Analyses of the Upper Mississippi and Illinois Rivers as Grain Transport Arteries: A Spatial Equilibrium Analyses

Grain is the primary commodity transported on the upper Mississippi and Illinois Rivers, comprising about half of the tonnage on the upper Mississippi and 40 percent of the Illinois River traffic. It is estimated these rivers annually originate about 36 million metric tons of corn and soybeans that are primarily destined for export at lower Mississippi River ports. Spatial models representing the international grain economy are developed to estimate the annual contribution of the upper Mississippi and Illinois Rivers to Midwest grain producer revenues and evaluate alternate grain routing necessitated by a catastrophic event at Lock and Dam 27 near St. Louis, a facility grain must pass on its route to lower Mississippi River ports. The analysis suggests the annual value of the upper Mississippi and Illinois Rivers for grain transport ranges from $233 to $799 million but based on the most likely scenario to range from $312 to $549 million. The catastrophic analyses examined the value of alternate routings and corridors given a violent event at Lock and Dam 27 and results show the segment of the Mississippi River immediately below St. Louis to be an attractive routing for grain from Illinois, Iowa, and Minnesota given closure of these rivers. Also of great importance as alternate routings was rail transportation on the Corn Belt to Gulf corridor, and grain shipments via the Ohio River and Great Lakes. The upper Mississippi and Illinois Rivers are important transport arteries for the Midwest grain economy and their value and the value of alternate grain transport corridors and routings is greatly dependent on pricing decisions by competing railroads.