Abstract
Grain producers and merchants have long relied on the upper Mississippi and Illinois rivers to transport com and soybeans from producing areas in the Com Belt to international and domestic markets. Many of the locks and dams on this waterway system have operated in excess of their service life and are expected to reach their capacity limits by the year 2000. Lack of innovation and investment is expected to negatively affect navigation by increasing the barge rate for transporting grain to lower Mississippi River pons such as New Orleans which is the principal export intershipment point for U.S. grains. The purpose of this study is to analyze the effect of infrastructure deterioration and anticipated congestion on the com and soybean transportation system. Specifically, to analyze the effects of the expected increase in barge rates on com and soybean producers' revenues, river traffic, and the U.S.'s share of the world market. Partial equilibrium models which link excess supply regions in the United States and other major exporters to domestic and foreign excess demand regions were developed for the corn and soybean sectors. All excess demand and supply locations were represented by price responsive relationships. The com and soybeans sectors were represented and solved in a quadratic programming formulation. The models include grain handling, storage and transportation activities associated with marketing and distribution. The com and soybean models select the grain distribution patterns that maximize the net social welfare and satisfy endogenous quantities demanded in the domestic and foreign markets. The models' results show higher barge costs on the upper Mississippi and Illinois waterways would reduce U.S. com and soybean producers' annual revenues by $26.4 million and $16.4 million, respectively, in year 2020. Producing states that are most affected include Iowa, Minnesota, South Dakota and Illinois for soybeans; and Iowa, Missouri, Minnesota, Nebraska and Ohio for com. Furthermore, the volume of com and soybeans shipped through the waterway system to the lower Mississippi port area would decrease by two million tons of com and 1.4 million tons of soybeans in year 2020...
Fellin, Luis Remo (1993). International corn and soybean transportation system : Quadratic programming models. Texas A&M University. Texas A&M University. Libraries. Available electronically from
https : / /hdl .handle .net /1969 .1 /DISSERTATIONS -1475827.