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Analysis Of Dynamic Interrelationships Between Transportation Rates And Grain Prices

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  • Yu, Tun-Hsiang (Edward)
  • Bessler, David A.
  • Fuller, Stephen W.

Abstract

Transportation rates are vital components in the structure of U.S. grain exports. In this paper we study the dynamic properties of corn and soybean prices, and barge, rail and ocean shipping rates using time series analysis on monthly 1992-2001 data. Using Error Correction Model and Directed Acyclic Graphs, we capture the interconnectivity between the transportation rates and grain prices at selected domestic and export markets. We find Illinois processor prices are important sources of price discovery for both corn and soybeans. Further, barge rates explain about 2-4% of the variation in grain prices while rail rates explain about 10-12% of the variation in corn and soybean prices.

Suggested Citation

  • Yu, Tun-Hsiang (Edward) & Bessler, David A. & Fuller, Stephen W., 2004. "Analysis Of Dynamic Interrelationships Between Transportation Rates And Grain Prices," 2004 Annual meeting, August 1-4, Denver, CO 20339, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20339
    DOI: 10.22004/ag.econ.20339
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    References listed on IDEAS

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    1. David A. Bessler & Seongpyo Lee, 2002. "Money and prices: U.S. Data 1869-1914 (A study with directed graphs)," Empirical Economics, Springer, vol. 27(3), pages 427-446.
    2. Miljkovic, Dragan & Price, Gregory K. & Hauser, Robert J. & Algozin, Kenneth A., 2000. "The barge and rail freight market for export-bound grain movement from midwest to Mexican Gulf: an econometric analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(2), pages 127-137, June.
    3. Swanson, N.R. & Granger, C.W.J., 1994. "Impulse Response Functions Based on Causal Approach to Residual Orthogonalization in Vector Autoregressions," Papers 9-94-1, Pennsylvania State - Department of Economics.
    4. Lutkepohl, Helmut & Reimers, Hans-Eggert, 1992. "Impulse response analysis of cointegrated systems," Journal of Economic Dynamics and Control, Elsevier, vol. 16(1), pages 53-78, January.
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    Cited by:

    1. Moon, Sang & Koo, Won W., 2006. "Effects of the Panama Canal on U.S. Competitiveness on the World Soybean Market," 2006 Annual meeting, July 23-26, Long Beach, CA 21418, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Quaye, Leonard-Allen A. & Stewart, Shamar & Massa, Olga Isengildina, 2025. "Transportation Disruptions and Corn Basis Volatility along the Mississippi River," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361205, Agricultural and Applied Economics Association.

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