msu


	Issue 56 Prairie Grains


	Prairie Grains is the official publication of the Minnesota Association of Wheat Growers, North Dakota Grain Growers Association, Montana Grain Growers Association and South Dakota Wheat, Inc.




	MSU Analysis Documents Affect of Canadian wheat on U.S. Price Kevin McNew and Vincent Smith, economists at Montana State University – Bozeman, analyzed 57 spring wheat markets in the Northern Plains and the Pacific Northwest. Their analysis showed price reductions due to Canadian wheat imports in 48 of these markets, with the average reduction being 5.3 cents a bushel. In the smaller U.S. durum wheat market, the impacts were greater. Of 23 markets studied, 22 had price impacts that averaged 19 cents a bushel decline in prices. McNew says the analysis included wheat prices paid between September 1997 and December 2002. The MSU study was done at the request of the North Dakota Wheat Commission, which successfully brought the U.S. wheat industry’s case against Canadian wheat imports to the U.S. International Trade Commission. The USITC ruled in October that imports of Canadian hard red spring wheat have materially injured American wheat farmers. The ITC ruling means any grain merchandising company or mill in the U.S. that decides to import Canadian hard red spring wheat must pay duties of 14.15%, equal to about 50 cents/bu. The analysis by McNew and Smith indicated that the price impacts are generally higher in the eastern Northern Great Plains states of the U.S., compared to the impacts in Washington, Idaho, and Wyoming. In those markets, prices decreased, but by less, probably because more Canadian wheat is sold into North Dakota and Minnesota than in the Western states, says McNew. The decrease in U.S. prices due to imports of Canadian spring wheat ranged from a low of 3.7 cents a bushel in southwest Montana to a high of 7.7 cents a bushel in Morgan, Minn. for each additional million bushels of imports. The average across the 48 markets was 5.3 cents a bushel. The decrease in U.S. durum prices due to imports of Canadian durum averaged 19 cents a bushel for each additional million bushels of imports. The study also suggested that the strengthening Canadian dollar compared to U.S. dollar reduced some of the price impacts in the United States.