder cattle
in Alberta, or the impact of a decrease in the transfer costs
due to the Northwest Pilot Project on that demand. Sumner has
discussed alternatives approaches to incorporating these costs
into empirical trade models. However, as future expansions in
packing capacity are uncertain there may be little information
to be gained from this extension. The seasonality in supply of
cattle and the differences in grading systems are important features
of these cross border transactions that are not easily incorporated
into a model.
Future Research
The implementation of the Regionalization Proposal could have
much larger effects on the U.S. cattle and beef market than the
Northwest Pilot Project. If implemented, an analysis of the proposal
would be needed to understand how the health classifications
would affect the cost and availability of imports of cattle from
both Mexico and Canada, and the model would need to explicitly
include those factors. As sanitary regulations become one of
the remaining border impediments to trade, it is increasingly
important to understand their impact.
Document Prepared by:
Leigh H. Stribling, lstribli@acesag.auburn.edu
Alabama Agricultural Experiment Station
Auburn University |
