Virginia’s Grain “Imports” by Rail: A Summary

Peter Caffarelli, Graduate student, Department of Agricultural and Applied Economics, Virginia Tech

Dr. Gustavo Ferreira, (gferre3@vt.edu) Assistant Professor, Department of Agricultural and Applied Economics, Virginia Tech

Dr. Gordon Groover, Associate Professor, Department of Agricultural and Applied Economics, Virginia Tech

Dr. Kathryn Boys, Assistant Professor, Department of Agricultural and Applied Economics, Virginia Tech

Connecting producers and markets (both domestic and abroad), transportation is critical to agriculture. Agriculture is the largest user of the transportation system in the U.S., moving 22 percent of the total tonnage and 31 percent of the total ton-miles in 2007.[1] The modes of transportation—truck; rail; and barge—complement and compete with one another in the shipment of grain.[2] Often, for example, producers will haul their grain by truck to an elevator, which then collects and ships the product via rail or barge to larger markets.

Rail occupies a substantial share—moving 28 percent of the total grain tonnage in 2011.[3]Rail is also crucial to Virginia, particularly for “importing” grain from other states. Though Virginia produced an average of 68.1 million bushels of grain annually from 2006 to 2010,[4] it also houses a considerable amount of animal production.[5] Consequently, Virginia’s shortfall in grain has to be supplemented by pulling grain from the Midwest. Given Virginia’s lack of a direct waterway to the primary grain growing regions of the U.S., rail emerges as a vital alternative for grain transportation over long distances. The purpose of this article is to present the most recent data on the amount and composition of Virginia’s rail receipts.

 According to the Agricultural Marketing Service of the United States Department of Agriculture (AMS), Virginia was ranked 15th out of 45 in total tons of rail receipts from 2006 to 2010.[6] The state received 12.4 million tons of grain by rail during this time span—an average of 2.5 million tons per year (Table 1).[7]

Table 1: Total Rail Receipts in Virginia (tons), 2006-2010

 

Corn

Soybeans

Wheat

Total

Total Tons (2006 to 2010)

5,708,738

2,872,886

3,834,496

12,416,120

Share

46%

23%

31%

100%

Average per Year

1,141,748

574,577

766,899

2,483,224

Source: USDA-AMS data.

As shown in table 1, the bulk of the grain transported by rail into Virginia is corn, accounting for almost half the volume. Compared to a decade earlier (1996 to 2000), rail tonnage decreased for corn, increased significantly for soybeans, and grew more moderately for wheat (Table 2).[8]

Table 2: Comparison of Rail Receipts in Virginia from 1996-2000 to 2006-2010

 

Corn

Soybeans

Wheat

Total

Total Tons, 1996-2000

6,200,000

548,000

2,900,000

9,648,000

Total Tons, 2006-2010

5,700,000

2,900,000

3,800,000

12,400,000

Percentage Change

-8%

429%

31%

29%

Source: USDA-AMS data.

Tables 3, 4, and 5 reveal the geographic origin, average share, and average annual tonnage of the three major grains (corn, soybeans, and wheat) transported by rail to Virginia from 2006 to 2010. More specifically, Table 3 indicates that Virginia’s corn receipts by rail come from Ohio (46%), Indiana (26%), Michigan (12%), Illinois (10%), and other states (6%).[1]

Table 3: Annual Source, Share, and Volume of Virginia Rail Corn Receipts (2006-2010 Average)

State

Share

 Tons

Ohio

46%

525,204

Indiana

26%

296,854

Michigan

12%

137,010

Illinois

10%

114,175

Other

6%

68,505

Total

100%

1,141,748

Source: Authors’ own calculations using USDA-AMS data.

Depicted in table 4, Virginia’s rail soybean receipts come from Ohio (52%), Michigan (17%), New Jersey (10%), Maryland (8%), Indiana (4%), and other states (9%).[2]

Table 4: Annual Source, Share, and Volume of Virginia Rail Soybean Receipts (2006-2010 Average)

State

Share

Tons

Ohio

52%

298,780

Michigan

17%

97,678

New Jersey

10%

57,458

Maryland

8%

45,966

Indiana

4%

22,983

Other

9%

51,712

Total

100%

574,577

Source: Authors’ own calculations using USDA-AMS data.

Finally, according to table 5, Virginia’s rail wheat receipts come from Illinois (68%), Ohio (13%), Virginia (5%), and other states (14%).[3]

Table 5: Annual Source, Share, and Volume of Virginia Rail Wheat Receipts (2006-2010 Average)

State

Share

Tons

Illinois

68%

521,491

Ohio

13%

99,697

Virginia

5%

38,345

Other

14%

107,366

Total

100%

766,899

Source: Authors’ own calculations using USDA-AMS data.

Aggregating the rail receipts for corn, soybeans, and wheat reveals that 37 percent of Virginia’s external railed grain comes from Ohio, 26 percent from Illinois, 13 percent from Indiana, 9 percent from Michigan, and the remaining 15 percent from other states (Table 6).

Table 6: Annual Source, Share, and Volume of Virginia Rail Grain* Receipts (2006-2010 Average)

State

Share

Average Annual Tons

Ohio

37%

923,681

Illinois

26%

635,666

Indiana

13%

319,837

Michigan

9%

234,688

New Jersey

2%

57,458

Maryland

2%

45,966

Virginia

2%

38,345

Others

9%

227,583

Total

100%

2,483,224

Source: Authors’ own calculations using USDA-AMS data. *“Grain” includes corn, soybeans, and wheat.

Driven by animal feeding operations and exports,[4] Virginia supplements a portion of its needed grain by rail. Of note, much of Virginia’s grain by rail comes from the Midwest with 85 percent coming from Ohio, Illinois, Indiana, and Michigan. Interestingly, the data do not provide a clear indication of how much grain arrives via rail (if any) from the states to the south such as North Carolina.

Continued (and likely increased) investment in rail and rail services is necessary. According to the AMS (2010), multiple studies indicate increasing demand for rail freight service. This is because railroad capacity has been strained, especially for bulky agricultural commodities (AMS, 2010).[5] Concerning Virginia, the increase in soybean and wheat rail receipts point to the growing importance of rail in acquiring grain. Finally, further research is needed (and being conducted) to investigate the amount of grain flowing by rail within the state as well as the other transportation modes (truck and barge).

[1] USDA, Agricultural Marketing Service: “State Grain Rail Statistical Summary” (2013), pp. 130. Shares come from the USDA, Agricultural Marketing Service. “Average Annual Tons” was developed by multiplying the average annual amount of corn tonnage per year (1,141,748, Table 1) by the state’s share.

[2] USDA, Agricultural Marketing Service: “State Grain Rail Statistical Summary” (2013), pp. 130. Shares come from the USDA, Agricultural Marketing Service. “Average Annual Tons” was developed by multiplying the average annual amount of soybean tonnage per year (574,577, Table 1) by the state’s share.

[3] USDA, Agricultural Marketing Service: “State Grain Rail Statistical Summary” (2013), pp. 131. Shares come from the USDA, Agricultural Marketing Service. “Average Annual Tons” was developed by multiplying the average annual amount of soybean tonnage per year (766,899, Table 1) by the state’s share.

[4] See p. 13 of “State Grain Rail Statistical Summary” for aggregate numbers of Virginia grain exports (derived from export grain inspections).

[5] USDA, Agricultural Marketing Service: “Study of Rural Transportation Issues” (2010), p. 334, 339, and 348.

 

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