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The Economic Benefit of Phosphogypsum Use in Agriculture in the Southeastern United States

01-124-119Final

Summary

Economic welfare analysis was used in this study to estimate the benefit of unrestricted use of phosphogypsum in agnculture in the states of Georgia, Florida and Alabama. An average of nearly 200,000 tons of gypsum are used in agriculture in these three states each year, primarily as a source of calcium for peanut production.

The most important information presented is the survey data on gypsum application zates in Southeastern agIiculture. Forty-six percent of peanut producers in Georgia apply gypsum. Of farmers using gypsum, the average application rate is 879 lb/ac. Assuming a two year peanut rotation, the implied 99th percentile application rate in Georgia is 750 lb/ac. Only seven percent of Alabama farmers surveyed applied gypsum, with the highest observed application rate being 500 Ib/ac, assuming two-year peanut rotation.

Using an assumed $3.00 per ton fall in the price of gypsum if central Florida phosphogypsum were to enter the market, the total annual net benefit from removing the restriction on gypsum use in agriculture is estimated to be nearly $900,000. Of the total annual net benefit approximately $600,000 would be passed on to agricultural producers through lower prices, while reduced storage cost for the industry would be nearly $300,000. The net present value of this annual benefit flow is $17,606,768.