ECONOMIC IMPACTS OF STRUCTURAL CHANGES IN THE WHEAT LOGISTICS SYSTEM: EXPORTING WINTER WHEAT FROM TWELVE COUNTIES IN NORTHWEST KANSAS (LOCATION)

The purpose of this study is to evaluate the economic impacts on export wheat marketing patterns from alternative logistics systems for the study area. The study area covers 12 counties in northwest Kansas. Export exit destinations are ports on the Pacific Coast and the Gulf of Mexico. Inland terminals and river elevators between the study area and final exit ports were selected for transit points to complete the export wheat logistics system.; Objectives of the study are: (1) to evaluate the economic impacts on export wheat Movement of abandoning the former Rock Island (RI) rail line in the study area; (2) to analyze the economic feasibility of constructing subterminals in the study area; and, (3) to examine the possible impacts on a subterminal system of moving hard red winter wheat in greater amount to the west coast for export.; A capacitated network simulation model was developed for the export logistics system. The model obtained heuristic optimal grain flow structure and minimized the total logistics system cost.; Conclusions reached in this study are: (1) The cost impact on the export wheat logistics system caused by abandoning the former RI rail line is not large relative to total system costs. (2) There is substantial increase of farm storage from abandoning the former RI rail line. (3) Country elevators on the former RI rail line suffered significant loss of export wheat receipts from abandoning the former RI rail line. (4) Substantial savings accrues to the total logistics system from constructing subterminal facilities in the study area--a 10.5 to 11.3 percent savings by using unit-train shipment, compared to 5-car rail shipment. (5) It is infeasible to move export wheat westward from the study area because the additional overland moving cost is higher than ocean freight saving to Pacific destination. (6) The logistics system is sensitive to the rail cost changes. The increase of rail cost improved the competitive position for commercial trucks and barge shipments. (7) Important competitive relationship exists between farms and commercial elevators in storing grain for ultimate export shipment.