UC Davis Agricultural and Resource Economics

AAEA Presentation by Heidi Schweizer: Impacts of the U.S. Ethanol Boom on Intermodal and Intramodal Competition in Corn Transportation Markets/Response of U.S. Soybean Flows to the Panama Canal Expansion: A Positive Mathematical Programming Model

July 26, 2017

Advisor: Jeffrey Williams and Rachael Goodhue
Fields: Agricultural Economics, Transportation

Time: Monday, July 31st, 4:15 pm – 5:30 pm
Location: Ballroom D-H, 5th Floor

My research interests are concentrated on the different dimensions of commodity price relationships. These dimensions are time, space, and product form. My dissertation focuses on commodities transportation markets and I seek to answer the following questions: What determines the origin and destination for this commodity? What determines transportation mode? How much is shipped between each origin-destination pair? Transportation is a critical component of transaction costs in domestic and international agricultural markets. Transportation costs can be more than ten percent of the final price of commodities.

The Panama Canal Expansion more than doubled the capacity of the canal. Now larger ships, and more ships, can traverse the canal. This has important implications for how grain and oilseed travels from the Midwest United States to Asia. I use positive mathematical programming techniques to forecast how soybean shipping flows within the United States may change. This research is unique in two ways, first, I calibrate my programming model of oilseed flows, and second, I account for shipping seasonality by including the time dimension in my model.

The ethanol boom also has important implications for where corn is shipped. Ethanol production takes place within corn production regions and distance is the main factor that determines transportation mode choice. Depending on location, corn is now more likely to be trucked short distances to ethanol plants rather than shipped longer distances by rail or barge. My work is the first to consider how the ethanol boom has influenced transportation prices in dry bulk freight markets.


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