The Import Demand for Corn in Changing Macroeconomic Circumstances

ABSTRACT

This article examines the import behavior of major importers of corn over the period of 1996 to 2016. The article uses an upper-stage import demand equation for corn to estimate countries’ elasticities of import demand with respect to income/GNP, the import price, exchange rate, domestic corn production, and animal inventories. The article also examines whether countries’ corn import demand is sensitive to changes in income and the exchange rate during macroeconomic downturns, specifically when both nominal GNP falls and the currency depreciates. The results show greater import demand responsiveness in periods of macroeconomic stability, as opposed to downturns.

KEYWORDS:

• Agricultural trade
• import demand
• corn
• economic crises
• exchange rates

Data availability of statement

All data prepared for use in this article are available on request from the authors.

Disclosure statement

The findings and conclusions in this article are those of the authors and should not be construed to represent any official USDA or U.S. Government determination or policy. The research in this article was supported by the U.S. Department of Agriculture, Economic Research Service. The Economic Research Service is a fully funded agency of the U.S. Government, such that the authors face no conflicts of interest in preparing the article.

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/08853908.2022.2096730.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

¹ Given our definition of economic crisis, a country could suffer a major decline in GNP and not be described as in crisis, if its currency did not depreciate. Our definition of economic crisis does not necessarily capture the severity of a country’s economic downturn, but rather the simultaneity of falling GNP and depreciating currency.

² The exception is China which did not experience any time when both its GNP and currency value fell, but is too important to leave out of our country sample.

³ Lower stage elasticities (representing import by source of origin) are not reported in this article, but can be provided on request. Joint estimation of both stages (allowing for endogeneity of expenditures in the lower stage) adds information to the system of equations which can enhance the accuracy and efficiency of the estimated coefficients of the upper-stage model.

⁴ The Appendix is available online at www.tandfonline.com/uitj.

⁵ https://data.worldbank.org.

⁶ https://www.stlouisfed.org.

⁷ https://www.fas.usda.gov/data.

⁸ We tested all the country models for autocorrelation and, of the nine countries in our analysis, found it only for Korea. We corrected for that autocorrelation, such that all our estimates and T statistics for Korea are from the corrected model.