APSRU PROJECT SUMMARY NO. 60

Project Title:                        Effects of Improved Climate Forecasting on Competitiveness in the International Grain Market

Project Supervisor:           G.L. Hammer (APSRU), Dr J.W. Mjelde (Texas A&M Univ)

Funding Body:                  NOAA, US Govt

Admin Contact:   GL Hammer

Commencement Date:      1/7/96                         Completion Date:   30/6/97

Aims:

1. To evaluate the role of improved climate forecasts on international competitiveness in the wheat market

2. To evaluate the impact of improved climate forecasts for both Australia and the United States on their competitiveness in the international wheat market

Research Proposal Summary:

Several studies at farm scale have demonstrated the value of tactical adjustment of farm management to a seasonal climate forecast.  Other studies at national scale have also indicated strong associations between climate forecasts and commodity yields.  No studies have examined the implications of such forecasts on global commodity pricing through effects on both supply of and demand for grain by major trading countries.

This project will examine the role of improved climate forecasts on international competitiveness in the international grain market using a world trade model that takes account of supply and demand relationships.  Crop simulation studies will be employed to determine optimal production inputs based on improved forecasts.  Thes studies will be used to obtain estimates of firm, regional, and national supply of wheat in Australia and US based on use of forecast information.  These supply estimates will be compared with estimates derived without use of improved forecasts.  These supply estimates will be utilised in a world trade model to be enhanced as part of the project.  The trade model will be applied to quantify various economic parameters including world price, quantity exported/produced, the welfare of the consumer and producers international market share, and producer prices for various scenarios concerning the adoption of climate forecasts.

Potential Outcomes:

Methodology for examining impact of seasonal climate forecasts on world grain trade and price. 

Preliminary evaluation of role of forecasts in international competitiveness

Project Publications: