Description: Job Market Talk: Oranuch Wongpiyabovorn
Location: 368A Heady Hall
Title: "Evolution in the Relationship between Nitrogen Fertilizer and Natural Gas Prices in the United States"
Abstract: The U.S. nitrogen fertilizer industry has experienced several changes over the past two decades, including innovation in natural gas extraction, increasing demand for corn at the global level, and mergers between fertilizer producers. In this paper, I consider three structural changes in the relationship between nitrogen and natural gas prices: (i) October 2006; (ii) in March 2010 and (iii) in October 2016. By estimating the pass-through rates to anhydrous ammonia and granular urea prices, the results show that the changes in Henry Hub natural gas price strongly influence on both ammonia and urea prices during the pre-2010 period. However, the international natural gas price instead plays a dominant role afterward, potentially because of a domestic production capacity constraint. After October 2006, the pass-through of the variation in corn price rises for both cases likely due to increasing demand for fuel ethanol.
Contact: Otavio Bartalotti