The impact of transportation rates on the location of the wheat flour milling industry

Abstract

Since wheat and flour are shipped over long distances, railroad rates exert a key influence on the location of the wheat flour milling industry. Two locational models are employed to explain recent trends in the location of the industry. One of these is a transport locational model focusing on flour milling location in the eastern half of the U.S. The other is a linear programming model which analyzes flour milling location in the west. The empirical analysis indicates that high railroad flour rates relative to wheat rates should shift the industry out of the rural wheat producing areas and toward population centers. An analysis of actual industry trends over the 1960–1982 period confirms the empirical results of the locational models. Railroad deregulation does not appear to have affected locational trends in the flour milling industry.