Agriculture and transportation are interdependent. Government policies have affected railroads’ investments, competition and rate/service performance. The performance is mixed and of concern for the future. Measures to evaluate investments and regulatory performance are offered.

Railroads were partially deregulated in 1980, and since then there have been significant changes in the industry, some of which impact agricultural markets directly. In particular, the legislation impacts prices, consolidation, and the competitive options available to agricultural shippers.

Canada has experienced recent regulatory changes in its grain handling and transportation system. The Canadian experience provides some lessons for improving oversight in the United States for this important agricultural supply chain.

Reliance of wheat shippers on railway transportation is higher than the percentages for grain and soybeans. The central and northern plains have no cost effective transportation alternative to railroads. Some states have more competition among railroads than others. The lack of rail competition leads to higher transport rates for wheat.

Regional competitiveness of agricultural regions is dependent upon efficient freight transportation. Given limited funding for transportation projects, a rational prioritization framework is needed for decision makers. In particular, some models provide a superior framework for fully highlighting the economic impacts of improving freight movement.