EFFECTS OF NATURAL GAS DECONTROL ON FARMING COSTS AND INCOME

(;tural gas decontrol will likely have only a small effect on agriculture unless accompanied by renewed growth in crude oil prices or fertilizer import restrictions. Rising natural gas prices directly affect agricultural production by increasing costs for crop drying and irrigation. However, the largest effects will occur indirectly through increases in fertilizer prices where natural gas comprises 50 to 60 percent of domestic fertilizer production costs. An economic model of agricultural production is developed where profits are maximized subject to the quantity of a quasi-fixed production factor. Factor demand functions and an aggregate supply function are derived from this simple representation to evaluate alternative gas price impacts. Alternative fertilizer price trajectories are used to simulate effects on inpu demand, production costs, and income for 1981 through 1990.


Issue Date:
1984-01
Publication Type:
Report
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/276831
Language:
English
Total Pages:
24
Series Statement:
AGES831207




 Record created 2018-09-28, last modified 2020-10-28

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)