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Dynamic Changes in Spatial Competition for Fertilizer

Author

Listed:
  • Wilson, William W.
  • Shakya, Sumadhur
  • Dahl, Bruce L.

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.

Suggested Citation

  • Wilson, William W. & Shakya, Sumadhur & Dahl, Bruce L., 2014. "Dynamic Changes in Spatial Competition for Fertilizer," Agribusiness & Applied Economics Report 174402, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaae:174402
    DOI: 10.22004/ag.econ.174402
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    File URL: https://ageconsearch.umn.edu/record/174402/files/AAE726.pdf
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    References listed on IDEAS

    as
    1. Francisco Rosas, 2011. "World Fertilizer Model-The WorldNPK Model," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 11-wp520, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Olson, Kent D. & Rahm, Michael & Swanson, Michael J., 2010. "Market Forces And Changes In The Plant Input Supply Industry," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 25(4), pages 1-6.
    3. Maung, Thein A. & Ripplinger, David G. & McKee, Gregory J. & Saxowsky, David M., 2012. "Economics of Using Flared vs. Conventional Natural Gas to Produce Nitrogen Fertilizer: A Feasibility Analysis," Agribusiness & Applied Economics Report 133410, North Dakota State University, Department of Agribusiness and Applied Economics.
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    Cited by:

    1. Wilson, William W. & Shakya, Sumadhur & Dahl, Bruce, 2015. "Dynamic changes in spatial competition for the nitrogen fertilizer industry in the United States," Agricultural Systems, Elsevier, vol. 135(C), pages 10-19.
    2. Philippe Bich & Rida Laraki, 2014. "On the Existence of Approximate Equilibria and Sharing Rule Solutions in Discontinuous Games," Working Papers hal-01071678, HAL.

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    More about this item

    Keywords

    Crop Production/Industries; Demand and Price Analysis; Farm Management;
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