The impact of the Export Enhancement Program on the soybean market in the United States

Uri, N.D.; Chomo, G.V.; Hoskin, R.; Hyberg, B.

Applied Economics 25(3): 389-402


ISSN/ISBN: 0003-6846
Accession: 002521749

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This study examines the nature and extent of the market inter-relationships between the price of soyabeans, the price of soyabean meal and oil and the crushing margin, in order to assess how processors benefit relative to farmers with regard to the Export Enhancement Program as it applies to soyabean oil. The results suggest that while both farmers and processors do benefit from the programme, processors benefit proportionately more than farmers, receiving nearly three times the relative return of farmers from the effects of the programme. This observed outcome is a function of the joint nature of the products being produced (soyabean meal and oil) by processors and the relatively lower importance afforded to soyabean oil in the production process. In an absolute sense, however, the returns to soyabean farmers are substantially greater than those to processors, being a function of the magnitude of the price of soyabeans relative to the crushing margin.