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International Grains Model

The FAPRI International Grains Model examines and projects the area, production, usage, stocks, prices, and trade for wheat, corn, barley, and sorghum for several countries and regions of the world.

Structure of the FAPRI/CARD International Grains Model

The FAPRI/CARD International Grains Model is a non-spatial, multi-market model that covers several countries/regions and includes a rest-of-the world aggregate. It has links to other models in the FAPRI framework, such as the U.S. crops model, international cotton, dairy, livestock, oilseeds, rice, and sugar models. The data sources included in the model are the USDA-FAS (Foreign Agricultural Service) Production, Supply, and Distribution (PS&D) data set, the International Monetary Funds' (IMF) International Financial Statistics (IFS) macroeconomic data set, USDA attaché reports, and other sources for commodity prices.

The grains model interacts with the dairy and livestock models that provide information on feed demand in the countries, and with oilseeds and rice models that provide information on the relative profitability and area harvested for the competing crops. Each country submodel consists of at least one commodity depending on the relative importance of the commodity and the relative importance of the country in the world markets as a supplier or a buyer.

In terms of the structure of the models, the following identity is satisfied for each country/region and the world: Beginning Stock + Production + Imports = Ending Stock + Consumption + Exports.

Production is divided into yield and area equations, while consumption is divided into feed and non-feed demand. To satisfy the identity, two different methods are used. In most of the countries, domestic price is modeled as a function of the world price with a price transmission equation, and the identity is satisfied with one of the variables set as the residual. In other cases, prices are solved to satisfy the identity.

Agricultural and trade policies in each country are included in the model to the extent that they affect the supply and demand decisions of the economic agents. Examples of these include taxes on exports and imports, tariffs, tariff rate quotas, export subsidies, intervention prices, and set-aside rates.

The grains model assumes that the existing agricultural and trade policy variables will remain unchanged in the outlook period. Macroeconomic variables, such as GDP, population, and exchange rates, are exogenous variables that drive the projections of the model. The model also includes an adjustment for marketing-year differences by including a residual that is equal to world exports minus world imports, which ensures that world demand equals world supply.

View the current FAPRI-ISU 2011 World Agricultural Outlook.

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