The Impacts of Biofuel Policies on Spatial and Vertical Price Relationships in the US Fertilizer Industry

Bekkerman, Anton; Gumbley, Thomas; Brester, Gary W.

doi:10.1002/aepp.13038

Cited by 8 publications

(4 citation statements)

References 24 publications

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“…Lower N fertilizer demand and higher production costs resulted in a reduction from 59 to 22 ammonia production facilities in the U.S., accompanied by a reduction in the number of companies from 46 to 13 by 2000 (Bekkerman et al., 2020). In 1980, annual ammonia capacity in the U.S. exceeded 20 million metric tons; by 2012, that capacity had decreased to approximately 12 million metric tons.…”

Section: Nitrogen (N)mentioning

confidence: 99%

Soil Fertility, Fertilizers, and Crop Nutrition: Past, Present, and Future

Mikkelsen,

Blaylock

2024

Crops & Soils

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Over the past few decades, the North American fertilizer sector has experienced significant transformations, integrating into the global supply chain, which is pivotal for sustaining an abundant source of food, fiber, and energy. While the fundamental fertilizer products containing N, P, K, and S have remained largely unchanged, common fertilizers have evolved into agricultural commodities that are extensively traded on a global scale. Consequently, farmers often lack visibility into the origins of the fertilizers used for their crops. The role of the modern plant nutrient industry is essential for feeding a hungry world and preventing degradation of vital soil resources. There is growing awareness of the need for enhanced nutrient stewardship to meet local, regional, and global concerns. This is the second article in a three‐part series on the past, present, and future of the North American fertilizer industry. Earn 1.5 CEUs in Nutrient Management by reading this article and taking the quiz at https://web.sciencesocieties.org/Learning‐Center/Courses.

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Section: Nitrogen (N)mentioning

confidence: 99%

Soil Fertility, Fertilizers, and Crop Nutrition: Past, Present, and Future

Mikkelsen,

Blaylock

2024

Crops & Soils

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“…Doing so allows us to trace the impacts of the policy not only in the fertilizer market but also to downstream agricultural industries. Thus, we also contribute to research on vertical price transmission of policy impacts (Bekkerman et al, 2021;McKendree et al, 2021). Von Cramon-Taubadel and Goodwin (2021) provide an excellent overview of this literature.…”

Section: Introductionmentioning

confidence: 97%

“…Sweeting et al (2020) discuss Federal Trade Commission (FTC) investigations of concentration in the U.S. fertilizer industry, and a related analysis by Kreisle (2020) investigates the effects of a merger in the fertilizer industry on U.S. prices. Bekkerman et al (2021) estimates the impacts of biofuels policy on U.S. fertilizer markets. The authors find that—as a result of biofuels policy—fertilizer prices are now more integrated with corn prices (both in the long and short run) and less responsive to natural gas prices.…”

Section: Introductionmentioning

confidence: 99%

Impacts of U.S. countervailing duties on phosphate fertilizers

Beeler

Schaefer

Sestak

et al. 2023

American J Agri Economics

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Countervailing duties are a trade policy instrument by which importing governments tax imports that are found to benefit from foreign subsidies. Thus, in effect, these duties attempt to remedy market distortions generated by foreign subsidies by further distorting market mechanisms. On March 11, 2021, the U.S. International Trade Commission issued duties ranging between 19.97% and 47.05% on Moroccan phosphate imports upon finding that Moroccan exports had been receiving unfair government subsidies. In this research, we estimate the impacts of these duties on U.S. diammonium phosphate and triple superphosphate fertilizers, as well as long‐run downstream prices of five U.S. row crops with the largest phosphate usage. Using these results, we assess the implications for gross receipts in the U.S. fertilizer industry and gross margins for American farmers. We also calculate the implied change in expenditure for agricultural end users. We find that the countervailing duties have increased U.S. phosphate fertilizer prices by approximately 34% over counterfactual levels. This corresponds to an expected downstream price response ranging from around 10% for corn, cotton, and sorghum to between 1% and 4% for soybeans and wheat. This market distortion generates a $23 billion increase in gross receipts for a concentrated domestic fertilizer industry while shrinking gross margins for American farmers by 2% and 8% and increasing agricultural user expenditures by approximately $10.84 billion.

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“…The reasons for this development are unclear. All food producers face rising energy prices and pass these costs on to consumers (Bekkerman et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

The development of the profitability of agricultural enterprises and its causes

Kopta,

Lososová

International Scientific Conference INPROFORUM

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The article presents the results of the development of the profitability of agricultural enterprises in the years 2017-2022. The results are compared with the sectors: Food Production and Food Retail. The Albertina database was used. The profitability of agricultural enterprises is significantly below average (roughly half) compared to other sectors. Intercompany volatility is also lower. On the other hand, year-on-year volatility (volatility over time) is higher. The year 2022 is characterized by high inflation and a significant increase in profitability in all sectors. The causes of change in profitability (ROA) were analyzed. Logarithmic and exponential decomposition methods were used. The reasons for the difference in profitability are different. There was a sharp increase in sales in all sectors. In the Agriculture sector, material costs grew faster than sales. Higher profitability is achieved due to depreciation (which remained fixed as sales increased), especially labor costs (which grew significantly slower than sales). In the food production sector, depreciation significantly impacts profitability (they again remained the same despite growing sales). The influence of wages is weaker than in the Agriculture sector. The average salary here more closely followed inflation. In the Food Retail sector, the main reason for the increase in ROA is higher selling prices. Selling prices rose faster than the purchase costs of goods and materials.

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The Impacts of Biofuel Policies on Spatial and Vertical Price Relationships in the US Fertilizer Industry

Cited by 8 publications

References 24 publications

Soil Fertility, Fertilizers, and Crop Nutrition: Past, Present, and Future

Soil Fertility, Fertilizers, and Crop Nutrition: Past, Present, and Future

Impacts of U.S. countervailing duties on phosphate fertilizers

The development of the profitability of agricultural enterprises and its causes

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