Price Factors i Consu B. T. §HAW AND F. W. PARKER
MORDECAI J. B. EZEKIEL
Bureau of Plant Industry, U . S . Department of Agriculture, Beltsville, Md.
Bureau of Agricultural Economics, of Agriculture, Washington, D. C .
U. S . Department
A
A n analysis is presented of United States fertilizer M E R I C A N farmers Substituting the average statistics for the years 1925 to 1941, relative to the inand the fertilizer and retail price of a ton of fertifluence of plant-food prices on the utilization of plant lizer in Equation 1, the tonnitrogen industries are interfood in agriculture. The analysis indicates that the ested in the problems mnage of fertilizers that would percentage nitrogen in fertilizers is a function of the have been sold under the msociated with the utilization ratio, Nm;ce/(PtOb KtO)pnc.. Also, the proportions of of the Nation's expanded sumed conditions can be organic and chemical nitrogen used are related to organic synthetic ammonia fixedeasily determined. Since the and chemical nitrogen prices. Furthermore, the pernitrogen capacity. Three composition of the fertilizer is centage PzO, in fertilizers can be determined from the questions usually arise in a known, the quantities of ninitrogen percentage and the ratio, N ~ o s / ( P g O & i c s . discussion of the subject. trogen, phosphoric acid, and The relations presented describe the way in which farmers potash that would have been First, what is the probable and the fertilizer manufacturing industry reaofed to consumed can be determined; postwar price of fertilizer changes in prices during the period considered. The comparing these with actual nitrogen? Second, how much estimates of the prospective reaction to other changes consumption in that year, the fertilizer nitrogen will farmers in prices assume that this behavior pattern continues in use after the war? And third, influence o€ given price the future as it has been during the past. To the extent changes on consumption will how will the expected reduced that new conditions modified the present behavior patbe apparent. price of nitrogen affect the use terns, the actual behavior may differ somewhat from that Four relations must be of phosphoric acid and estimated on the basis of this past experience. established; the influence of potash? It is not the purpose of this paper to give specific wholesale prices of plant food answers to these auestions. on the total Dlant-food content of fertilizers, the influence of prices on the percentage of but certain relations between plant-food prices and consumption nitrogen in fertilizers, the influence of prices on the percentage will be presented. Two general principles are now well established and these will of phosphoric acid in fertilizers, and the influence of prices on be used in this paper without further discussion: the percentage of potash in fertilizers. It is obvious that these four relations are not independent. The determination of any 1. Farmers in the United States spend a definite percenta e three establishes the fourth. The first three will be examined, of income for fertilizers, regardless of plant-food price?. and finally the effect of certain assumed price changes will be Hence, with income constant as the retail prices o fertilizers fall the quantities purchased rise in inverse proportion. The evaluated. First, however, the data on which the developments f e r h a e r tonnage purchased by farmers in any year may be deterare made will be examined. mined by Equation 1:
+
(8.
Fertilizer tonnage =
IC (farm income in dollars) _._____
.
av. retail price per ton in dollars
WHOLESALE AND RETAIL PRICES
Wholesale prices of fertilizer materials for the years 1925 to 1941 are given in Table I. Interpretations based on this table are subject to the limitations of the data. An average price for a
(1)
The value of IC depends upon the particular expression of farm income used. According to Mehring and Shaw, if previous year's total cash income is used, k = 0.0268 0.0004. 2. The retail price of a ton of fertilizer in any year tends to be the wholesale cost of the plant food contained plus a uniform amount per ton to cover the cost of trans ortation, processing, snd distribution (3). For example, the diierence in retail price between a ton of 2-12-6 and a ton of 3-18-9 in any year is nearly equal to the wholesale cost of one unit of nitrogen, six units of phosphoric acid, and three units of potash. Thus, any change in the wholesale price of nitrogen, phosphoric acid, or potash will be wholly reflected in the retail price of a ton of fertilizer.
TABLD I. WHOLDGALE PRrcns OF FERTILIZER MATERIALSPEB UNIT Or:
Chem. ganic NE N*
PpO, as Superphosphates
KzOas Muriate*
All Plant Food0
All
NC
PsOr
+
K;Oa 1926 $2.77 $4.48 $0.00 $0.58 $1.18 $3.19 $0.693 1920 2.00 4.02 0.00 1.15 0.00 3.00 0,000 1927 2.47 5.13 0.54 0.05 1.16 3.07 0.671 1928 2.41 0.58 1.18 0.05 0.67 3.02 0.000 1929 2.18 5.00 0.01 0.07 1.10 2.02 0.628 1930 2.00 4.48 0.54 0.08 1.03 2.38 0.582 1931 1.72 2.84 0.49 0.68 0.90 1.94 0.548 1932 1.27 1.04 0.46 0.08 0.75 1.30 0.530 1933 1.25 2.43 0.43 0.00 0.78 1.47 0,504 1934 1.30 3.08 0.49 0.49 0.78 1.09 0.490 1935 1.25 3.32 0.49 0.42 0.76 1.00 0.408 1930 1.30 3.00 0.48 0.79 1.70 0.472 0.40 1937 1.39 4.41 0.61 0.51 0.83 1.70 0.510 1938 1.44 3.45 0.49 0.52 0.81 1.70 0.500 1939 1.41 4.07 0.48 0.62 0.82 1.74 0.494 1940 1.44 3.90 0.62 0.52 0.83 1.72 0.620 0.55 0.90 1.87 0.538 1941 1.55 4.45 0.52 Calculated from index price, Bslter Crops with Plant Food, Feb., 1944. b From Better Crops with Plant Food, Feb., 1944. 0 Calculated from data in table and compaeition of avera e ton of fert i h e r , Agr. Statistics 1943. Percentage organio nitrogen t',cm MeMng and Vincent, U. S. D. A. Circ. 689. Year
Proceeding from the above .principles, the problem of determining the influence of wholesale prices of nitrogen, phosphoric mid, and potash on the consumption of these materials in fertilizem is resolved into finding the effect of wholesale prices on the average analysis and total plant-food content of fertilizers. If the composition and total plant-food content of fertilizers are known, the cost of the materiale in the average ton of fertilizer can be determined for any assumed set of prices. This cost, added to the average processing and distribution cost per ton found for a given year, will give the average retail price of a ton of fertilizer that would have prevailed in that year under the assumed prices. 282
INDUSTRIAL A N D ENGINEERING CHEMISTRY
March, 1945
8
i
I
I in overoqe ton of fertilizer
0
283
The wholesale cost of materials in the average ton of fertilizer, the retail price per ton, and the difference between these two (processing and distribution costa) are given in Table I1 for 1925 to 1941. The trends are shown graphically in Figure 1. Retail prices per ton from 1936 to 1939 averaged about 14% lower than in the years 1927 to 1930. Wholesale prices per ton were 25% lower. In both periods compared, the processing and distribution margin remained essentially constant a t 15 dollars per ton. INFLUENCE OF WHOLESALE PRICES ON NITROGEN CONTENT
As previously indicated, the wholesale price of fertilizer materials has shifted materially during the last twenty years. The greatest lasting change has been in the cost of chemical nitrogen. Fertilizer consumption statistics for 1925 to 1941 are given in Table 111. It is apparent that the proportion of nitrogen in fertilizers has also changed. Tables I and I11 may be used to compare the changes in nitrogen prices with the quantities of nitrogen used in fertilizers. Year
given plant food should represent a weighted average in which consideration has been given to the amount and price of each form of the plant food used. This average price should be determined separately for each year. Actually, only the major forms of nitrogen are included in the p r i m presented in Table I, and the weightings have not been revised very often. I n the cam of organios, at least one important material is not included in the data. Potash prices, if properly weighted, would include potassium sulfate and manure salts aa well aa muriate. The PBOS figures should include double superphosphate and any other sources of PdS. The superphosphate prices are for Baltimore, and obviously the wholesale price at other points, especially interior points, would be materially different. Nevertheless, the values given in Table I undoubtedly reflect price changes in competitive materials, and further refinement ia not likely to change the data or the interpretations from them materially. All fertilizer ingredients, organic nitrogen materials excepted, have declined in price during the last twenty years. Taking the 1925 prices as a basis, chemical nitrogen waa 48% lower in 1940 than in 1925; phosphoric acid from superphosphate was 13% lower, and potash from muriate was 10% lower. With these decreases in all components, the composite retail price per unit of plant food (1) fell 33% from 1925 to 1940-a sizable decline as compared to changes in wholesale prices of fertilizer materials.
TABLE 11. -TAIL h C E , WEOLESAm COST OF MA~RIAIB, PROCESSING AND DISTRIBUTION COSTSOF AN AVERAGE TON OF FERTILIZEB?
AND
Wholasale Prooesling and Ret+> Prim P a d by Cost of Distribution Year Farmem (a) Materiabb Cost. 1925 $38.80 $19.60 $18.70 19.m 17.07 1926 a6.60 19.81 14.98 34.80 1927 16.09 36.90 lSZ8 20.81 14.94 1929 19.76 34.70 18.69 16.21 33.80 1930 16.35 13.65 29.90 1931 1932 13,36 12 36 2S.70 1933 13.70 23.80 10.10 1934 14.43 28.20 13 * 77 14.13 28.60 14.37 1936 I936 14.89 30.10 16.21 14.93 30.80 1937 16.87 14.61 30.20 1938 15.69 1939 16.88 14.62 80.60 1940 13.72 30.30 16.68 -31.70 1941 13.71 17.89 Transportation, procaeaing and dbtribution cost. inolude freight on materiala (ruperphwphate. podah, and nitrogen) from port. to interior plant., or, in the ome of euperphosphrte. higher production owt. bt interior Elan@ due to the freight on rock and eulfur; themfore, t h e ftgurss are a ttle bigher than thwe whinh may be calculated from retail price rohadulsr. b From data in Table I, footnote@. I
PLANT-FOOD C o m m AND TONNAGE OF TABLE 111. AVERAGE COMMERCIAL FERTILIZERE CONSUBIED IN THE UNITEDSTATIW. %N
% PIOl % KaO Tonnage 9.12 9.32 9.43 9.46 9.43 9.41 9.34 9.01 9.07 9.12 9.18 9.19 9.25 9.23 9.17 9.30 9.25 0 Includea Hawaii. and Puerto Rim: eroludee phosphaten distributed by government agenciw. Dats taken from Agr. Statistics, 1942 and 1848. Year
TABLE IV. NITROGEN AND OTHERPLANT FOOD IN RELATION TO PLANT-FOOD PRICES* NP 100 N Year (Ptoi Xi0)p (PIOI XaO) 1926 6.22 28.8 6.22 30.1 1927 1928 6.17 30.9 1929 4.67 31.6 4.13 32.8 1930 33.3 1931 3.82 1982 3.06 35.3 1833 2.73 34.9 3.19 1934 34.8 1936 3.44 34.4 3.62 1936 34.8 1937 3.62 34.6 1938 3.42 34.8 1939 3.46 34.9 3.41 1940 36.3 1941 3.39 36.4 a Two-year average prim wed. * Calculated from Equation 2.
+
+
100 N* (Pa01 KYO)
+
Differenoe
.-
A considerable portion of the fertilizer materials sold to farmers in mixed fertilisers in a given year is bought by manufaoturers under 12-month contracts at prices prevailing when the contract is made. Thus, it would be expected that prices of both the previous year and the current year would be effective in determining the composition of the fertilizer. The ratio of nitrogen price (two-year average) to other plant-food price (two-year average) is given in Table IV, along with the ratio of nitrogen consumption to other plant-food consumption for the years 1926 to 1941. These ratios are compared graphically in Figure 2. From the nature of the ratios it would be expected that their relation could be expreased by an equation of the type, y = ax"
since, as the ratio plotted as abscim approaches zero, the ratio plotted aa ordirurta should spproaoh infinity as a W t u
INDUSTRIAL AND ENGINEERING CHEMISTRY
284
vice versa. Thesc contlitions have been imposed upon the curve drawn. The theoretical d a t i o n is:
loo' = 54.1 P2O6 Kz0 where p = price
+
[ +
The calculated value of 100 N/(Pz05 KZO) is given in Table IV for comparison with the reported value. The data fit the theoretical relation reasonably well. From Equation 2,
P206
N P205
+ K2O + 1 = 0.541 PaOs + K2O -
+ KaO
+
+ KzO)~
]-0*s6
z fi
+1
factors affect the relation also. For example, processing and distribution costs were relatively high in both 1926 and 1928, yet one of thesc years falls below the curve in Figure 3 while the other falls above. Also, 1931 fits the curve and in that year processing and distribution costs were low. Table I11 suggests that fertilizer tonnage may help to explain these variations. A priori, it would appear that low tonnage would work against factors tending to increase nitrogen in fertilizers. (Low tonnage means low farm incomes, and it would be expected that farmers would shift to lower-nitrogen mixed fertilizers and even to superphosphate, chiefly because these sell at lower ton prices; by buying them, fertilizer r@tesper acre could be kept more nearly up to standard.) On the other hand, low processing and distribution costs would work with these factors. If this reasoning is sound, all years could be adjusted to a comparable basis by introducing a factor into Equation 3 of the type:
r
(tonnage in base year \tonnage in given year) processing and distribution costs in base year processing and distribution costs in given year
-
P z O ~ KzO
Vol. 37, No. 3
ln
As was true with prices, it would be expected that a better factor would be obtained if averages of previous and present year's values were used. The factor for Equation 4, henceforth identified rn (ton/P.D.)", was evaluated for the data at hand according to the relation: (Ton/P.D.)" =
r
100
ln
and numerical values for (Ton /P.D.) are given in Table V. Returning to Equation 2, we may place
it follows, then, that
N
(av. 1936-37 tonnage) \ 2-yr. av. tonnage ) av. 1936-37 processing and distributing costs 2-yr. av. processing and distribution costs
N
10,000
+ Pz06+ K 2 0 = 100 - 54.1 [(pz05N;Ka0),l-0~s65 + loo ~
(3) Equation 3 expresses nitrogen as a percentage of the total plant food in terms of nitrogen and other, plant-food prices. This relation is shown graphically in Figure 3. The reported data are plotted also for comparison. The relation is almost perfect for ten of the sixteen years and is reasonably good for all years. Comparison of Figure 3 with Figure 1 shows that the years in which the processing and distribution costs were reasonably constant (1927, 29, 30, 36, 37, 38, 39) fit Equation 3 remarkably well. This suggests that the relation could be improved by introducing processing and distribution costs into the equation. It is obvious, however, that other
The best values of a, n, and m in Equation 6 may be determined as closely as desired by graphical analysis using logarithmic coordingtes and trial values of n, The relation,
+
loo
P z O ~ KzO
= 50.7
[(Pz06+NnKzOL ( T o ~ / P . D . ) O ~ ~ ] -(7)~ ' ~ ~ ~
w8s accepted. Equation 8 may then be' developed from 7 in the same way Equation 3 was developed from 2:
N T.P.F.
-100 =
100 -
[
10,000
(8)
+
50.7 (pzos~ K z O ) (,T O ~ / P . D . ) ~ ~ ~ ] - ~ "100 ~'
TABLE V. NITROGEN CONTENT OF TOTAL PLANT FOOD Year
% N in T.P.F.
Ton P.D.
Eq. 3
Reptd.
1.226 1.127 1.052 0.967 0.930 0.996 1.214 1.141 1.078 1.183 1.120 1.000 0.943 0.973 0.918 0.862
23.1 23.1 23.2 24.0 24.7 25.2 26.7 27.6 26.4 26.9 26.7 25.7 25.9 25.9 26.9 26.0
22.4 23.1 23.6 24.0 24.7 25.3 26.1 25.9 25.8 25.6 25.8 25.7 25.8 25.9 26.1 26.7
Eq. 8 22.9 23.1 23.4 24.3 25.0 25.3 26.9 26.7 26.0 25.2 25.3 25.7 26.1 25.9 26.2 26.6
This relation is shown graphically in Figure 4. The reported data, as a whole, fit this relation somewhat better than they did Equation 3. Considerable improvement was made for 1926, 28, 32, 33, 34, and 41; the fit was slightly poorer for 1929, 30, and 36. The values of percentage nitrogen in the total plant food calculated from Equations 3 and 8 are compared with the reported value in Table V. EFFECT OF ABBUMED PRICECHANGESON PROPORTION OF NITROGEN IN FERTILIZERB. I n 1937 the nitrogen content of the total plant food was 25.7%. The average 1936-37 nitrogen price per unit was $1.73 and the average 1936-37 (PzOs KIO) price was $0.491 per unit. A reduction of 20% in the nitrogen price, other conditions remaining the same, in 1937 would have
+
March, 1945
INDUSTRIAL AND ENGINEERING CHEMISTRY
285 an increase with time, it is e v i d e n t t h a t t h e r e have been disturbing influences. Using the same reasoning aa above, it would appear that fertilizer tonnage and processing and distribution costs would influence the relation between plant-food content of fertilizers and time. If this is true and the relation is linear, aa it appears to be, the two years 1931 and 1937 can be used to determine the linear relation since the (Ton/P.D.) factor is one in both of these years. The relation so determined is T.P.F. = 0.163t+ 17.33 (9)
I
I
I
I
Theoreticol Relationship:
where t = time in years from
1926 This relation is also shown in Figure 5. Introducing the factor (Ton/P.D.)" into Equation 9,
+
T.P.F. = (0.163t 17.33) (Ton/P.D.)* (10) From Equation 10 it follows that
I-
\
Z 24
ze
Figure 3. Relationship between proportion
T.P.F.
log 0.163t f 17.33
of nitrogen in fertilizers and plant food prices 22
2
4
N P&
/(P205+ K20) Price
n log (Ton/P.D.) (11)
+
28
T.P.F. = (0.163t 17.33)/ (Ton/P.D.)OJU (12)
26
This relation is also shown in Figure 5, and the calculated and reported values of total plant-food content of fertilizers are compared in Table VI for 1926 to 26J 5 6 1941. Relation 12 fits the reported data so perfectly in all y e w except 1935 and 1936 as to suggest possible error in the reported data (probably processing and distributing costs) for 1935. (Since two-year averages were used, an error in 1935 would affect both 1935 and 1936.) Even in 1935 and 1936 the calculated and reported values differ by only 1.5% of the reported value. The fact that the total dant-food content of fertilizers can be expressed as a time relation [fertilizer prices exert only a secondary influence in the (Ton/P.D.) factor] suggests that research and education, both agronomic and technological, have played large parts in increasing the total plant food in fertilizers.
(5
?E \
z
6
Since this equation is linear in logarithmic coordinates, n may be evaluated empirically. Relation 10 is found to be
30
a' t'
5
24
221
I
I
2
I
4
N3Price (Ton (PzOs t K20) Price
/ I?
0.)O6
resulted in a nitrogen content in the total plant food of 27.1%, according to Equation 8. Before we can evaluate the effect of this increased proportion of nitrogen on nitrogen consumption, it is necessary to know the influence of price changes on the total plant-food content of fertihers. PUNT-M)OD CONTENT OF FERTILIZERS
TOTAS, CONTBNT. The change in total plant-food content of fertilizers with time is shown in Figure 5. While there has been
Vol. 31, No. 3
INDUSTRIAL AND ENG INEERING CHEMISTRY
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TABLE VI. TOTAL PLANT FOOD AND NITROGENCONTENTB OF FERTILIZERS T.P.F. % N in Fertilisers Calcd." Reptd. Difference Calcd. b Reptd. Difference 3.86 3.80 +0.06 -0.06 16.97 16.91 3.98 -0.03 3.96 17.20 +0.01 17.21 4.11 4.17 -0.06 -0.14 17.69 17.66 4.29 4-0.07 4.36 +0.06 17.89 17.84 4.63 4.47 +0.06 +0.05 18.13 18.08 4.60 -0.04 4.66 +0.01 18.16 18.14 4.66 -0.07 4.59 +0.02 17.87 17.86 4.70 +0.16 4.86 +0.06 18.12 18.17 +0.07 4.81 4.74 18.38 +o.oe 18.47 4.79 -0.16 4.63 -0.29 18.69 18.40 -0.16 4.71 4.87 -0.21 18.88 18 67 4.91 0.00 4.91 19.12 0.00 19.12 +0.06 6.06 5.00 4-0.04 19.37 19.41 5.04 +0.01 6.05 19.44 +O .07 19.61 +0.01 6.19 6.18 -0.03 19.87 19.84 0.00 6.38 6.38 +0.09 20.10 20.19 T.P.F (0.168t 17.33)/(Ton/P.D.)o*'", where t = years from 1926. b By Equation 13.
Year
The P ~ O content S of fertilizers calculated by Equation 15 is compared in Table VI1 with the reported values for 1926 to 1941. In calculating the 9 0 s contents, the nitrogen content used was the calculated value from Equation 13. Thus, the calculated Pro6 contents contain the accumulated errors from Equations 12 and 13, in addition to the errors inherent in relation 15. In only four of the sixteen years did the calculated values differ from the reported by as much as 2% of the reported value. The maximum difference was 3.6% of the reported value in 1935. POTASH CONTENT. The KgO content of fertilizers can now be calculated from Equations 12, 13,and 15. The relation is
I
-
+
TABLE VII. P80sCONTENTOF FERTILIZERS
Nt+
Year (Plod . -..D 6.20 1926 6.37 1927 6.48 1928 4.74 1929 4.36 1930 1 19 1931 3.48 1932 3.16 1933 3.44 1934 3.36 1936 1936 3.40 3.49 1987 3.46 1938 3.67 1939 3.46 1940 3.34 1941 Two-year average priaes. By Equation 16. ~
% ' PsOr in Fertilisers Calcd.. 9.18 9.34 9.58 9.36 9.17 9.24 9.00 8.94 9.10 8.86 8.95 9.14 9.20 9.44 9.39 9.34
Reptd. 9.2 9.48 9.46 9.43 9.41 9.34 9.01 9.07 9.12 9.18 9.19 9.26 9.23 9.17 9.30 9.26
Difference -0.14 -0.09 +O.lP -0.08 -0.24 -0.10 -0.01 -0.13 -0.02 -0.33 -0.24 -0.11 -0.03 +0.27 +0.09 +0.09
kO
T.P.F. (Eq. 12) - N (Eq. 13) - P& (Eq. 15) (16)
The potash contents calculated from relation 16 can be only BS accurate as the separate items in the relation. The calculated and reported values of total plant-food, nitrogen, and P20b contents of fertilizers for 1926 to 1941 are compared in Figure 7. It is obvious that the K t 0 contents calculated from relation 16 are satisfactory. AVERAGE NITROGEN PRICE
It is now possible to evaluate the effect of the average nitrogen price on nitrogen consumption. The average price can be reduced in a number of ways, the most obvious being a reduction in the wholesale cost of all nitrogen materials. A less obvious, but equally real, method would be to reduce the proportion of organic nitrogen used. A third way is to reduce the use of the highest priced forms of chemical nitrogen and increase the use of lower priced forms. Since the proportion of organic nitrogen used is such an important factor in determining the average ni* trogen price, it is worth while to inquire if organic and chemical nitrogen prices have influenced the proportion of organic nitrogen TABLE VIII. PERCENTAGE OF ORGANIC NITROGEN IN FERTILIZ- used. ERS I N RIDLATION TO PIUCES PROPORTION OF ORGANIC NITROGEN.The relation between (O.N.)p* O.N. 0.NJT.N. the ratio of organic nitrogen to chemical nitrogen in fertilizers Year (C.N.). C.N. Reptd. Ca1cd.o Difference and the ratio of their prices (shown graphically in Figure 8) is: 1.6 24.2 26.7 31.9
* 0
160 22.6 23.7 29.0 170 21.3 22.8 29.6 186 16.7 16.3 20.1 229 16.6 15.3 18.6 240 16.6 16.4 18.2 227 19.7 19.9 197 24.8 28.3 34.3 26.6 149 26.2 20.9 26.4 162 17.6 23.0 18.7 216 16.7 14,6 20.0 260 12.9 20.2 16.8 273 12.3 11.4 14.0 299 12.6 12.8 14.7 277 13.4 14.0 12.3 266 11.6 12.3 13.1 281 12.3 10.6 11.9 281 Two-year average prices (previous and present year). By Equation 18.
1.2 -1.6 -0.4 -0.3 1.1 -0.2 2.7 4.3 -1.1 -2.2 -3.9 -0.9 -0.3 1.1 0.7 1.7
NITROGEN CONTENT, Combining Equations 8 and 12, N-
where N = nitrogen content of fertilizers The calculated and reported nitrogen contents are compared in Table VI for the years 1926 to 1941. The agreement is exceptionally good. PHOSPHORIC ACIDCONTENT. The relation between the ratio of nitrogen to P,O&in fertilizers and the ratio of their prices is shown graphically in Figure 6. The average relation is:
from which it follows that PZOScontent of fertilizers is given by ( T O ~ / P . D . ) ~ ~ ~ ] ~ " " (15)
[
loo chem. N = 88,100 100 (chem (or: NN),]-'.' )P
(17)
from which it follows that
This equation gives the percentage organic nitrogen as a function of organic and chemical nitrogen wholesale prices. The percentages of organic nitrogen used, calculated from Equation 18,for the years 1925 to 1941 are compared in Table VI11 with the reported values. The values agree reasonably well. FACTORS IN PLANT-FOOD CONSUMPTION
The effect of assumed changes in plant-food prices and other factors on plant-food consumption will be evaluated by comparing the calculated consumption under the assumed conditions with 1937 Consumption and oonditions aa a base. The coniitions to be assumed are: a 20% reduction in the wholesale price of chemical nitrogen, a 20% reduction in the wholesale price of all nitrogen, a 20% reduction in the wholesale prices of Pzo5 and KSO, a 20% reduction in the wholeaale prices of cheniical nitrogen, PtOs, and KsO, and a 20% reduction in the wholesale price of chemical nitrogen accompanied by a 20% increase in the total plant-food content of fertilizers. I n order that valid comparisons can be made, it is necessary to adjust 1937 conditions to fit equations developed above, since effects of assumed conditions are to be evaluated on the basis of these equations. The reported and adjusted 1937 conditions and consumption and the assumed case of a 20% reduction in chemical nitrogen prices will be given in some detail to illustrate the method of
March, 1945
m
INDUSTRIAL AND ENGINEERING CHEMISTRY calculation. Table IX summarizes these and other assumed cases. (See page 288 for c w s I, 11, and 111.) Cases 4, 5, and 0 in Table IX were included for comparison with the more probable cases, 3 and 7 A 20% reduction in the wholesale price of all nitrogen, case 4, does not increase plantfood consumption above the increase obtained with a 20% decrease in the wholesale price of chemical nitrogen only, case 3. A 20% reduction in the wholesale prices of PpOs and KIO would have almost no influence on t h e consumption of nitrogen and potash, but phosphoric acid oonsump tion would be increased about 11%. Compari¶on of cases 3,6, and 7 shows that an increase of 20y0 in the total plant-food content of fertilizers would increase the plant-food consumption almost as much as that of a zO% reduction in the wholesale prices of all plant food. The probabilities are good that the w u m e d conditions in case 7, a
20.0 Figure
-
287
5. Toto1 Plont-Food Content of Fertilizers
19.0-
0%
Y
ri
0: ct
18.0
-
17.0
-
l&6-
Years
20y0 reduction in the wholesale price of chemical nitrogen and a 20% increase in the plant-food content of fertilizers, can be achieved in the postwar period. The assumed reduction of 20% in the wholesale price of chemical nitrogen, while arbitrary, seems reasonable in view of recent reductions in the price of anhydrous ammonia and ammonia solutions. It should be remembered that the assumed price of chemical nitrogen is the average price, and that this average cin be lowered by using greater quantities of lower priced materials. Increasing the total plant-food content of fertilizers to 2370 is technically feasible and may be achieved by progressive fertilizer grade programs in the several states. The increased consumption of plant food that would have occurred in 1937 under the assumptions of case 7 is equivalent to 1,100,000tons of an 8-6-8 fertilizer. CONCLUSIONS
The relations developed in this paper have been used to estimate the effect of decreaged wholesale prices of plsnt food on plant-food consumption. Using 1937 conditions a basis of comparison, it is indicated that a 20% reduction in the whole-
*
I N D U S T R I A L A N D E N G I N E E R I N G CHEMISTRY
288
Figure 7 , Plont Food Content of Fertilizers. 1926- 1941 I
Voi. 37, No, 3
CASEI. 1937 Prices and Consumption. A . Plant-food cost per ton: 9.25unitsPzOoat $0.51 4.96unitsKaOat 0.51 4.31 unitschem. N at 1.39 0.60 unit org. N at 4.41 19.12 units plant food
-
= $ 4.72 = 2.53 = 5.99 = __ 2.65
$15.89
B . Retail price of average ton of fertilizer: $30.83 (from ?vlehring and Shaw, 1 ) C. Tonnage:
IO.00
5 9.00 V
Fertilizers 8 380 000 Chem$al N '361:OOO Organic N 50,600 Total N 411,600 PlO6 776,100 KzO 415,600
5.00
4.00
CASE11. Adjusted 1937 Conditions. A. Changes from 1937 conditions: 1937
sale rice of chemical nitrogen would have resulted in the following cIanges in plant-food consumption in 1937: % 13.8 21.0
Tons Chemical N
E!K20 %: ?
Increase Decrease Decrease Increase
51,900 9,200 5,700 48,300
0.7 11.3
A 20% reduction in the wholesale price of chemical nitrogen coupled with an increase of 20% in the plant-food content of fertilizers, would have resulted in the following changes in consumption in 1937: Chemical N Or anic N P286
Kz0
Incresse Decrease Increase Increase
TOM
%
92,400 6,600 66,400 92,800
24.6 15.1 8.6 21.8
These increased quantities of plant food, equivalent to 1,100,000 tons of an 86-8 fertilizer, would have been purchased by farmers for the same expenditure for fertilizers as was made in 1937.
Conditions
Organic N, %
Av. N price N content of fertilizer
12.3 $1.76 4.91 19.12 9.25 4.96
%
T.P.F. content of fert'ilizer, % PzOs content of fertilizer K ~ ocontent of fertilizer,'
Adjvged Conditions
(1-Yr. Prices) 1 0 . 4 (Eq.18) (1.70 4 99 Eq 13) 19:12 {Eq: 12) 9.07 (Eq. 16) 6.06 (Eq.16)
B. Plant-food cost per ton: 9.07 units PzOsat $0.51 = $ 4.63 0.51 = 2.58 5.06 units KzO at 4.47unitsrhern.Nat 1.39 = 6.21 0.52 unit org. N at 4.41 = 2 . 2 9 19.12 units plant food $15.71 C. Retail price of average ton of fertilizer:
$30.65 = $30.83
- ($15.89-$15.71)
D. Tonnage (based on $258,355,000 spent for fertilizers):
LITERATURE CITED
(1) Mehring, A. L., and Shaw, B. T., Am. Fertilizer, April, 1944. (2) Mchring, A. L., and Shaw, B. T., U.S. Dept. Agr., Bur. Plant Ind., Plant Food Memo Rept., 7 (March 7, 1944). (3) Vial, E. E., Cornell Univ. BUZZ. 545 (1932); Mehring, A. L., and Deming. L. S., Am. Fertilizer, 85, 9-11 (1936); Ross, W. H., and Mehring, A. L., U.S. Dept. Agr. Yearbook, pp.
522-45 (1938).
CASE111. 20% Reduction in Wholesale Prices of Chemical Nitrogen. A . Calculations: Organic N , % Av. N price per unit T.P.F. content of fertiliner, % N content of fertilizer, % ' PZOScontent of fertilizer, yo Ks0 content of fertilizer, %
7 . 4 (Eq. 18)
B. Plant-food cost per ton: 8.55 units PzOsat $0.51 = $ 4.36 5 35 units KIO at 0.51 = 2.73 4.83 units ohern. N at 1.11 5.36 0 39unitorg. N a t 4.41 = 1.72 19.12 units plant food $14.17
C. Retail price of average ton of fertilizer: $29.11
$30.83
- ($15.89-$14.17)
D. Tonnage (based on $258,355,000 spent for fertilizer) : Tons Fertilizers 8,876,000 Chemical N 428,700 Organic N 34,600 Total N 463,300 P!OS 768,800
Kz0
474,800
yo Increase or Decrehe
+
5.3 +13.8 -21.0 +10.2
- 0.7
+11 3
