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 Front Cover
 Abstract
 Table of Contents
 List of Tables
 List of Figures
 Main
 Reference














Group Title: Economic information report - University of Florida, Institute of Food and Agricultural Sciences ; 125
Title: Economic considerations of United States canned beef imports
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026478/00001
 Material Information
Title: Economic considerations of United States canned beef imports
Series Title: Economic information report
Physical Description: iii, 25 p. : ill. ; 28 cm.
Language: English
Creator: Simpson, James R
University of Florida -- Food and Resource Economics Dept
Publisher: Food and Resource Economics Dept., Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Publication Date: [1980]
 Subjects
Subject: Canned beef -- Economic aspects -- United States   ( lcsh )
Canned beef -- Economic aspects   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 25.
Statement of Responsibility: James R. Simpson.
General Note: Cover title.
General Note: "January 1980."
 Record Information
Bibliographic ID: UF00026478
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000310396
oclc - 07464518
notis - ABT7083
lccn - 80622178

Table of Contents
    Front Cover
        Front Cover
    Abstract
        Abstract
    Table of Contents
        Page i
    List of Tables
        Page ii
    List of Figures
        Page iii
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
    Reference
        Page 25
Full Text













ABSTRACT


This report contains a summary of world trade in canned beef which
indicates that Europe accounts for about 70 percent of world imports.
The United States share of about 22 to 23 percent of world imports is
shown to have been erratic. The post World War II low was 29 thousand
metric tons in 1975 versus 73 thousand tons in 1950. Also, consumption
of canned beef has declined slightly since World War II, to about 0.50
kgs. per capital in the 1970 s. A statistical analysis with a quantity
dependent equation for imports shows canner cow price to be the most sig-
nificant independent variable. The R2 for an equation with just price of
canner cows and a trend variable is 0.69. A price elasticity of 0.73
was calculated. The United States countercyclical meat import bill
which will take effect in 1980 should have the effect of dampening canned
beef imports early in the next cycle (1980-82) and increasing them later
in the cycle.

An economic impact statement was made by using output multipliers
derived from an earlier survey of meat packing plants in Argentina, Brazil,
Paraguay and Uruguay. It was concluded that canned beef exports provide
considerably more income and economic activity for each dollar's worth of
final demand than do exports of live cattle, bone-in beef or manufacturing
beef. Consequently, if the United States is really interested in assisting
the developing countries, then maintaining canned beef imports is one good
"trade-not-aid" method. Finally, it was shown that because imported canned
beef is such a small percentage of domestic beef consumption, about four-
tenths of one percent, exclusion of canned beef in the countercyclical meat
import bill will have a negligible effect on U.S. producer prices.

Key words: beef trade, canned beef trade, canned beef, beef imports,
countercyclical and meat import law.














TABLE OF CONTENTS


Page


LIST OF TABLES . . . .


LIST OF FIGURES . . .


WORLD TRADE IN CANNED BEEF . .


UNITED STATES . . .


ECONOMIC IMPACT ON DEVELOPING COUNTRIES.


SUMMARY . . . .


REFERENCES . . . .






LIST OF TABLES


Table Page

1 World exports of canned beef by selected countries,
1970-1976 . . . . . 3

2 Exports of canned beef as a percentage of total world
exports by selected regions and countries, 1962, 1970
and 1976. . ... . . . 4

3 World imports of canned beef by selected countries,
1970-1976 . . . . ... . 5

4 Imports of canned beef as a percentage of total world
imports by selected regions and countries, 1962, 1970
and 1976. . . . . ... . 6

5 United States imports of canned beef, domestic production
of canned beef products, and per capital consumption of
imported and domestically produced canned beef products,
1947-1976 . . . . ... . 9

6 United States imports of canned beef by country of origin,
1970-1976 . . .. . . . . 10

7 United States exports of canned meat by country of desti-
nation, 1970-1976 . . . . ... .. 11

8 Price of canner cows (Omaha), consumer price index (1977=100)
and inflated price of canner cows, 1951-1976. ...... .. 16

9 Output multipliers and indices of them for export of live
cows, bone-in beef quarters, frozen boneless manufacturing
beef, cooked/frozen beef and canned beef from four different
disaggregated input-output studies. . . ... 22






LIST OF FIGURES


Figure Page

1 Imports of canned beef by selected countries, 1962-1976. 7

2 Relation between United States production of canned beef
products and imports, 1947-1976. . . . ... 12

3 Actual price of canner cows at Omaha plotted against
United States imports of canned beef, 1951-1976. . ... 15

4 Inflated price (1977=100) of canner cows at Omaha plotted
against United States imports of canned beef, 1951-1976. .. 17

5 Per.capita consumption of imported and domestically pro-
duced canned beef products, 1947-1976. . . ... 19











ECONOMIC CONSIDERATIONS OF UNITED STATES

CANNED BEEF IMPORTS*

by

James R. Simpson



United States canned beef imports have averaged about 46 to 47 thou-

sand metric tons annually since 1969, a figure which represents about 7

to 8 percent of total beef imports for that period. More than 85 percent

of the above imports have been cooked beef, primarily corned beef.

Canned beef imports were excluded from Public Law 88-482, usually

the Meat Import Act of 1964, but a number of proposed bills during 1978

and 1979 sought to include canned beef under a quota system. The bill

(HR2727) entitled, "Meat Import Act of 1979" passed by Congress and signed

into law the end of 1979, does not include canned beef as a quota item.

There was abundant testimony at congressional hearings about the po-

litical rationale for including or excluding canned beef from any quota

system [1]. But there is no publication which brings together data on

the topic, as well as performing an economic analysis on the impact of

excluding the item from a quota. Consequently, the purposes of this paper



*Thanks are due David Mulkey, Scott Shonkwiler, Kary Mathis and
W.W. McPherson for comments on earlier drafts. Responsibility for errors
is, of course, the author's.

James R. Simpson is Associate Professor, Food and Resource Economics
Department, University of Florida.


1Included in the figures are canned corned beef, pickled beef and
veal, and beef and other sausages in airtight containers as well as U.S.
tariff items 107.20, 107.25, 107.40, 107.45, 107.48 and 107.52.







are: (a) to place United States canned beef imports within the context

of world canned beef trade, (b) to explain the position of canned beef

as part of U.S. beef consumption, (c) to develop statistical relationships

between beef prices and canned beef imports and (d) to describe the eco-

nomic impact in developing countries from canned versus other types of

beef exports.


WORLD TRADE IN CANNED BEEF

World canned beef exports by country for 1970 to 1976 are presented

in Table 1 and summarized in Table 2. A complete statistical series is

found in [6]. Argentina has traditionally been the leading exporter, but

this position is now being challenged by Brazil. About 56 percent of

world exports are from the Western Hemisphere, 30 percent from Europe and

only nine percent originate in Oceania. Africa plays a minor role. The

United States accounts for about two percent of world exports.

Imports of canned beef by country for 1970-1976 are presented in

Table 3 and summarized in Table 4. Europe accounts for about 70 percent

of world imports followed by the Western Hemisphere with 28 percent. The

other two percent are about equally divided between Asia and the Middle

East. The United Kingdom is the leading importing country, accounting

for about 32 percent of the total. The United States and West Germany

each share about 22 to 23 percent (Figure 1). The United States'share

has fluctuated over time, but was about the same in 1976 as in 1962.


UNITED STATES

Canned beef imports by the United States have been erratic, especially

when the whole period since World War II is considered. In the early 1950 s






(3)

World exports of canned beef by selected countries, 1970-1976./


d Country
1970 1971 1972 1973 1974 1975 1976
---------------------------------------- Metric tons------------------------------------------


car
frica
a


eania
ia

land
dC/


b/
& Luxemburg


(West)


hands

C/
a1

riand S/
Kingdom../
avia


Hemisphere
ina.

ia
r
ala C/
bc/

aguab/
uay b/
d States
uela S/
1


2142.5
3130.0
(3008.0)
765.0
3798.0
S12843.5


14617.0
(19.0)
2822.9
12.3
17471.2


454.6
1607.1
3825.2
10639.0
1795.0
3591.7
5666.0
2491.0
(.0)
11410.5
.2
(27.1)
443.5
(2318.2)
6184.9
50454.0


28.7
28.7


69926.0
(13376.6)
17.4
(0.0)
131.2
6.3
(15.8)
11106.0
2595.0
3.4
97177.7


177975.1


3807.1
3492.0
3534.1
2551.0
3300.0
16684.2


18065.0
1.1
2502.2
8.7
20577.0


780.0
1727.9
3592.8
14591.0
1548.0
4323.9
7391.0
2407.0
139.0
11712.9
.3
(58.1)
334.5
(3575.5)
2072.4
54254.3


11.7
11.7


39438.0
33752.0
16.2
(.4)
46.9
(.0)
(.0)
9651.0
3283.7
3.9
86192.1

177719.3


4664.6
4126.0
3780.7
4748.0
(2216.3)
19535.6


23863.0
3.0
2119.6
9.7
25995.3


198.9
1470.4
2072.6
14281.0
1744.0
3558.0
8660.0
1954.0
118.0
11761.8
.7
(47.8)
312.3
(5766.7)
2561.8
54508.0


63.0
63.0


47807.0
35402.0
268.3
9.3
39.7
(0)
(2.3)
9399.0
2597.4
95.7
95620.7

195722.6


3193.7
2004.0
3982.5
(4317.7)
(2743.0)
16240.9


19738.0
.8
2056.0
8.5
21803.3


301.4
2244.2
1763.6
17107.0
1589.0
(6091.4)
5340.0
1750.0
132.0
12821.2
1.4
(39.0)
365.9
(1007.9)
2402.8
52956.8


7.5
7.5


30392.0
35482.0
87.0
16.2
18.3
1.2
(7.0)
11222.0
3696.1
74.1
80995.9

172004.4


2033.2
2598.0
4404.6
(4557.3)
(1138.9)
14732.0


18634.0
.2
1491.4
9.4
20135.0


308.6
3501.1
2232.7
25606.0
2404.0
(4861.3)
4821.0
1837.0
113.0
15792.9
.4
(39.0)
412.8
3422.9
2921.4
68274.1


34658.0
27726.0
(156.0)
25.0
31.3
3.0
195.4
7852.0
4317.8
378.2
75342.7

178483.8


1270.0
3646.0
2656.1
(1550.4)
(182.0)
9304.5


11783.0
1.0
1330.6
6.8
13121.4


30
38
208
19
(56
41
22
3
111


3
24
34
596


553.7
5776.0
(1569.8)
(3925.5)
(182.0)
12007.0


17629.0
(.2)
1995.6
4.5
19629.3


91.0 120.5
69.2 3666.6
183.3 8586.5
.19.0 12382.0
31.0 3669.0
.17.0) (6348.4)
56.0 6717.0
83.0 2121.0
310.0 100.0
26.5 10150.9
.1 .8
79.0 6.0
13.8 193.2
33.3 3026.7
.90.5 6594.0
.02.7 63682.6


(0) (0)


39749.0
35623.0
(316.2)
.5
46.2
(0)
177.6
14665.0
2714.5
218.4
93510.4


54603.0
52525.0
(180.6)
(0.0)
98.3
(0)
258.8
8273.0
3397.4
(3.6)
119339.7


175539.0 214658.6


mbers in parentheses indicate estimates.


Quantities estimated from reports of importing countries.


nned beef is included with canned meat.

nned beef estimated as a percentage of canned meat.
)urce: [6].






(4)

Table 2. Exports of canned beef as a percentage of total world exports
by selected regions and countries, 1962, 1970 and 1976.

Percent of total world canned
beef exports, by year
Region or country 1962 1970 1976

-------------Percent------------
Region
Africa 09 07 05
Asia & Oceania 08 10 09
Europe 27 28 30
Western Hemisphere 56 55 56
Total 100 100 100

Selected countries
Argentina 34 39 25
Australia & New Zealand 08 10 09
Brazil 06 08 24
France 05 06 06
Paraguay 08 06 04
United States 01 01 02
Uruguay 07 01 01
Yugoslavia 02 03 03
Others 29 26 26
Total 100 100 100


Source: Derived from Table 1 and [6].







(5)

World imports of canned beef by selected countries, 1970-1976


and Country
1970 1971 1972 1973 1974 1975 1976
------------------------------------------Metric tons ---------------------------------------


>/

frica

b7


:eania
lia
ng

a c/
ines
re c/
id 7



b/
S& Luxemburg
Islands/


S(West)
b/


and
b/
1


land c/
Kingdom
via


st




hemisphere
s



ador b/
la b/

uab/

States
1iac/


2075.4
2.0
(37.2)
7.0
231.0
(153.0)
991.1
3496.7


(40.5)
206.2
588.0
121.5
3671.7
270.0

4897.9


728.8
4266.5
4540.8
34.0
3985.0
22320.0
26.5
5828.0
(726.1)
5930.0
(4.2)
730.0
5.7
232.5
553.0
1582.5
56587.1
20.2
108100.9


.2

2360.4
2360.6


606.5
(.1)
6030.6
(163.6)
(50.7)
35.8
2075.4
(4.5)
33.4
54092.9
18.5
63112.0

181968.1


1290.9
58.0
(72.4)
16.0
185.0
1243.8
488.6
3354.7


(156.0)
140.4
219.0
56.8
3878.4
316.0
.4
4767.0


1389.9
4707.1
5023.5
62.0
3839.0
19361.0
24.9
5396.0
(669.4)
3177.0
22.0
4982.0
53.7
127.0
410.0
1757.6
54054.1
70.3
105126.5


.3
72.3
3210.4
3283.0


380.3
(26.7)
4382.1

32.8
43.4
2.2
(32.8)
12.9
41342.0
23.2
46278.4

162809.6


Source [6].
Numbers in parentheses


indicate estimates.


Quantities estimated from reports of importing countries.


Canned beef is included with canned meat.

Canned beef estimated as a percentage of canned meat.


769.1
88.0
98.0
29.0
372.0
1704.5
307.9
3368.5


167.0
159.2
490.0
69.1
1925.7
329.0
191.7
3331.7


632.7
5033.7
5621.5
23.7
4298.0
26314.0
76.7
7170.0
(480.0)
4591.0
14.0
3248.0
88.1
301.1
435.0
2257.4
61265.6
128.6
121979.1



83.3
2872.3
2955.6


465.7
243.3
6030.0
46.1
59.5
28.6
(3120.0)
(4.5)
47.2
45414.1
35.4
55494.4

187129.3


213.5
127.0
45.2
31.0
360.0
888.0
283.9
1948.6


209.0
198.5
1586.0
55.1
20.4
195.0
4.4
2268.4


533.4
5298.2
4844.7
19.2
3817.0
33297.0

.6965.0
(324.6)
4578.0
15.0
1999.0
122.7
637.5
1006.0
2292.5
61106.1
177.8
127033.7


4.6
89.8
3832.1
3926.5


371.0
83.6
4545.6
61.5
48.2
61.9
56.7
(23.8)
66.1
42334.5
(53.6)
47706.5

182883.7


1143.5
53.0
34.6
13.0
410.0
962.2
590.8
3207.1


555.0
440.0
1594.0
83.1
73.5
305.0
131.0
3181.6


523.9
6776.4
4762.0
20.2
4316.0
32985.0

5395.0
(599.5)
4099.0
7.0
(321.3)
13.5
949.6
740.0
1866.5
48530.0
46.3
111951.2


51.6
60.0
(1033.7)
1145.3


422.6
(.2)
4203.1
2.4
66.0
82.2
2672.2
130.6
78.7
42488.6
58.9
50205.5

169690.7


163869.0 231262.7


266.2
129.0
55.0
40.0
174.0
958.7
0.0
1622.9


520.0-
165.2
1446.0
61.5
361.3
303.0
10.3
2867.3


447.8
5869.5
4397.8
19.1
2904.0
36160.0

3942.0
1363.9
6432.0
10.0

24.0
959.5
844.0
1584.4
54587.7
6.6
119552.3


175.3
55.0
(814.4)
1044.7


712.5
(1.2)
4649.3

141.3
67.4
3996.6
28.2
(84.1)
28860.6
240.6
38781.8


(56.3)
2.0
53.4
67.0
310.0
34.6
0.0
523.3


286.0
139.2
1901.0
38.4
109.6
707.0
12.5
3193.7


444.6
7894.3
4762.9
182.7
2172.0
53878.0

6307.0
306.0
8104.0
13.0

72.8
.2
378.0
1806.5
74282.7

160604.7


323.4
6.0
(1350.5)
1679.9


1089.3
(124.4)
6390.8

176.9
30.9
3831.7
53.6

53563.5

65261.1







(6)


Table 4 Imports of canned beef as a percentage of total world imports
by selected regions and countries, 1962, 1970 and 1976.



Year

Region or country 1962 1970 1976

Region ----------Percent-------------

Africa 03 02 00
Asia & Oceania 08 03 01
Europe 62 59 70
Middle East 01 01 01
Western Hemisphere 26 35 28
Total 100 100 100


Selected countries

Germany (West) 03 12 23
United Kingdom 48 31 32
United States 23 30 23
Other 26 27 22
Total 100 100 100


Source: Derived from Table 3 and [6].


















/
/

United Kingdom /

o "/

/- \ /


United States


West Gernany-. ..*'" '' ...


1976
(Year)


Figure 1 Imports of canned beef by selected countries, 1962-1976.


100






80


"3



0

rOE
-) Co
O o
0 i-


20-






0-

1962


53 64 65 66 67 68 69 70 71 72 73


-


OO OB """ I "DO
OQO
'"'B
QQOO~m@O ~ O'O









canned beef imports peaked at about 73,000 metric tons (probably due to

the Korean War) while, by the middle 1950 s, they had fallen to a post-war

low of slightly over 34,000 tons (Table 5). Since that time imports have

continued to be erratic. United States consumption of all beef products,

on the other hand, has grown steadily from a fairly constant 4 million

metric tons annually in the 1940 s to over 13 million tons by 1970. Im-

ported canned beef only accounted for about one-half of one percent of

total U.S. beef consumption in 1976.

The vast majority of U.S. canned beef imports for the period 1962-1976

have come from Argentina, with smaller quantities from Brazil and Paraguay

(Table 6). Only a very small amount originated in Australia and New

Zealand, although these countries are a major source of imported chilled

and frozen beef by the United States. Europe was also a very minor source

of canned beef imports. The United States exports almost no canned beef.

Beef is not broken out separately, but all canned meat exports only ac-

count for 3 to 4 thousand tons annually (Table 7).

Consumption of canned beef in the U.S. has declined from 0.70 or 0.80

kgs. per capital prior to the mid 1960 s, to 0.50 kgs. per capital in the

1970 s. About 0.20 kgs. per capital were domestically produced while about

the same quantity was imported. Domestic production for civilian use

(production for military use is not published by the U.S. government) shows

much greater fluctuation than imports (Figure 2).

One reason for the greater fluctuations in domestic production is

that most imports are mainly canned corned beef while domestic production

as shown here also includes tongue, corn beef hash, sliced dried beef,

chopped beef, canned hamburger and meat with gravy. There is almost no

canned corned beef produced in the United States. When United States im-

ports are added to domestic production there is a very slight downward






(9)


ble 5 United States imports of canned beef, domestic production of canned beef
products, and percapita consumption of imported and domestically produced
canned beef products, 1947-1976.
Per capital
Per capital Domestic consumption
consumption production of domestically
S of imported of canned produced
Imports canned beef beef products canned beef Total-
of canned (civilian and (for civilian products per capital
ar beef military) use) (civilian only) consumption
-Metric tons- -Kilos- -Metric tons- -Kilos- -kilos-

47 34,001 .24 N.A. N.A. N.A.
48 52,745 .36 N.A. N.A. N.A.
49 38,740 .26 N.A. N.A. N.A.
50 73,178 .49 N.A. N.A. N.A.
951 69,872 .46 52,748 .35 .81
952 54,562 .35 50,200 .33 .68
953 45,444 .29 96,201 .61 .90
954 38,701 .24 75,089 .47 .71
955 39,552 .24 63,143 .39 .63
956 33,018 .20 91,710 .55 .75
957 43,250 .25 61,339 .36 .61
958 51,500 .29 55,412 .32 .61
959 42,979 .24 57,167 .33 .57
960 34,746 .20 62,645 .35 .55
961 43,236 .24 101,984 .56 .80
962 38,003 .20 104,690 .57 .77
963 51,509 .27 93,747 .50 .77
964 37,743 .20 118,823 .63 .83
965 42,111 .22 71,708 .37 .59
966 42,487 .22 63,137 .33 .57
967 44,479 .23 64,103 .33 .53
968 53,561 .27 65,660 .33 .60
1969 53,306 .26 64,845 .33 .59
1970 54,070 .26 63,464 .31 .57
1971 41,327 .20 58,574 .28 .48
1972 45,390 .22 59,872 .29 .51
1973 42,331 .20 61,650 .29 .49
1974 42,489 .20 54,763 .26 .46
1975 28,861 .14 52,846 .25 .39
1976 53,563 .25 65,781 .31 .56


1Source: U.S. Foreign Agricultural Trade by Countries, Supplement to the Monthly
Foreign Agricultural Trade of the United States, USDA/ERS, various issues.

Source: Supplement to Livestock and Meat Statistics, USDA/ERS, various years.
Included are corn beef hash, sliced dried beef, chopped beef, canned
hamburger, roasted or corned beef, meat and gravy, and tongue.

Includes domestic production for civilian use and imports for both civilian and
military use.






Table 6. United States imports of canned beef by country of origin, 1970-1976.


Year
Region and Country
of origin 1970 1971 1972 1973 1974 1975 1976

Asia & Oceania ---------------------------Metric tons-----------------------------
Australia 752.2 304.6 -- 22.5 -- 69.3
Malaysia -- 25.1 -- --
New Zealand -- -- 23.3 -- 39.3 27.7

Europe
Denmark 22.6 -- 3.4 -- --
Germany (West) 3.6 2.8 -- --
Ireland -- 3.9 -- -- -- -- --
.Italy 124.9 64.3 130.1 122.6 46.5 41.1 114.2
Netherlands -- -- 17.2 -- -- -- -
Poland 12.7 4.2 -- -
Sweden 1.4 -- -- -- --
United Kingdom 2.0 66.6 6.6
Yugoslavia 225.6 -- -- --

Western Hemisphere
Argentina 37,797.8 20,345.0 26,421.5 21,145.7 29,191.1 I15000.4 28,299.7
Brazil 8,820.4 16,161.6 14,552.4 14,066.5 10,731.7 10,193.5 21,377.1
Canada 23.1 15.2 23.9 3.9 -- --
Colombia -- -- 40.2 -- --
Guyana -- 8.1 -- --
Nicaragua 15.8 -- -- -- -- -- --
Paraguay 5,721.5 4,281.8 4,222.2 6,937.4 2,444.4 3,528.6 3,568.6
Uruguay 555.6 57.1 -- 8.0 -- 36.3
West Indies 12.2 -- -- -- --

Other 1.5 1.7 -- 1.2 74.9 57.7 70.6


54,070.0 41,327.0 45,390.0 42,331.-0 42,489.0 28,861.0 53,563.0


Total








(11)




Table 7 United States exports of canned meat by country of destination,
-. _1970-1976 _


Pregfon and cnunltry
ol dest ina ton1

Africa
wq/pt
Liberia
Libya

Asia & Oceania
Australia
Hong Kong
Japan
Korea
New Zealand
Philippines
Singapore

Europe
Belgium
Canary Islands
Cypress
Denmark
France
Genrany
Greece
Italy
Malta
Netherlands
Poland
Spain
Sweden
Switzerland
United Kingdom
Yugoslavia

Middle East
Iran
Israel
Kuwait
Lebanon
Saudi Arabia

Western Hemisphere
rz il
Canada
El Salvador
61.1 t ,.,11" a
61,lylla
Mexico
N cara'ua
Pa in.ma
P4,ru
Venezuela
West Indies


Year

1910 1971 1972 1971 1974 1975 1976
---------------- etric tons------------------
67.5
n n 110 -


16.5
241.0
11.7

167.2
10.7





543.4
114.0
22.8


19.0
33.6
158.3
12.9
12.9

68.1





25.5


25.6
880.5

6.8

69.1
26.0
48.2
8.5

345.4


10.5
37.5
14.7

61.4
14.1





474.2
30.4
34.4


68.9

205.6


33.7


23.8
268.1

17.4
37.8
7.9


20.4

33.6

596.3
23.8
33.3


17.4



47.4
670.6


7.1
16.0 54.2


714.9



140.2

77.5


.334.9


953.1
5.0
9.8
22.7
119.7
23.7
55.0

53.6
274.7


110.7
19.7
240.9



11.5



25.4
33.6
80.8
914.1

100.4
12.3
52.3

63.8


47.5
92.2



6.1
37.5

27.0
46.6



700.5
7.1
11.0
5.2
123.6

79.6
7.8

745.4


32.5
231.7









123.9

52.9














60.A



806.9



161.5

53.6


331.7


26.3
56.0
7.8

164.1






188.9
35.6
21.4


32.9


21.7
86.3
112.7
90.8


618.7



123.7

32.2


219.9


191.2











68.5












440.6

56.0




713.1



191.4

116.2


481.0


747.0 416.0

2595.0 3283.7


320.4 319.7 703.4 791.5 1139.4

2597.4 3696.1 4317.8 2714.5 3397.4


Source: "Foroiln Trad4.," FT410, U.S. Dept. of Comrnerce, Bureau of the Census. Classification 0138030,
"MIeat and M at i'ilucts. In airtight containers."







120





100





80


U)
Ocr
Cp 60


0 U
a


4-o

40





20




0


I
I
I
I
I
I
1
I
I
I
I
I
I
I
II


I
I
I
I
\

!


1
I
I
I
I
I
I
I
I
I
I
I I Production
I

\


Imports


1947 49 51 53 55 57


67 69 71 73 75 1977
(Year)


Figure 2 Relation between United States nroductirn of rannpr h F nrnjrl nrl ;n__-


I
I Ij
SII

\ I
11






(13)


trend in total canned beef consumption.

United States imports of canned beef are influenced by domestic pro-

duction of cow beef, especially Canner grade (as this is the source of

domestic canned beef) price of beef (mainly cow prices) and consumption

of close substitutes. The market operates in the following manner: as

United States production of cow beef decreases, domestic production of

canned beef also decreases. Prices of cow beef and other grades of beef

then increase, as do imports of canned beef. Naturally, the consumption

of close substitutes also increases. It is not clear what products are

close substitutes, but some possibilities are hash, tamales, canned spa-

ghetti and luncheon meat. Hamburger and low value cuts of beef are also

likely substitutes.

Steele explored reasons for United States consumers purchasing im-

ported meat. His 1969 survey results show that consumers purchased im-

ported meat 15 times a year. He notes that the leading product was canned

ham, but concludes "there is a greater commitment to the purchase of im-

ported corned beef than there is for the purchase of the other imported

meat products considered in the study [8, p. 11].

Steele's study also indicates that the respondents, in general, had

a favorable attitude and image of imported foods. Nevertheless, with a

given change in income, other things being equal, he found a slight nega-

tive effect on the consumption of imported meat by both people with in-

ternational experience (whom he calls "internationalists") and "localites"

or those whose foreign contact was limited [8, p. 45]. Providing all

variables remain constant at their mean value, "internationalists", he

found, will consume more imported meat than "localites." Using a step-

wise regression technique, he established that "localites" purchased

more imported meat as their food expenditures increased.






(14)


The first logical step for explaining the United States market for

imported canned beef would be constructing a demand equation and deriving

attendant elasticities. But, there are no data readily available on whole-

sale price of canned beef in the United States, nor is there a retail price

series. If a demand equation were being developed, some variables which

would be considered are: population; prices of close substitutes such as

other canned foods with meat; hamburger; frankfurters or canned ham and

price indices for these variables. The only wholesale price series for

canned beef is published by the U.S. Bureau of Census, and these prices

are reported as the value in the exporting country after taxes imposed by

that country are added to the price but prior to shipping. However, the

value of exports is not a reasonable proxy for U.S. retail canned beef

prices, due to many variables such as exchange rates, costs of transporta-

tion, domestic price fluctuations and marketing margins which impact on

the final U.S. consumer price.

A supply equation would also be useful, but lack of data and the

interrelationships between canned and other types of beef exports preclude

development of it. Consequently, the statistical analysis is restricted

to showing the relation between U.S. beef prices and the quantity of canned

beef imports.

Various independent variables such as price of competing wholesale

level products were examined in a quantity dependent equation and a vari-

able found to be significant was price of canner cows at Omaha. Annual

prices, as well as imports of canned beef, are shown in Figure 3 plotted

against each other for the period 1951 through 1976. The same price series

has been inflated to a 1977 base (Table 8) and graphed (Figure 4). The

curve is upward sloping to the right, apparently indicating a supply curve.


















66 67
0- -
59
60 62 .. --


64 57
55 o
00 53
54


S69
S68

52


63
63


S30 35 40 45 50 55 60 65 70
Imports (1000 metric tons)

Figure 3 Actual price of canner cows at Omaha plotted against United States imports of canned beef, 1951-1976.







(16)


Table 8 Price of Canner cows (Omaha), consumer price index (1977=100)
and inflated price of Canner cows, 1951-1976


Consumer
price
Actual index Inflated (1977)
Year price per cwt. (1977=100) price per cwt.


1951
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76


----Dollars----
19.86
15.22
10.19
9.16
9.27
9.30
11.50
15.88
15.47
13.06
13.80
13.12
12.62
11.74
12.46
15.80
15.86
16.26
17.90
19.24
19.03
22.34
29.31
22.11
15.85
20.67


46.9
45.6
45.0
45.1
45.2
46.7
48.0
48.7
48.8
48.9
48.7
48.9
48.7
48.8
49.8
51.4
51.5
52.8
54.9
56.9
58.7
61.4
69.4
82.5
90.1
94.2


----Dollars----

42.35
33.38
22.64
20.31
20.51
19.91
23.96
32.61
31.70
26.71
28.34
26.83
25.91
24.06
25.02
30.74
30.80
30.80
32.60
33.81
32.42
36.38
42.23
26.80
17.59
21.94











*
73

*
72
716 67
66* 67


70
52
58--- 699

68


74 *
65 *


- I I


6


I
0 65
ImDorts (1000 metric


Figure 4 Inflated price (1977=100) of canner cows at Omaha plotted against
beef, 1951-1976.


United States imports of canned


50 -


40 -





30 -


201


10 -





0


56


55
54


I
70
tons)


--A






(18)


But, it is not clear whether a supply or a demand curve is being traced

out since imported as well as total per capital consumption of canned beef

appears to have declined over time (Figure 5).

Price in the model is not lagged and theoretically should not be,

since a supply of canned beef is readily available to importers at all

times. A trend variable is included in the model to adjust for any fac-

tors which change at a constant rate per unit of time. The economic model

is:


Qsm = f(Pc T)

where Qsm = Total annual imports

P = Price of Canner cows at Omaha inflated
by the wholesale price index, 1977=100
T = Trend

The statistical model is:


Qsm = a + bPc + b2T + e

where the price data are inflated to a 1977 base.

The equation developed for the 1951-1976 period is:


Qsm = 15 407 + 1 184P = 324T
(6.62)**(-2.21)*

The data in parentheses are the "t" values.

**Significant at the .99 level

*Significant at the .95 level

The price elasticity is 0.73 which means that, as price of Canner

cows changes by one percent, imports of canned beef will change in the

same direction by about three-fourths of one percent.







1.00


0.90 -


0.80 -


0.70 -


0.60 -


0.50 -



S- Domestic production
0.30 1


0.20 \/ N/W -- .
Imports \
0.10 -

0
I 1 -- 1-- 1 1 I i- I I I I I 1-- I I I I- I I I- 'I- I I --
1947 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 1976
(Year)

Figure 5. Per capital consumption of imported and domestically produced
canned beef products, 1947-1976.





(20)


Estimates are that beef prices (and one may also speculate Canner

cow prices) will remain relatively high until the mid 1980's as the

United States beef industry embarks on cycle number nine [7]. Judging

by past history, the early part of herd buildup (1979 to 81) would be

accompanied by relatively high imports of canned beef (50 to 55,000 tons)

which would then taper off to the 40 to 45,000 ton range as inventory

peaks are reached provided the earlier import bill (P.L. 88-482) remained

in effect. Given the relative inelasticity of the canned beef import

function, it appears that imports would only increase slightly after

that point. If, for example, there were a change in Canner cow prices

from $40 per cwt. (average price in late 1978) to $50 per cwt., imports

of canned beef would be expected to increase by about 13,100 tons. The

effect of the countercyclical bill should be increased imports of non-

processed beef (mainly deboned, chilled and frozen) in the early phase

of the cycle (say, through 1981 or 1982) and a reduction of imports after

that. Access to larger quantities of frozen and chilled beef by United

States processors would then be expected to dampen demand at wholesale

and retail for imported canned beef. The net result is that imports of

canned beef should not reach the levels projected in the early part of

the cycle (50 to 55,000 tons), but would be higher than those projected

(40 to 45,000 tons) later in the cycle.


ECONOMIC IMPACT ON DEVELOPING COUNTRIES

One of the major ways of determining the economic impact of a prac-

tice, or change in practices, is by using economic multipliers. These

economic estimators measure effects from additional economic activity as

well as direct impacts. For example, the export of meat generates more

activity in the exporter's economy than simply the value of the sale.




(21)


This is because part of the processor's earnings are spent on inputs such

as fuel or repair parts which generate employment for other workers.

Furthermore, wages are paid to employees who in turn buy products which

create more employment, etc. This is the reason a country can be expected

to place emphasis on industrialization--and may find it beneficial to con-

centrate on industries which have the greatest value added to the extent

that resources and supplies are available [2].

Output multipliers were derived for five types of processed beef pro-

ducts; live cow exports, bone-in beef quarters, frozen boneless manufac-

turing beef, cooked-frozen beef and canned beef in an earlier study [5].

The budgets utilized for calculating the multipliers are derived from a

survey of packing plants in Argentina, Brazil, Paraguay and Uruguay.2

Results, presented in Table 9, show that the highest multipliers are for

products with the greatest processing. Cooked-frozen beef has the largest

type II (labor is included) output multiplier while canned beef is close

behind.3 Bone-in quarters and frozen boneless manufacturing beef are

nearly tied for third, and live cow exports are much lower than any of

the others. Exporting live cows, for example, only generates $3.33 worth

of direct and indirect economic activity in Argentina for every dollar's

worth of sales whereas cooked-frozen beef yields $4.87. As can be ob-

served, there is little different between the countries when the absolute

numbers are placed on an index basis with frozen boneless manufacturing

beef as a base.

Several conclusions stem from these analyses. The principal one is

that the product ordering is the same for all four of the input-output



2 For a good discussion of the various type multipliers see [4].

3Computation of multipliers is given in [4].







(23)


(I-0) studies in which the budgets were inserted. Cooked-frozen beef has

the highest multiplier followed by canned, manufacturing, quarters and

finally live cow exports. Furthermore, as might be hypothesized, the

relative differences between the products are sufficient to suggest that

more economic development could be achieved from exporting the processed

products. A second conclusion is that the relative magnitudes probably

hold for other canned beef exporting countries such as Paraguay and the

other Latin American beef exporting nations as well as the ones evaluated

and that, other factors being favorable, those countries should encourage

export of the products in the order listed above. Naturally, care must

be taken that oversupply does not result.

Insertion of the budgets in the four different I-0 studies suggests

that the relative contribution of a product line to economic development

is often the same in different countries. Hence, when an input-output

study is not available for a country, analysis of the relative contribu-

tion to development could be evaluated using an I-0 study from a country

with a similar economy provided the results are applied with some judg-

ment. It would be very useful, for example, to have actual budgets for

United States canned beef processing which could be inserted in a disag-

gregated I-0 study for some state in the United States. However, such

information is not readily available and would be costly to obtain.

SUMMARY


An explanation of United States canned beef imports was presented

within the context of world canned beef trade. It was shown that, while

the United States accounts for about one-fourth of world canned beef im-

ports, imported canned beef only amounts to about one-half of one percent

of total U.S. beef consumption.




(24)


An impact study using economic multipliers demonstrates that canned

beef exports provide considerably more income and economic activity for

each dollar's worth of final demand than do exports of live cattle, bone-in

beef or manufacturing beef. Consequently, if the United States is really

interested in assisting the developing countries, then maintaining canned

beef imports is one good "trade-not-aid" method. Also, considering that

the only way in which countries with endemic hoof-and-mouth disease such

as Argentina, Brazil, Uruguay and Paraguay can export beef to the United

States is in the cooked form, then the United States is assisting in bal-

ancing world trade in beef by not placing canned beef under the new meat

import bill.

Another piece of the analysis relates to trade balance. The United

States appears to have a comparative advantage in fed beef production as

opposed to slaughter cow production. It would appear that a logical strat-

egy would be pushing for freer trade in beef in an effort to open up the

European and Japanese markets to a greater extent while not placing canned

beef under quota. In this way consumers in all three areas are better

off.

The new countercyclical meat import bill will likely reduce the amount

of canned beef which will enter the United States in the early part of

the beef cycle which began January 1, 1980 from that which would be expected

but a greater amount would enter in the latter part of the cycle. Overall,

changing to a countercyclical bill will have little effect on the average

quantity imported, i.e., no new trends should be set. Perhaps most impor-

tant, because imported canned beef is such a small percentage of United

States canned beef imports (7-8 percent of all beef imports) and is only

about four-tenths of one percent of total domestic beef consumption, re-

duction of imports would have a negligible effect on U.S. producer prices.




(25)


References



[1] Hjort, Howard W., "Statement of Howard W. Hjort Before the House On
Ways and Means," Subcommittee on Trade, April 30, 1979.


[2] Leontief, Wassily, I
ersity Press, 1966).


nput-Output Economics, (New York:


Oxford Univ-


[3] Miernyk, William H., The Elements of Input-Output Analysis, (New
York: Random House, 1957, paper).


[4] Miernyk, William H. and Kenneth L. Shellhammer, Simulating Regional
Economic Development with an Input-Output Model, Regional Research
Institute, West Virginia University, Morgantown, West Virginia, 1968.


[5] Simpson, James R., "Disaggregated Input-Output Models as an Economic
Development Policy Tool," American Journal of Agricultural Economics,
November, 1975, pp. 584-590.


[6] Simpson, James R. and Jill Mirowsky, World Trade in Canned Beef,
1962-1976, International Programs Report No. 2, University of
Florida, 1979.


[7] Simpson, James R.,."Cattle Cycles:
Cattleman, January, 1979.


A Guide for Cattlemen," The Florida


[8] Steele, William S., "The Computation of Imported Processed Agricultural
Commodities in an Urban Retail Market--An Empirical Study,"
Ph.D. Dissertation, The Pennsylvania State University, 1970.




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