Dynamic Changes in Spatial Competition for Fertilizer

William Wilson, Sumadhur Shakya and Bruce L. Dahl

No 174402, Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: Changes are evolving that are impacting the U.S. nitrogen fertilizer industry. Changes in crops, increased demand, reductions in natural gas prices, and spatial competition among producers and imports are affecting the nitrogen fertilizer industry. A spatial competition model of the United States fertilizer sector was developed to determine the likely future spatial distribution of production and flows for nitrogen fertilizer. The model minimizes production and shipping costs from plants and imports to demand areas. A base model of 2010-12 was developed and a future case was modeled representative of 2018. The most valuable (lowest cost) origins for US processing are primarily in Louisiana, followed by others states with low natural gas prices. Shadow prices indicate several locations in Wyoming, Iowa, Georgia, Louisiana, Nebraska, Kansas, and North Dakota would be positive. Not all of proposed plants would be viable and if forced to operate at 75% of capacity or more only a few of the new plants including those located in Louisiana, Iowa and North Dakota would be viable.

Keywords: Crop Production/Industries; Demand and Price Analysis; Farm Management (search for similar items in EconPapers)
Pages: 31
Date: 2014-06
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaae:174402

DOI: 10.22004/ag.econ.174402

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