Rail Market Share of Grain and Oilseed Transportation

The share of the grain and oilseed harvest moved by rail has been declining since 1980, when the Federal Motor Carrier Act and the Staggers Rail Act were passed. Large structural changes associated with these acts affected the decline over the following two decades. Yet, even though the large structural changes had already taken place by 2000, the rail market share of grain and oilseed transportation has continued to decline. This paper develops a state-level statistical model for 21 of the top grain-producing states (which produce 86.6% of all grain and oilseeds) to investigate which major factors have been responsible for the decrease in the rail market share of grain and oilseed transportation since 2001. Twenty variables are tested in the model, and 10 are found to have a statistically significant impact on rail market share. Of these, three are most important in the decrease of rail market share: ethanol production, biodiesel production, and the concentration of animal feeding.