Abstract:  South America  has emerged as a major competitor of the United States in the international grain market over the past two decades.  This study explores the effects of transportation system improvements in South America on their competitiveness in the world grain markets.  Analysis is carried out with spatial, inter-temporal models that represent  forecasted international corn and soybean economies in 2010.  Analyses focuses on port facility improvements, improved navigability of the lower Parana River, the Parana-Paraguay Waterway, the Madeira-Amazon Waterway, extension of a railroad into central-west Brazil and development of a highway linking central-west Brazil to Amazon River ports.  Results show the improved transportation systems increase South American corn and soybean exports about 8 and 2 percent, respectively, while U.S. prices, revenues and exports modestly decline.  Corn prices in the U.S. decline about $0.25/metric ton as a result of the improved transport network while soybean prices decline $2.12/metric ton, and combined corn and soybean revenues of U.S. producers decline about $290 million per year.  Although the revenue loss is significant, it represents a small fraction of U.S. producers annual corn and soybean revenues.
 
 

The Texas Agricultural Market Research Center (TAMRC) has been providing timely, unique and professional research on a wide range of issues relating to agricultural markets and commodities of importance to Texas and the nation for more than two decades.  TAMRC is a market research service of the Texas Agricultural Experiment Station and the Texas Agricultural Extension Service.  The main TAMRC objective is to conduct research leading to expanded and more efficient markets for Texas and U.S. Agricultural products.  Major TAMRC research divisions include International Market Research, Consumer and Product Market Research, Commodity Market Research and Contemporary Market Issues Research.