United States poultry exports to the European Community : the impact of the 1992 greater economic harmonization

Profitability of U.S. poultry industry is affected by developments in the world markets, although in the past it has appeared to be insulated.

The European Community (EC) is in the process of creating a single, unified European market in 1992. This economic integration will have a significant impact on poultry producers both inside and outside the EC, especially due to the adoption of new standards and the removal of Monetary Compensatory Amounts (MCAs).

The objective of this study is to describe the current efforts to enhance economic integration within the European Community and to analyze how its implementation may affect the U.S. poultry industry. This was accomplished by estimating the demand for U.S. poultry in the five largest EC importing nations which accounted for 54 percent of total value of U.S. poultry exports to the EC, and the rest of the EC as an aggregated group. The sum of their poultry demand was incorporated in a U.S. export supply function to determine the effect of changes in EC demand on the U.S. export price.

The results indicate that the EC's domestic poultry prices EC have a greater impact on poultry exports than the U.S. export price. The results suggest that harmonization of prices that lead to a 1 percent fall in poultry prices will result in a 1.6 to 2.7 percent fall in the quantity of U.S. poultry demanded. However, U.S. export prices are not expected to be greatly affected.