Rail’s Loss of Grain Transportation Market Share

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 continued to decline. A State-level statistical model for 21 of the top grain-producing States (which produce 86.6 percent of all grain and oilseeds) investigated the major factors responsible for the decrease in the rail market share of grain and oilseed transportation from 2001 to 2010. Although not every factor affecting the rail market share of grain and oilseed transportation could be captured, 10 statistically significant factors were identified. Of these factors, three were the most important: the growth of ethanol production, the growth of biodiesel production, and increases in animal feeding