Economic Issues in Using FGD By-Product in Agriculture Gypsum Markets
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 2091
Flue gas desulfurization (FGD), can produce gypsum (calcium sulfate) which is potentially useful as a substitute for agricultural and crude gypsum. Moreover, forced oxidation is an advanced method in producing high quality FGD by-product gypsum that competes for use in wallboard and construction. The present paper is an analysis of market forces of demand and supply of agricultural gypsum. The objective is to provide perspective on the potential use in agriculture of the FGD by-product gypsum generated from coal combustion. The result of the econometric analysis shows that demand for agricultural gypsum is inelastic (0.013) indicating a relatively stable demand. A 1 percent change in agricultural gypsum price hardly affects its demand by farmers (0.013 percent change). On the other hand, supply of agricultural gypsum proves to be elastic and positively related to its price. FGD by-product gypsum would be entering a highly competitive market. Its use in agriculture would increase agricultural gypsum supplies, lower agricultural gypsum price, but have little effect on agricultural gypsum use. Other uses, such as wallboard and construction, likely offer more promising market potential than does agriculture.