The objectives of this study are as follows: 1) Develop predictive models of long term profitability of grain-dependent short line railroads in the Midwestern states; 2) Identify the key factors influencing grain-dependent short line profitability by empirical estimation of the models developed in Objective 1; and 3) Develop a quantitative profile of a grain-dependent short line that is likely to be profitable in the long term. This report will help governmental decision makers allocate aid to those short line railroads which need aid and are most likely to be profitable. Using the equations, one can estimate the profitability of the railroad prior to income taxes, maintenance and interest expenses and non-interest governmental aid.