February 15-18, 2009 Washington State Convention Center Seattle ...

ANALYSIS OF CATFISH SUPPLY, DEMAND AND TRADE IN USA: BASELINE MODEL,
ESTIMATION STRATEGY AND PRELIMINARY RESULTS
Madan Mohan Dey*, Kehar Singh, Carole Engle and Abed Rabbani
Aquaculture/Fisheries Center
University of Arkansas at Pine Bluff
1200 N University Drive, Mail slot 4912
Pine Bluff, AR 71601 USA
mdey@uaex.edu
The USA is the world’s largest producer of Channel catfish. The US catfish industry was one of the fastest growing businesses
in the 1980s and 1990s. But it has been on a contracting course over the last few years, and its production, imports and prices
scenarios are changing rapidly. The industry is facing higher feed price and strong competition from importers of catfish and
similar products like tilapia. Decision makers at different levels are facing with a number of what-if questions. What will
happen to the domestic prices of catfish if the production of catfish and competing products in the importing countries will
change? What if import unit value will change due to policy interventions? What if cost of production in the importing country
change? Quantitative modeling of catfish supply, demand and trade in the USA is a useful tool for analyzing recent structural
changes in the US catfish industry and for comparative analysis of policy options. The Aquaculture and Fisheries Center of the
University of Arkansas at Pine Bluff has recently constructed a model for the US catfish industry to analyze these issues. This
paper presents the structural version of the model, outlines the estimation strategy for specifying its parameters, and reports
preliminary results.
The model is composed of a production, consumption and trade core, and is specified to accommodate special features of the
US catfish industry. It integrates common features of partial equilibrium and gravity models. The model allows for changes
in tariffs and other policy instruments to be shocked to determine the resulting domestic price and quantity levels. It enables us
to assess effects on prices and quantities demanded and supplied under a variety of alternative policy options. The model also
provides us with forecast for catfish market prices, domestic demand and supply, and import demand and supply. To check the
accuracy of the forecast, the model uses Mean Absolute Forecast Errors worked out at different points of forecast.