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The impact of transportation rates on the location of the wheat flour milling industry

Author

Listed:
  • Michael W. Babcock

    (Associate Professor of Economics at Kansas State University, Manhattan, Kansas)

  • Gail L. Cramer

    (Professor of Agricultural Economics at Montana State University, Bozeman, Montana)

  • William A. Nelson

    (Former graduate student in the Department of Agricultural Economics, Montana State University, Bozeman, Montana)

Abstract

Since wheat and flour are shipped over long distances, railroad rates exert a key influence on the location of the wheat flour milling industry. Two locational models are employed to explain recent trends in the location of the industry. One of these is a transport locational model focusing on flour milling location in the eastern half of the U.S. The other is a linear programming model which analyzes flour milling location in the west. The empirical analysis indicates that high railroad flour rates relative to wheat rates should shift the industry out of the rural wheat producing areas and toward population centers. An analysis of actual industry trends over the 1960-1982 period confirms the empirical results of the locational models. Railroad deregulation does not appear to have affected locational trends in the flour milling industry.

Suggested Citation

  • Michael W. Babcock & Gail L. Cramer & William A. Nelson, 1985. "The impact of transportation rates on the location of the wheat flour milling industry," Agribusiness, John Wiley & Sons, Ltd., vol. 1(1), pages 61-71.
    • Handle: RePEc:wly:agribz:v:1:y:1985:i:1:p:61-71
    DOI: 10.1002/1520-6297(198521)1:1<61::AID-AGR2720010108>3.0.CO;2-9
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    Cited by:

    1. Tilley, Daniel S., 1989. "Value-Added Activities As A Rural Development Strategy: Discussion," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(1), pages 1-4, July.
    2. Azzam, Azzeddine M. & Pagoulatos, Emilio & Schroeter, John R., 1988. "Agricultural Price Spreads And Market Performance," Working Papers 115900, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    3. Barber, Jason T. & Dooley, Frank J., 1996. "Inventory Practices of Flour Milling Firms," MPC Reports 231724, North Dakota State University, Upper Great Plains Transportation Institute.

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