Characteristics of Grain Elevators that Contract with Railroads

Abstract

The Staggers Rail Act of 1980 allowed contracts between railroads and shippers which have resulted in increased grain prices to some farmers while, at the same time, increasing competitive pressure on some local grain elevators. This study employs a logistic model designed for complex survey designs to identify characteristics of elevators that had railroad contracts during 1983-85. The total volume shipped from an elevator, number of railroads serving an elevator location, and affiliation with elevator firms serviced by more than one railroad company are found to contribute significantly to the probability of a grain elevator receiving a railroad contract.

Secondary rail car markets for grain transportation and basis values

“…Hanson et al (1989) concluded that these guarantee contracts, which were “origin” contracts (contracts between grain shippers and railroads), had a large influence on local wheat bids to farmers and that “destination” contracts (contracts between nonelevator grain buyers and railroads) had large influences on the corn and soybean bids. In a similar study, Hanson et al (1990) found that contract terms, mileage allowances, and mode all have significant effects on the grain elevator's handling margins.…”

Development of a price visualization procedure of cash grain markets using GIS

“…Proximity to railroads effect prices recived by producers also. Research (Hanson, Baumhover, and Baumel 1990) indicates that farmers received higher grain prices as a result of contracts between railroads and country elevators. The exploitation of these price differences is the reason for existence of the grain merchandising industry.…”