Train at sunrise.

Modeling and Analysis of Transportation Requirements for the Production and Marketing of U.S. Agricultural Commodities

Principal Investigator

Gerald McCullough

Department and College

Department of Applied Economics in the College of Food, Agricultural and Natural Resource Sciences

Project Number

14-152

Funding Type

Hatch

Project Start and End Date

October 1, 2017-September 30, 2020

Project Summary

The basic aim of this research is to provide thorough and analytically sound analyses of economic conditions in U.S. freight markets (particularly rail markets) as these apply to agricultural shippers. The major developments that will affect shippers are (1) a new regulatory regime for railroads, (2) potential shortfalls in revenue for railroads due to loss of coal traffic, (3) a potential merger wave among railroads, and (4) a move toward toll financing of highways and waterways that serve agricultural shippers. Trucks account for about 55 percent of ag shipments in the U.S., while railroads account for 35 percent and waterways for 15 percent. The first three developments would have serious effects on the rates that agricultural shippers are charged.

This project will provide empirical estimates of those effects and will provide a basis for policy discussions. The fourth development would increase the truck and barge rates that agricultural shippers are charged. The analysis proposed here will estimate the extent of these increases and asks whether the rail system has the capacity to accommodate the increased traffic that would result.