Analyzing the Market for Imported Cheese in Mexico

Abstract

Rapid growth of U.S. dairy exports to Mexico began even before the 1994 North American Free Trade Agreement (NAFTA) and has been fueled by rapid population increases coupled with an expanding Mexican economy. This study uses a nonlinear approximate almost ideal demand system (NLAIDS) to estimate own and cross-price elasticities in the Mexican cheese import market to better understand market behavior and to assess the comparative position of the UnitedStates relative to other cheese market participants. Results of this study imply that attributes of cheese play a strong role in the composition of Mexican cheese import market.

Keywords:

• Mexico
• cheese
• imports
• demand system
• NLAIDS model

Notes

¹This schedule is valid only for the United States under NAFTA guidelines since Canada's dairy sector is excluded.