MPC
Research Projects (2006-07)

Identifying Number

MPC-267

Project Title

Estimating Local Economic Impacts of Rail Investments and Rail Capacity Constraints in the HRS Wheat Market

University

North Dakota State University

Project Investigator

Kimberly Vachal, NDSU
kimberly.vachal@ndsu.edu

External Project Contact

Jim Peterson, ND Wheat Commission

Project Objective

The goal of this research is to gain insight into the role that a compendium of transportation factors have in the local grain market and ultimately the rural economy.

Project Abstract

Many changes have affected the local hard red spring (HRS) wheat grain marketing system over recent years. Some of these changes are the introduction of shuttle train rates and increasing competition from crops such as soybeans and corn. Other transportation related market forces that continue to shape production and marketing decisions are on-going rail service issues, producer investments in trucks, developing niche markets, and high fuel costs. Initially, a descriptive analysis of the HRS wheat market will be presented to define the context for this research discussion. A multivariate regression model will then be defined to gain insight into the role that individual factors such as shuttle rates, crop diversity, production volumes, rail capacity constraints, domestic consumption, ocean freight rates, and export sales, have on the prices received by local grain producers. This research will better enable us to discuss the potential implications of future policies and investments, in terms of their role in influencing local market prices. In addition, it will allow us to better quantify local economic impacts of individual factors in the marketing system.

Task Descriptions

1. Conduct literature review; develop market information, and identify data sources (October 2006)
2. Draft mathematical ND wheat basis model and scenarios for spatial scenario draw area analysis (January 2007)
3. Complete draft analysis for review by market experts (February 2007)
4. Attend annual National Grain and Feed Association transportation committee or other industry meeting to discuss project with industry experts (March 2007)
5. Complete draft research report (May 2007)
6. Submit research report to ND Wheat Commission and the NDDOT for comments (June 2007)
7. Revise and finalize research publication (June 2007)

Milestones, Dates

Starting Date: July 1, 2006
Ending Date: June 30, 2007

Yearly and Total Budget

$50,000

Student Involvement

One undergraduate student

Relationship to Other Research Projects

None

Technology Transfer Activities

Research report; journal article submission; conference presentation

Potential Benefits of the Project

Policy development and assessment; local infrastructure investment and management decisions

TRB Keywords

Rail, Agriculture, Freight