Impacts of the Panama Canal Expansion on U.S. and Southern Agricultural Trade

SAEA Invited Paper Proposal

Flynn Adcock                                                 Texas A&M University
Rafael Costa                                                   Dept. of Agricultural Economics
(979) 845-8694                                             2124 TAMU                                       College Station, TX  77843-2124

Title:     Impacts of the Panama Canal Expansion on U.S. and Southern Agricultural Trade

Eric Wailes, University of Arkansas,

Paper Presenters:
Mickey Paggi, Fumiko Yamazaki and Srinivasa Konduru, California State University-Fresno,
“Panama Canal Expansion: Agricultural Benefits to a Limited Few?”

Jason Bittner and Timothy Baird, University of Wisconsin,
“Effect of the Panama Canal Expansion on U.S. Grain Exports”

Rafael Costa, John Robinson, and Steve Fuller, Texas A&M University,
“The Impacts of the Panama Canal Expansion on World Cotton Trade”

Lynn Kennedy, Louisiana State University,


In 2006, the Panama Canal expansion was announced by the Panama Canal Authority with estimated completion by 2014.  It is argued that such expansion will potentially alter U.S. agricultural exports, distribution and competitiveness.  Southern U.S. agriculture fully participates in agricultural trade, benefiting from export opportunities while enduring the pressures of import competition.  This invited paper session will identify the potential impacts of canal expansion on U.S. and the Southern agricultural trade.  The first paper will focus on the impacts of the Panama Canal expansion on grain exports, potential modal shifts, and the economic, environmental, and energy consequences of changes related to increased ship capacity of the canal.  The second paper will examine potential gains from canal expansion for U.S. cotton.  The analysis uses a spatial price equilibrium model to show that the reduction in ocean freight rates from East Coast and Gulf ports to East Asian countries will change U.S. cotton export flows and increase total U.S. exports, and the estimated results suggest that the canal expansion could increase revenues for cotton and enhance U.S. global competitiveness.  The final paper examines the history of shipments of commodities through the Panama Canal and provides estimates of the potential benefits that may accrue to Southern region commodities from the expansion of the canal.  Specific comparisons between costs of alternative shipment patterns are considered.  The discussant will address each paper and provide a basis to explore implications for applied research and extension programming in the South.

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