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Comparative analysis of producer and processor impacts from bioproduct developments in the Canadian soybean sector

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Title: Comparative analysis of producer and processor impacts from bioproduct developments in the Canadian soybean sector
Author: Wagner, Stephen Mark
Department: Department of Agricultural Economics and Business
Advisor: Weersink, AlfonsMeilke, KarlHailu, GetuThille, Henry
Abstract: Volatility in crude oil prices has spurred new interest in the nontraditional use of agricultural products in the production of biofuels and in other industrial applications such as the Ontario BioCar initiative. It is important to know if these new demands will provide benefits to Ontario farmers. A synthetic structural model that depicts Canada as part of world corn and soybean markets was used to answer this question through a comparative static analysis of how the benefits derived from the biotech demands for corn and soybean oil compare to the benefits that could be obtained from an increase in soybean productivity or from an increase in the export demand for Canadian food grade soybeans. It was found that Canadian farmers see producer surplus improvements from increases in corn ethanol demand, despite the increasing use of distillers dried grains, if they are willing to grow corn at the expense of soybeans. It was also discovered that Canadian soybean growers have little to gain from the development of industrial applications for soybean oil, such as the BioCar project, but that they do benefit when the demand for soybean oil stems from the US and the rest of the world. Soybean productivity improvements created soybean producer surplus losses when they were applied globally, but were beneficial when they were proprietary to Canada. An increase in the export demand for Canadian food grade soybeans provided substantial benefits to food bean growers and more modest producer surplus losses for crush bean growers.
URI: https://hdl.handle.net/10214/25231
Date: 2010
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