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GMO Contamination Price Effects in the U.S. Corn Market: StarLink and MIR162

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  • Han, Xue
  • Philip, Garcia

Abstract

While genetically modified technology has been investigated extensively, few studies have examined the price impact of genetically modified food contamination events. This paper contributes to the literature by examining the price effects of multiple genetically modified contamination events in the U.S. corn market. Using the relative price of substitute method and time-varying cointegration, we identify three structural breaks relevant to the corn contamination events, with the two largest being associated with StarLink and MIR162. Our results support the StarLink’s large effect on corn prices, but the effect attributed to MIR162 is less clear. This more recent break in prices emerged three months prior to China’s import ban, and was influenced by changes in U.S. corn supply, and EPA’s proposed reduction of the ethanol mandate. Expansion of sorghum exports and subsequent increased corn production likely kept pressure on corn prices. While China’s import ban on MIR162 may have influenced prices, evidence suggests the recent downturn in the U.S. corn market has been mainly caused by other domestic supply and demand changes.

Suggested Citation

  • Han, Xue & Philip, Garcia, 2016. "GMO Contamination Price Effects in the U.S. Corn Market: StarLink and MIR162," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236004, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:236004
    DOI: 10.22004/ag.econ.236004
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    References listed on IDEAS

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    Keywords

    Agribusiness; Agricultural Finance; Demand and Price Analysis; Marketing;
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