MPC
Research Projects (2009-10)

Identifying Number

MPC-336

Project Title

ND Wheat Transportation Knowledge for Market Enhancement

University

North Dakota State University

Project Investigator

Kimberly Vachal, Doug Benson

Description of Project Abstract

U.S. wheat producers have long enjoyed the benefits of a relatively efficient and effective transport system. Over recent years, the wheat transportation market has undergone fundamental changes considering factors such as its own characteristics and the North American network. Developments in the rail market, including the shuttle train, capacity rationing, and North American network integration, have impacted the competitiveness of wheat, among regions and markets, and relative to other commodities.

A study of rail rate deregulation and ND railroads suggests wheat differs from other commodities, in its shipment and rate characteristics (Tolliver and Bitzan 2002, Bitzan and Vachal 2004). In this analysis of U.S. Confidential Rail Waybill, findings suggested that the rail rate differential between wheat and other major crops, and within wheat shippers, is diverging.

In addition to inland transportation market phenomenon, it is important to recognize that as competitors make strategic transportation investments to gain competitive advantages, it is prudent for U.S. wheat producers to play an active role in shaping the transportation system and services that they utilize in marketing their products.

Project Objectives

Provide insight regarding the competitive position of N.D. wheat by increasing market knowledge of market flows and transportation rates to primary domestic markets and export market gateways. This information is critical in assessing future transportation policy and investment.

Project Approach/Methods

Descriptive analysis will used to assess the competitive position of N.D. wheat to domestic and export markets.

PC Critical Issues Addressed by the Research

14. Multimodal Policy and Investment Assessment
18. Economic Analysis of Investments and Impacts

Contributions/Potential Applications of Research

This descriptive analysis of North Dakota's wheat market will provide producers with a detailed and timely understanding of the competitive position of its durum and HRS wheat products, both within the wheat market and compared to other regions. The analysis will consider multimodal and geographic elements that are valuable in understanding implications for transportation policy and infrastructure investment. The knowledge gained in this research will be valuable in assessing market opportunities and to support transportation investments and policies that will position wheat products for future success.

Technology Transfer Activities

Publish 'ND Wheat Transportation Knowledge for Market Enhancement,' in cooperation with ND Wheat Commission that will include railroad tariff and waybill rate trends, market flows, shipment characteristics, and market opportunities.

Time Duration

July 1, 2009 through June 30, 2010

Total Project Cost

$12,175.00

MPC Funds Requested

$5,000

TRB Keywords

Freight, Competitiveness, Logistics

References

• Bitzan, John, Kimberly Vachal, Tamara VanWechel, and Dan Vinje, 2003, The Differential Effects of Deregulation on Rail Rates, North Dakota State University, Upper Great Plains Transportation Institute, MPC-03-144, Fargo.
• Tolliver, Denver and John Bitzan, 2002, Analysis of Revenues and Costs for Wheat Shipments Originated Shipments in North Dakota on the BNSF Railroad, North Dakota State University, Upper Great Plains Transportation Institute, DP-144, Fargo.