1. Enhancing mobility of people and goods in rural America. WHEAT MARKET TRANSPORTATION COMPETITIVENESS Kimberly Vachal, PhD Agricultural and Industrial Freight Center Upper Great Plains Transportation Institute, NDSU April 2010

2. Enhancing mobility of people and goods in rural America. Overview Background Market Flows Characteristics Trends Future Work

3. Enhancing mobility of people and goods in rural America. Focus: Scope/Competitive Position  US produces over 2B bushels of wheat annual  ND production concentrated in HRS and durum – local, domestic, and export markets; imports also a factor  Canadian proximity/access  Intramodal, intermodal, product, and geographic competition factors Source: NASS, USDA, 2010 US Wheat Production 2007/08 to 2009/10

4. Enhancing mobility of people and goods in rural America. Competition  Intramodal  Intermodal  Product  Geographic

5. Intramodal Competition Rail Grain Originations, 1980Rail Grain Originations, 2007 Source: American Association of Railroads

6. Enhancing mobility of people and goods in rural America. Intermodal Competition  Barge Accessibility  Local Processing – Trucks  …Container?

7. Enhancing mobility of people and goods in rural America. Producer Truck Investments

8. Enhancing mobility of people and goods in rural America. Shuttle Investment 1999=7 2010=49 * *Update in Progress,.

9. Why is Rail Important? HRS WheatDurum

10. Why is Rail Important? HRS WheatDurum *Preliminary; Source: NDPSC Grain Movement Data

11. Enhancing mobility of people and goods in rural America. Is Rail Important? Rail Utilization for Wheat

12. Enhancing mobility of people and goods in rural America. Is Rail Important? U.S. Wheat Exports Relative Dependence

13. Enhancing mobility of people and goods in rural America. Is Rail A Factor?

14. Enhancing mobility of people and goods in rural America. Waybill Market Flows, 2008

15. Enhancing mobility of people and goods in rural America. Market Concentration/Diversification Source: STB Public Use Waybill, U.S. DOT, 2008

16. Enhancing mobility of people and goods in rural America. Waybill Market Flows Shift East to West: Grand Forks BEA, 8% to 44% Minot BEA, 23% to 42% Fargo BEA, 10% to 52%

17. Enhancing mobility of people and goods in rural America. Rail Industry Rate Trends Source: Association of American Railroads, Freight Commodity Statistics. Adapted from USDA, 2010

18. Enhancing mobility of people and goods in rural America. Grain and Oilseed Revenue per Ton Source: USDA, 2010 from STB Waybill Summary. FCS, car premiums/discounts not included in tariff revenue.

19. Enhancing mobility of people and goods in rural America. Grain and Oilseed Nominal RPTM, by Shipment Size Source: USDA, 2010 from STB Waybill Summary. FCS, car premiums/discounts not included in tariff revenue. Approximately 37 bushels/ton and 3,333 bushels per car.

20. Enhancing mobility of people and goods in rural America. Wheat – Average Shipping Rate Compared to Average Farm Price Source: STB and NASS adapted from USDA, 2010 FCS, car premiums/discounts not included in tariff revenue. Approximately 37 bushels/ton and 3,333 bushels per car.

21. Enhancing mobility of people and goods in rural America. Local Tariff Rate Trends, Wheat Minneapolis Portland Source: BNSF Published Tariff FCS, car premiums/discounts not included in tariff rate. Approximately 37 bushels/ton and 3,333 bushels per car. $ per Car

22. Enhancing mobility of people and goods in rural America. Summary Points  The data reveal shifts in some of the origin-destination corridors  Concentration v. diversification in US and Canadian origin-destination patterns  A spike and non-traditional patterns in deliveries to the Duluth market is identified for the most recent marketing year as well as an increasing trend in durum imports for the U.S. consumer market.  Narrowing in rail rate spreads among shipment sizes  Lower expenditures per bushel mile in rail wheat markets, but unclear regarding implications related to competitiveness in rail alternatives and market access

23. Enhancing mobility of people and goods in rural America. Future Research Factors for Focusing Efforts in Supply Chain Opportunities/Transport Competitiveness Expand Descriptive Analysis Modeling Wheat Supply Chain Scenarios & Sensitivity Optimization – Partial Equilibrium Model for HRS and Durum Market Flows Factorial Analysis – Role of Intramodal and Intermodal Competition (1999, 2005, 2009)

24. Enhancing mobility of people and goods in rural America. Discussion