Essays on the Upper Mississippi River and Illinois Waterway and U.S. grain market

This dissertation examines several issues regarding the congestion on the UpperMississippi River and Illinois Waterway. Chapter II identifies and measures the impactof lock congestion on grain barge rates on these waterways. Results indicate grain bargerates on both rivers are not affected by lagged lock congestion. In present time,however, lock congestion in the lower reaches of the upper Mississippi and IllinoisRivers are found to increase barge rates that link the north central United States to thelower Mississippi Gulf port area. The findings suggest the impact of lock congestion ongrain barge rates is moderate.Chapter III explores the interaction between grain prices in export and domesticmarkets and transportation rates linking these markets over time. Three modelframeworks were evaluated and some consistent results are observed. In general, shocksin transportation rates (barge, rail, and ocean) explain a great proportion of the variationin corn and soybean market prices in the long run, suggesting the importance oftransportation in grain price determination. The volatile ocean freight rates are the mostimportant transportation rates contributing to the variation in grain prices, while shocksin barge rates on the Upper Mississippi River and Illinois Waterway generally explainless than 15 percent of the variation in grain prices. The dynamic interrelationshipsamong the six evaluated transportation rates are also found. In addition, the northcentral corn markets likely have the most influence over other markets while soybeanexport price dominates the soybean market in the long run.Chapter IV estimates the structural demand for grain barge transportation on boththe upper Mississippi and Illinois Rivers. Results suggest foreign grain demand is themost influential force affecting grain barge demand on both rivers. Also, results indicatean inelastic demand for grain barge transportation on the Upper Mississippi in the shortrun; demand is price elastic in the long run. The price elasticity for grain barge demandon the Illinois River is consistently inelastic. Additionally, the winter season and floodsaffect demand on the Upper Mississippi negatively, while barge demand increases on theIllinois River in winter.