Estimates of Grain Barge Demands for the Upper Mississippi and Illinois Rivers

The upper Mississippi and Illinois Rivers are important transportation resources for United States grain producers and exporters. Unfortunately, the lock and dam system on these Rivers is aged and barge delays have become troublesome in the lower portion of these Rivers. Studies are underway to measure the benefits and costs of upgrading locks on selected segments of these transportation arteries. Knowledge of demand characteristics for barge transportation on these Rivers is important since it is the key to measuring the economic benefits from infrastructure improvements. This paper reports on estimated demands for grain barge transportation on these two transport arteries. Results suggest the demand for grain barge transportation on the upper Mississippi and Illinois Rivers is inelastic. Foreign grain demand and winter season are shown to have an important influence on grain barge demands as do domestic grain consumption and supply.