Dynamic Changes in Rail Shipping Mechanisms for Grain
Agribusiness and Applied Economics Report No. 798 June 2020 Dynamic Changes in Rail Shipping Mechanisms for Grain Dr. William W Wilson Department of Agribusiness & Applied Economics Agricultural Experiment Station North Dakota State University Fargo, ND 58108-6050 ACKNOWLEDGEMENTS NDSU does not discriminate in its programs and activities on the basis of age, color, gender expression/identity, genetic information, marital status, national origin, participation in lawful off-campus activity, physical or mental disability, pregnancy, public assistance status, race, religion, sex, sexual orientation, spousal relationship to current employee, or veteran status, as applicable. Direct inquiries to Vice Provost for Title IX/ADA Coordinator, Old Main 201, NDSU Main Campus, 7901-231-7708, ndsu.eoaa.ndsu.edu. This publication will be made available in alternative formats for people with disabilities upon request, 701-231-7881. NDSU is an equal opportunity institution. Copyright ©2020 by William W. Wilson. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided this copyright notice appears on all such copies. ABSTRACT Grain shipping involves many sources of risk and uncertainty. In response to these dynamic challenges faced by shippers, railroad carriers offer various types of forward contracting and allocation instruments. An important feature of the U.S. grain marketing system is that there are now a number of pricing and allocation mechanisms used by most rail carriers. These have evolved since the late 1980’s and have had important changes in their features over time. The operations and impact of these mechanisms are not well understood, yet are frequently the subject of public criticism and studies and at the same time are revered by (some) market participants.
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