Impact of Railroad Contracts on Grain Bids to Farmers

The deregulation of railroads by the Staggers Rail Act of 1980 reversed nearly a century of prohibition of contracts between railroads and shippers/receivers. This paper presents an analysis of the impact that railroad contracts have on grain bids to corn, wheat, and soybean farmers. The empirical results indicate that destination contracts had significant impacts on prices bid to corn and soybean farmers, while origin contracts had significant and large impacts on prices bid to wheat farmers.