Research Progress Report 390
August 1971

Grain Export Industry Organization and Facilities
In the United States 
Monte E. Juillerat and Paul L. Farris,
Department of Agricultural Economics

Summary
This study focused attention on structural aspects of the grain export industry and on some of the dynamics which may affect future organizational developments. A unique set of circumstances has encouraged several firms to grow large and also to integrate vertically. Substantial economies of size, both in physical operations and in buying and selling grain in international markets, apparently have been contributing factors.
Six major grain exporting firms accounted for 44 percent of the port grain elevators and 56 percent of the storage capacity in major U.S. grain shipping ports in 1968. The six firms had also integrated back toward procurement sources. They operated 106 terminal elevators in the North Central Region in January 1968, including 15 elevators located at Great Lake ports. Their terminal elevators accounted for an estimated 30 percent of terminal elevators in the Region and 27 percent of the capacity. Country elevators owned by these six firms numbered 295 in the North Central Region, but these elevators represented only about 3 percent of regional country elevator capacity. For procurement purposes the six exporting firms also operated about 100 buying offices in grain producing areas of North Central States
In addition to these large exporters, several other types of firms play key roles in international grain marketing. Cooperatives historically have handled substantial volumes of grain at points of first sale, a stage in the marketing channel which is opposite to the relative emphasis of the major exporting firms. In 1968, cooperative grain elevators accounted for an estimated 33 percent of country elevator capacity in the North Central Region, 15 percent of terminal elevator capacity in the North Central Region (including elevators at lake ports) and 10 percent of U.S. port elevator capacity. Of course, many of the cooperatives had looser ties with firms at other vertical stages than did major exporters. However, there appeared to be a trend toward closer vertical coordination among cooperative organizations during the 1960‘s and an increasing interest in integrating forward toward grain market destinations.
Transportation developments are influencing grain export patterns. As the volume of U.S. grain exports rose during the 1960’s, an increasing proportion was shipped from ports in the Gulf of Mexico. Inspections for export of wheat, soybeans, corn and grain sorghum at Gulf ports rose from 61.3 percent

PURDUE UNIVERSITY • Agricultural Experiment Station • Lafayette, Indiana