;i w 'I il;;; •■ ' . ! ■, ■:..,,, . I;; , : '. z : ..■■'."::.' :■' '. # -i !95 4 S50 \0 ,_ ^ v .... ^ , " './ :. ^ a* .^w- >„ c* w 'YSiaf- ^ a^ .wv >„ «.*" /^skv. * > . . - ,G V V> *'TTT« * A »* V % ^' sx .v jfi°* ~&mr : » ^ '-WSJ*/ .^ '^IB' « f) "* "-BUBS'/ **°* \/ " °°* .V * ^•^ ^ ^ 5* tl o > . <> ••.o» .^ i?**-9 5°^ 'V.^ G" L% ^ c 0> . 6 J^.% "°o j** .»1^% ^ o . . • .G v ^a, *'V7»* A <+ '» • » * .G G° •IfJJjC*. o .^* .Wfcbt* ^ G° V^ 1 6 °/^it. - f 'i*£k \ c^.^t>o S.-£fe:\ c oV .^! % ^ J iv^ C*' ^rv ' ^MH^ • A v *^«. ^0 T ^ 'bV 'AQ^ 'bV •>o' **v*7* A • • • \ » o . . • .G v \5. *«TVT» A <^ ♦ AT %* «> V^'V \^\/ v"V V^-> \ ** A* ••> V » :. ** « • 4 c ,* Y o V jP-X . *. **o« *bt IC 885 ° Bureau of Mines Information Circular/1981 Economic Significance of the Florida Phosphate Industry An Input-Output (I-O) Analysis By Anthony M. Opyrchal and Kung-Lee Wang UNITED STATES DEPARTMENT OF THE INTERIOR °U rut^ ^ - o used as a phosphate in- termediate, is a concentrated phosphoric acid produced from either the wet process or from furnace orthophosphoric acid. Water is evaporated to produce the super acid. Elemental phosphorus is produced by smelting phosphate rock with coke and quartz in electric furnaces. This smelting operation also produces ferrophosphorus, carbon monoxide, and cal- cium silicate. About 50 percent of the elemental phosphorus produced is used to produce sodium phosphate detergents. Also produced from phosphate rock are animal-feed-grade phosphates. Phosphate rock is used to produce low-fluorine mineral supplements for livestock and poultry feed. Defluor- ination, which is necessary because fluorine is toxic to ani- mals, is accomplished by adding defluorinating agents such as phosphoric acid and soda compounds in controlled amounts to phosphate rock and calcining the mixture at high temper- atures. Defluorinated phosphoric acid is reacted with lime to produce dicalcium phosphates. Fluorine and its related products are byproducts of the Florida phosphate industry. One of these, hydrofluosilicic acid, is used to treat drinking water and is also converted into a synthetic cryolite. Current Supply and Demand for Phosphate Products The elements of supply and demand for the U.S. phosphate industry during 1977 and 1978 are shown in table 2. Figure 2 is a detailed flowsheet of U.S. demand for 1977. In recent years the United States has furnished more than 40 percent of the world's supply of phosphate rock, and most of the U.S. production has come from Florida. The United States is self- sufficient in phosphorus and imports less than 1 million tons Table 2.— Phosphate rock and coproducts supply and demand quantities, 1977-78 (Thousand metric tons and percent) 1977 1978 Tonnage Share Tonnage Share World production: United States 47,256 68,692 40.8 59.2 50,037 74,963 40.0 Rest of world 60.0 Total 115,948 100.0 125,000 100.0 U.S. supply components: Domestic mines Imports Industry stocks, Jan. 1 47,256 158 13,777 77.2 .3 22.5 50,037 908 13,818 77.3 1.4 21.3 Total U.S. supply 61,191 100.0 64,763 100.0 Distribution of U.S. supply: Industry stocks, Dec. 31 ... Exports 1 U.S. demand Apparent supply deficit 2 ... 13,818 13,230 34,365 -222 22.6 21.6 56.2 -.4 15,081 12,870 36,812 23.3 19.9 56.8 Total 61,191 100.0 64,763 100.0 U.S. demand components: Fertilizer Detergents Animal feeds 30,262 1,760 601 285 1,457 88.1 5.1 1.8 .8 4.2 31 ,958 2,185 700 368 1,601 86.8 5.9 1 9 Food products 1.0 Other 4.4 Total U.S. primary demand 34,365 100.0 36,812 100.0 1 Exports reported by companies to the Bureau of Mines. 2 Difference between distribution of U.S. supply and total U.S. supply. per year. The historical trend in phosphorus applications and demand has been stable, but there are some indications that there is a shift towards exporting higher value processed phosphate products rather than untreated phosphate rock. In 1 977 the largest domestic end use of phosphate prod- ucts was for agriculture, which accounted for 88 percent of U.S. consumption. The chief agricultural product was inter- mediate phosphoric aid, which comprised 79 percent of the total demand for phosphate rock in 1977. Phosphoric acid was used to produce diammonium phosphate, triple super- phosphate, and, after defluorination, dicalcium phosphate. Only 1 1 .9 percent of U.S. phosphate consumption went to industrial applications, and nearly all of this consumption was as elemental phosphorus. About 5 percent of the industrial consumption was used in making detergents. Elemental phosphorus was also used to produce furnace phosphoric acid, from which a variety of sodium, calcium, and potassium phosphates were manufactured. Environmental Considerations Environmental problems associated with the phosphate industry include concerns about excessive water consump- tion and power demands, the effects of radiation, water and air quality, and the adequacy of land reclamation programs. In a recent Bureau contract report (38), 3 an attempt was made to quantify the environmental sensitivity of future phosphate resource development in Florida. The report identifies Flor- ida's present and future phosphate resources and also iden- tifies those phosphate resources which may be of special concern because of inadequate water supply, radiation, or the potential for wetlands disturbance. The report evaluates the phosphate resource potential of Florida on a deposit-by- deposit basis, identifying areas of land, water, vegetation, wildlife, etc. For each deposit, the report includes an evalu- ation of the overall environmental sensitivity to phosphate mining with respect to both shot- and long-term effects. It is emphasized that this study is intended to outline the direct economic benefits of the Florida phosphate industry and is not intended to identify environmental costs. In this study, no estimates are made of the economic costs of the industry's current or potential environmental problems. 1 Underlined numbers in parentheses refer to items in the Bibliography pre- ceding the appendixes. U.S. DEMAND (34,207) 100% ' ' INDUSTRIAL (4,084) 11. 9% 1 ' ' PHOSPHORU S ELEMENTAL PHOSPHORUS (180) (3,904) 0.5% 11. 4% i DETERGENTS 1 OTHER (1,750) (2,154) 5.1% 6.3% AGRICULTURE (30,123) 88.1% PHOSPHORIC ACID TRIPLE NORMAL OTHER (27,024) SUPERPHOSPHATE SUPERPHOSPHATE (334) 79.0% (1,852) (913) 1.0% 5.4% 2.7% Figure 2.— Domestic marketable phosphate rock distribution pattern, 1977, in thousand metric tons. ECONOMIC BASE STUDIES OF TWO FLORIDA REGIONS This section seeks to quantify direct and indirect employ- ment and income impacts of the Florida phosphate industry on two small regional economies. The localized regions of impact are identified, a survey of economic base theory is presented, and statistics generated by application of the the- ory to the phosphate industry are provided. Identification of the Impact Regions The Florida phosphate industry is concentrated in a rela- tively small geographical area. In 1978 phosphate rock was mined in only four Florida counties. Most of this mining was in Polk County in central Florida, and lesser amounts were mined in Hardee and Hillsborough Counties, also in central Florida, and Hamilton County in northern Florida. In 1978 Polk and Hillsborough Counties accounted for 90 percent of Florida's phosphate employment. The primary objective of this economic base study was to identify as precisely as possible the regions in which the greatest expenditures attributable to the phosphate industry were made. Two Florida regions were so identified, the cen- tral Florida region, which includes Polk and Hillsborough Counties, and the northern Florida region, which includes Hamilton and Columbia Counties. In the central Florida region, a preponderance of the local indirect income and expenditures flowing from phosphate in- dustry employment in central Florida was generated within Polk and Hillsborough Counties, where most workers em- ployed locally by the industry reside. Large metropolitan areas within these counties provide support goods and services to employees. The mining currently taking place in Hardee County is from a deposit in Polk County that extends over the county line, and most of the income from this mining remains in Polk County. The situation in the northern Florida region is somewhat different. A large number of the mining and processing em- ployees at the Hamilton County operation live in adjoining Columbia County. Therefore, the impact of the industry is spread across both counties. Both counties are predomi- nantly agricultural; the phosphate industry is the only major industrial enterprise. A second objective of this economic base study was to gage the impact of the Florida phosphate industry with re- spect to the entire State of Florida. Although the greatest impact is localized within the two phosphate regions, there are some ripple effects throughout the Florida economy. This is because the local goods and services suppliers in the two regions rely on other Florida counties and cities for some of their resources. The State of Florida itself can be viewed as a region and is treated as such in a subsequent section of this study. Most of the phosphate rock and derivative products pro- duced from Florida deposits is shipped to other States and to foreign nations. The two regions under analysis, central Florida and northern Florida, can be considered subregions of the United States in terms of this economic activity. There- fore, the economic impact variables used in this study utilize the rest of the United States as the base region to which these two subregions transfer goods and services. The phos- phate industry does not transfer services, but the services are embodied in the goods. The Economic Base Model The intention of an economic base study is to provide the most accurate description possible of the sources and levels of income and employment in a region by identifying particular key economic activities. Such a study hypothesizes that the key economic activities of a region — those that direct and determine the development of the region — are the activities of the industries, firms, and individuals that serve markets outside the region. All other industries, firms, and individuals of the local economy are categorized as those which serve markets within the region. The theory is closely related to the theory of foreign trade impact on the domestic economy. Goods and services sold outside the boundaries of a region are defined as interregional transfers out (ITO's). The re- mainder of goods and services goes to the local market, which is defined as all areas within the geographic region under analysis. The local market may include a State, a county, a city, or any other designated market area. In this economic base study, the local regions are the central Florida and the northern Florida region. An ITO industry is an industry that produces an amount of output greater than that which can be consumed in the local market area. The ITO market, which is made up of ITO in- dustries, is similar in concept to an export market, except that ITO's refer to transfers from one region in a country to another region within the same country. The extra output of the ITO market is transferred or sold outside the region or local market area. Both the employment and income of the regions are af- fected by ITO markets, the driving force of local economies. Employment offering services to the ITO markets is termed basic, while employment serving the local market is consid- ered nonbasic. Employment by an industry or a firm within an industry is often divided between the basic and nonbasic categories in an economic base analysis. Basic (ITO) em- ployment plus nonbasic (local) employment, when summed for all industries, equals the total employment of the region. The first step in identifying the impact of changes in the basic sector on the local economy is to allocate the units of measure (either employment or income) to the proper sec- tors. This can be accomplished by direct measurements through a comprehensive survey of all firms, but in actual practice, the survey procedure is almost always bypassed because of its prohibitive cost. A more widely accepted alternative is to measure the ITO industries indirectly, using location quo- tients. Employment is used as the unit of measure for most indirect measurement methods, but in this study both em- ployment and income measures are used. An explanation of location quotients and a concept similar to ITO employment appears in reference 16. Location quo- tients and multipliers have been estimated in terms of em- ployment and income for each of the defined regions. The chief interest in this section is the direct and indirect em- ployment and income effects of changes in output in the Florida phosphate industry. Table 3.— Major specialized industries in Florida and average weekly wages, 1975 SIC 1 Employment location quotient Average weekly wage Industry Florida United States Building construction; general contractor and operative builders 2 Lumber and other building materials dealers Loan correspondents and brokers Office of chiropractors 15 521 616 804 147 569 286 071 736 012 287 09 794-799 073 NAp 15.44 13.08 8.89 6.89 5.96 5.84 5.59 5.30 4.58 3.72 3.66 3.23 3.12 3.06 NAp $202 174 235 166 230 115 253 171 91 192 241 173 133 133 166 $254 193 246 96 Chemical and fertilizer mineral mining Miscellaneous apparel and accessory stores Gum and wood chemicals 252 104 220 Agricultural services, except animal husbandry and horticultural services Private employment agencies 148 120 Fruit, tree nut, and vegetable farms Agricultural chemicals . 165 206 Fishing, hunting, and trapping 2 263 Commercial sports and miscellaneous amusement and recreational services 2 128 Horticultural services _ _ 164 All industry 183 NAp Not applicable. 1 Standard Industrial Classification. 2 These SIC's are aggregated at higher than three-digit levels. Source: Florida State University (study done under contract to the Bureau of Mines) (6). Data Base Sources Because of the availability of comprehensive data at the three-digit Standard Industrial Classification (SIC) 4 working level, employment and income data for 1975 were used for the economic base model estimates. The national data are from the Bureau of Labor Statistics (BLS), U.S. Department of Labor. The income figures are wage and salary estimates based on first-quarter 1975 data, and the employment figures are annualized averages. Florida employment and payroll data were provided by State government sources. The State wage and salary figures are those reported for the whole 4 A classification described in the Standard Industrial Classification Manual, 1972, published by the Executive Office of the President, Office of Man- agement and Budget. year. The obtained data provide a basis for comparability between SIC industries in the Nation, the State, and the coun- ties, in most cases. Location quotients for the central Florida and northern Flor- ida regions were computed using the procedure described in reference 16. One set of quotients is based on employment data; the other is based on industry wages and salaries. Both types of quotients are derived from three-digit SIC industries, with some exceptions. Table 3 shows the leading specialized industries in Florida, based on the location quotient method. Industries that had an employment location quotient greater than 3.00 and a minimum of 1,000 workers employed during the year are listed. (An employment location quotient greater than 3.00 generally identifies an industry that has strength and potential for further development within the region.) These basic in- dustries, which serve markets outside Florida, include two Table 4.— Employment in major specialized industries in countries of study area, 1975 Industry SIC Employment location quotient Polk Hamilton Hills- borough Columbia Chemical and fertilizer mineral mining Agricultural chemicals Agricultural services, except animal husbandry and horticultural services Building construction; general contractor and operative builders Lumber and other building materials dealers ... Fruit, tree nut, and vegetable farms Commercial sports and miscellaneous amusement and recreational services Offices of chiropractors Horticultural services Miscellaneous apparel and accessory stores .. Private employment agencies Loan correspondents and brokers .._ Gum and wood chemicals Fishing, hunting, and trapping 3 147 287 071 15 521 012 794-799 804 073 569 736 616 286 09 161.70 35.69 26.54 25.27 24.00 14.55 7.57 6.49 2.63 2.02 1.93 1.11 NAp NAp 220.08 2 225.80 2 NAp 10.20 10.24 NAp 7.04 8.87 7.70 NAp NAp NAp NAp NAp 3.83 14.46 4.24 17.48 8.50 2.84 12.66 6.77 2.40 6.95 9.95 5.09 NAp 4.39 NAp NAp NAp 41.39 NAp NAp 5.06 NAp NAp NAp NAp NAp NAp NAp NAp Not applicable. 1 Standard Industrial Classification. 1 Florida State University location quotients adjusted by the Bureau of Mines. 3 These SIC's are aggregated at higher than three-digit levels. Source: Florida State University (study done under contract to the Bureau of Mines) (6). that are largely comprised of phosphate industry activities — chemical and fertilizer mineral mining (SIC 147) and agri- cultural chemicals (SIC 287). Chemical and fertilizer mineral mining ranks sixth among ITO industries in Florida, and ag- ricultural chemicals processing ranks tenth. This analysis leads to three major conclusions: 1. Phosphate rock mining and agricultural chemicals pro- duction are among Florida's leading ITO industries (as de- fined by location quotients). 2. In pure economic terms, the phosphate industry repre- sents a growth leader for the State of Florida. 3. Without the phosphate industry, a major economic ca- talyst would be lost. Average weekly wages and salaries for Florida's and the Nation's specialized industries are also reported in table 3. Average U.S. wages were about 10 percent higher than the Florida average; but for agricultural chemicals, which ac- counted for 41 percent of all 1976 phosphate industry em- ployment in Florida, average wages were 17 percent higher in Florida than the nationwide average. However, the national wage differential in chemical and fertilizer mineral mining (SIC 147) was about equal to the Florida average difference. In 8 of the 14 leading Florida ITO industries, the national average wage was higher than the Florida average. The major specialized industries in the study regions are listed for 1975 in table 4. Although Polk County has a diverse industrial base, chemical and fertilizer mineral mining (SIC 147), with a location quotient (LQ) of 161.70, is by far its leading ITO industry. Agricultural chemicals (SIC 287), with an LQ of 35.69, is the second leading basic industry in Polk County and also in Hillsborough County. However, chemical and fertilizer mineral mining is relatively insignificant in Hills- borough County. In Hamilton County the leading ITO industries are chemical and fertilizer mineral mining, with an LQ of 220.08, and ag- ricultural chemicals production, with an LQ of 225.80. Ham- ilton County's other industries include those that service the phosphate industry, and a few other industries such as build- ing construction, lumber, and other building materials dealers. Neighboring Columbia County, like Hamilton County, is not significantly industrialized; building construction is its leading ITO industry. Even though Columbia County's economic ac- tivity is influenced by the phosphate industry in Hamilton County, there is no phosphate mining or agricultural chemical pro- duction in the county. From table 4 it can be seen that the phosphate industry (SIC 147) leads Polk County's ITO industries in employment, even though the county has an otherwise diverse industrial base. In Hamilton County, however, it is the lack of industrial diversity that makes the phosphate industry the leading ITO employer. Regional Impact Multipliers Regional impact multipliers are the ratio of total income to basic income, or of change in total income to change in basic income. Employment is also used to estimate these multi- pliers. Regional impact multipliers are used to make projec- tions of future levels of income and employment. Regional impact multipliers were computed in conformity with the economic base theory described in reference 16. First, the location quotients were used to identify the basic (ITO) and nonbasic (local support) industries. Second, the total wages and salaries paid by each ITO industry were estimated. This procedure was repeated for each industry, Table 5. — Wages and salaries and income multipliers for all Florida industries, 1975 Central Florida Northern Florida Nonbasic wages and salaries. ..millions Basic income do $1,893.8 $929.3 $60.4 $37.5 Total wages and salaries Regional income multiplier _do_ $2,823.1 '3.04 $97.9 1 2.61 1 These income multipliers are based on location quotients calculated by Flor- ida State University as part of a study done under contract to the Bureau of Mines (6). Source: Various Florida State government agencies. and the total wages and salaries of all industries — both IIU and local — were summed. The ratio of total regional income to ITO income was the income multiplier. The technique used to derive regional employment multipliers was the same. Such estimates can be made for any region for both types of mul- tipliers; in this case, the selected regions were central and northern Florida. The multipliers used were the average mul- tipliers for all the industries in the region, and not just those of the phosphate industry. The location quotients in tables 3 and 4 show that the Florida phosphate industry was a major ITO industry in both regions in terms of both employment and income. Income multipliers for the two regions were derived by summing the total wages and salaries table 5 and determining the ratio of the regions' total wages and salaries to their ITO (basic) incomes for 1975, the most recent year for which income data were readily available. The resultant income multipliers were 3.04 for central Florida and 2.61 for northern Florida. These multipliers were averages for all industries in the study areas. An industry's direct impact is the wages, salaries, and employment that it generates. Estimated payroll, or income, data for the Florida phosphate industry are given by region in table 6 for 1977. Nearly all of the total payroll of more than $153 million was divided equally between phosphate rock mining (SIC 1475) and phosphate fertilizer production (SIC 2874); a small amount also came from the production of industrial inorganic chemicals, including elemental phospho- rus (SIC 2819). Less than 3 percent of this total payroll was earned outside the two study regions. Each industry also has an indirect impact which stems from certain basic needs that are shared by all of the industry's employees. These needs include food, clothing, shelter, and other goods and services provided by the local support econ- omy. In this study, local support for the primary industry is viewed as the industry's indirect impact; it is equal to the direct income (or employment) multiplied by the value of the income (or employment) multiplier, less the total direct in- come (or employment). Multiplying the regional phosphate industry wages and salaries (table 6) by the income multi- Table 6.— Estimated regional wages and salaries 1 in Florida phosphate industries, 1977 (Millions) Central Florida Northern Florida Phosphate rock mining Industrial chemicals $68.2 1.7 67.9 $7.6 NAp Phosphate fertilizers 8.0 Total 137.8 15.6 NAp Not applicable. 1 Rounded to nearest thousand dollars. 10 Table 7.— Impact of the Florida phosphate industry on local regional wages and salaries, 1977 1 (Millions) Central Florida Northern Florida Direct Regional indirect . $137.8 281.1 $15.6 25.1 Total 418.9 40.7 1 Based on Florida State Department of Commerce wage and employment data, Florida Phosphate Council employment data, and income multipliers calculated by Florida State University. Table 9.— Distribution of employment within the Florida phosphate industry, 1977 Central Florida 1 Northern Florida 1 Phosphate rock mining Industrial chemicals 5,300 200 5,100 585 NAp Phosphate fertilizers 615 Total 10,600 1,200 NAp Not applicable. 1 Rounded numbers. Source: State of Florida employment statistics, including unpublished data; and individual Florida phosphate companies. pliers (table 5) shows that the phosphate industry generated a total direct and indirect impact of $418.9 million in central Florida and more than $40.7 million in northern Florida (table 7). Employment multipliers for the two regions were deter- mined by summing total employment in each region and com- puting the ratio of total employment to ITO (basic) employ- ment (table 8). Although the income multipliers were deter- mined using 1975 as a base year, the employment multipliers were determined using 1977 data. However, it is unlikely that the location quotients and multiplier ratios changed from 1 975 to 1977, since the factors that determine the magnitude of these multipliers were not altered during this period. The employment multipliers were 2.62 for the central Flor- ida region and 2.17 for the northern Florida region. These multipliers corresponded with the ranking of the two regions' income multipliers, except that the employment multipliers were smaller than the income multipliers for each region. This was so because the national wage rates were higher, on the average, than Florida's wage rates, as shown in table 3. Table 9 provides a breakdown of employment distribution for the phosphate industry in the two regions. The totals shown include any administrative personnel necessary for the op- eration of each subindustry. In terms of percentages, the subindustry employment totals correspond with the subin- dustry income totals presented in table 6. Regional employment impacts of the Florida phosphate industry, both direct and indirect, are shown in table 10. Mul- tiplying the direct employment (table 9) by the estimated multiplier (table 8) for each region equals total employment, which includes indirect employment. In the central Florida region, more than 27,000 jobs are directly or indirectly related to phosphate production; in the northern Florida region, phos- phate-related jobs total more than 2,600. As a measure of the importance of these total levels of phosphate industry wages and salaries and employment (direct plus indirect impacts), phosphate-related wages and salaries Table 8.— Employment and employment multipliers for all Florida industries, 1975 Central Florida Northen Florida Nonbasic employment Basic employment __ 189,067 115,520 6,433 5,490 Total employment -.. 304,587 1 2.62 1 1 ,923 Regional employment multiplier 1 2.17 and employment were calculated as percentages of the total regional income and employment for the central and northern Florida regions. These percentages were calculated for 1 975, using the data from tables 5 and 8 plus 1975 industry wage and salary data collected from the phosphate companies and Florida State government agencies. The calculations showed that in the central Florida region, where about 90 percent of the Florida phosphate industry is located, an estimated 13 percent of the region's total wages and salaries and 8 percent of its total employment were generated either directly or in- directly by the phosphate industry. In northern Florida, the respective percentages were approximately 40 and 21, re- flecting the low level of industrialization in Columbia and Ham- ilton Counties. Percentage shares for succeeding years would likely be similar. There are a number of possible reasons why the employ- ment shares were smaller than those for wages and salaries. One factor was that the multipliers for wages and salaries were larger than the employment multipliers. This is because the phosphate industry is capital-intensive, with a relatively large ratio of capital investment to labor employment. And, as shown in table 3, the wage rates in the phosphate industry were well above the average wages for the State. (This av- erage wage differential is also shown in table 24, in the sec- tion, "The Phosphate Industry: An Industrial Complex Ap- proach.") Summary Two phosphate industry impact regions have been defined, the central Florida region, which includes Polk and Hillsbor- ough Counties, and the northern Florida region, comprising Hamilton and Columbia Counties. In the northern Florida re- gion, phosphate production takes place only in Hamilton County. In these regions the phosphate industry is an ITO industry that generates income and employment for other local in- Table 10.— Regional employment generated by the phosphate industry in Florida, 1977 1 1 These employment multipliers are based on location quotients calculated by Florida State University as part of a study done under contract to the Bureau of Mines (6). Source: Various Florida State government agencies. Central Florida Northern Florida Direct Regional indirect 10,600 17,172 1,200 1,404 Total 27,772 2,604 1 Based on employment multipliers calculated by Florida State University. Sources: Florida State Department of Commerce and individual phosphate companies. 11 WAGES AND SALARIES BREAKDOWN: PHOSPHATE INDUSTRY 418.9 WAGES AND SALARIES BREAKDOWN: PHOSPHATE INDUSTRY 40.7 ALL OTHER INDUSTRIES 2,804.0 TOTAL WAGES AND SALARIES 3,222.9 Figure 3.— Total wages and salaries attributable to the phosphate industry in central Florida in 1977 (million dollars). dustries. The economic base model demonstrates this; com- parison of the estimated location quotients shows phosphate chemical and fertilizer mining and agricultural chemicals pro- duction to be the leading ITO industries in Polk and Hamilton Counties and agricultural chemicals production to be the sec- ond leading ITO industry in Hillsborough County. The phos- phate industry in Hamilton County, although small as a per- centage of statewide production, dominates the industrial sector of that county owing to the county's otherwise insignificant industrial base. Through the use of regional multipliers it was possible to estimate the direct and indirect impacts of the Florida phos- ALL OTHER INDUSTRIES 60.3 TOTAL WAGES AND SALARIES 101.0 Figure 4. — Total wages and salaries attributable to the phosphate industry in northern Florida in 1977 (million dollars). phate industry on both regions. Total 1977 wages and sal- aries of approximately $41 8.9 million were attributed to the phosphate industry in central Florida. In northern Florida, approximately $40.7 million in wages and salaries was gen- erated by the phosphate industry. These industry totals rep- resented an estimated 13 and 40 percent, respectively, of the two regions' total wages and salaries, as shown in figures 3 and 4. The industry's regional employment shares were smaller, but nonetheless significant. Some 8 percent of the regional employment in central Florida and 21 .4 percent of northern Florida's regional employment was linked to the phosphate industry. 12 THE PHOSPHATE INDUSTRY: AN INDUSTRIAL COMPLEX APPROACH Location quotient theory and economic base analysis, com- mon techniques used in developing regional studies such as those in the preceding section, have some limitations in ad- dition to their many positive attributes. One limitation is that these techniques may overlook certain interrelationships, such as the possibility of interaction between regions. Therefore, an interregional input-output (l-O) approach was also used to study the Florida phosphate industry as an industrial com- plex. Of the general interdependence approaches available, the interregional l-O approach is most prominent in terms of ac- complishment and recognition. l-O analysis (also known as interindustry analysis) is a general technique that points up the complex interdependence of diverse business, consumer, political, and other cultural units of society. It uncovers to a significant degree the intricate structure of an economy, pro- viding a fertile forum for the display and scrutiny of the under- lying factors and processes that bind together the econom- ically multifaceted regions of the economic system. The strength of l-O analysis lies in its comprehensive representation of (1 ) the production and distribution characteristics of individual industries of different regions and (2) the interrelationships among these industries and between these industries and other economic sectors. It expresses, in essence, the basic fabric of an interindustry system as it exists not only within each region but also among regions. A more specific approach, the industrial complex tech- nique, can be integrated into general interdependence l-O analysis. An industrial complex may be defined as a set of activities occurring at a given location and belonging to a group (subsystem) of activities that are subject to important production, marketing, or other interrelationships. Most of the activities relevant to this analysis of the phos- phate industrial complex in Florida take place in the central Florida region, which includes the Tampa Bay area. A much smaller level of activity, which is nonetheless important to the complex, takes place in the northern Florida region and the Port of Jacksonville. Along with the estimated economic im- pacts that can be identified as direct results of the phosphate industry, other impacts can be approximated through the use of l-O analysis techniques. l-O analysis is used to study the interdependence of eco- nomic sectors. l-O models have been developed for the study of national as well as regional and State economies. For the analytical framework used in this report, a State l-O model was developed that permits measurement of the economic activity in the State of Florida with special emphasis on the phosphate industry. A Bureau of Mines l-O table of the Florida economy (17) was used to estimate phosphate industry mul- tipliers. This table included data compiled for 1972 for 338 industrial sectors such as those listed in tables 3 and 4 of this report. The assumptions embodied in the analytical framework are briefly reviewed here, and a detailed methodology that de- scribes this framework is included in appendix A. First, an estimate of the Florida phosphate industry's annual produc- tion of major products was determined for 1981. From these estimates, the phosphate industry's employment, income, and value of output were estimated for 1981 , using 1977 dollars and assuming constant wages and productivity. Regional nultipliers were then applied to the employment and income sstimates to determine the industry's total economic impact, including direct, indirect, and induced effects (79). (Induced effects refers to the repercussionary effects of secondary rounds of spending or employment.) Multipliers were also applied to the value-of-output estimates in order to determine the direct and indirect effects of the industry's output, which together represent the industry's total statewide output value. The result is a projection of the phosphate industry as it might exist in 1 981 , based on growth rates estimated by the Bureau. In addition to the Florida phosphate industry's effects on that State's economy, the output, employment, and in- come effects of the Florida industry on the national economy were also identified. A national l-O model for 1972, which included data for 404 industrial sectors (28), was used for this purpose. The importance of the Florida phosphate industrial complex lies mainly in its backward and forward linkages. Backward linkages in the phosphate industry are those purchases of inputs by the phosphate industrial complex, such as pur- chases of goods and services, that are associated with the production of phosphate rock and derivative products. These purchases consist chiefly of basic materials and minerals; machinery, supplies, and parts; and labor resources. In this analysis, fiscal aspects of the industrial complex are also considered as part of the backward linkages. There is a sig- nificant amount of leakage from the State in terms of inputs necessary to run the complex. What this means is that a part of the inputs are purchased outside the limits of the industrial complex (meaning in this case outside the State of Florida). Forward linkages of the phosphate industrial complex are sales of intermediate products, in most cases to other in- dustries. These include sales of phosphate rock, agricultural chemicals, and industrial chemicals. Most of the industry's phosphate rock sales is for the domestic market outside Flor- ida, and the remainder is exported to foreign nations. Agri- cultural phosphate chemicals are sold mainly for use as fer- tilizers or as intermediates for processing into mixed fertil- izers, and small amounts are also sold as animal feed sup- plements. A small part of the sales of the Florida phosphate industrial complex is in the form of elemental phosphorus, which is used in detergents formulation, pharmaceuticals, and many other products. Most of the State's elemental phos- phorus that is used to produce industrial chemicals is mar- keted outside Florida. The Regional Impact Shipments of phosphate products through the Port of Tampa in 1 976 (table 1 1 ) accounted for 87 percent of the tonnage and 80 percent of the value of all phosphate product exports from the State of Florida. (These percentages were derived from data aggregated from country-by-country tabulations listed under Code Number 18 s of the U.S. Bureau of the Census, and a portion of these aggregated data is shown in table 1 1 .) The Port of Jacksonville accounted for 6.7 percent of the tonnage and 5.6 percent of the value of the State's phosphate product exports, and the Port of Boca Grande handled 3.3 5 Code Number 18, a classification that includes virtually all Florida ports, is used by the U.S. Department of Commerce, Bureau of the Census, in the compilation of foreian trade statistics. Table 1 1 .—Exports of phosphate products 1 from Tampa (Metric tons and dollars) Product Florida phosphate rock and Florida land pebbles Diammonium phosphate _ Concentrated superphosphate _ Phosphoric acid, fertilizer grade _ Ammonium phosphate fertilizers Mixed chemical fertilizers, n.e.c. _ Phosphatic chemical fertilizers, n.e.c. Normal chemical enriched superphosphate Natural phosphate fertilizers Elemental phosphorus __ Dicalcium phosphate Phosphoric acid, n.e.c Total 1976 Quantity 8,315,876 1,519,183 979,999 221,549 76,752 7,669 9,290 109,225 230 36 11,239.809 Value 281,279,207 180,940,373 91,129,080 51,821,356 9,335,077 1,004,212 1,395,700 2,357,827 324,865 7,296 619,594,993 ' Includes products listed under Code Number 1 8 of the Bureau of the Census. Source: U.S. Department of Commerce, Bureau of the Census, foreign trade statistics. 1977 Quantity 12,228,868 1,814,001 957,926 295,504 139,113 23,418 13,426 34,803 37,126 332 2,196 98 15,546,811 13 Value 316,450,764 233,005,751 90,837,793 66,449,100 16,379,997 2,530,261 2,004,361 862,281 840,321 420,652 338,172 3,072 730,122,525 percent of the total tonnage and 7 percent of these exports in terms of value. Other Florida ports that exported phosphate products — although in relatively low volumes in terms of both tonnage and value — were Fernandina Beach, St. Petersburg, and Port Canaveral. The Florida Phosphate Council has estimated that the Flor- ida phosphate industry's expenditures for. water transporta- tion in 1977 amounted to $21.3 million, or 4 percent of the total value of the products shipped. These outlays were di- vided among barge and ocean traffic. In the next three subsections of this report, the effects of the phosphate industrial complex on Polk County are sum- marized; and the import-export and domestic shipping activ- ities are discussed, together with employment data, for the Ports of Tampa, Jacksonville, and Boca Grande. POLK COUNTY A large share of the activity of the Florida phosphate in- dustrial complex is centered in Polk County. In 1977, total employment in Polk County was greater than 98,000, and of this total, more than 8,600 workers were employed by the phosphate industry. These 8,600 employees earned more than $110 million in 1977. 6 The economic significance of the phosphate industry's work force has been shown to be much larger than is suggested by the industry's nominal 9 percent share of employment in Polk County. The phosphate industry has historically contributed property taxes equal to about 30 percent of the total amount collected in Polk County. The tax base of the county government and the viability of the local economy both depend heavily on the phosphate industry. THE PORT OF TAMPA 7 The Port of Tampa, which includes all deepwater facilities within the city of Tampa, is one of the 10 largest ports in the United States in terms of tonnage volume. In 1977 it handled more than 46 million metric tons of cargo, and of this tonnage, 61 percent was products either sold or purchased by the Florida phosphate industrial complex (table 12). Phosphate 6 Florida Department of Labor and Employment Security, Division of Employ- ment Security. 7 See reference map in figure 1 . Table 12.— Inbound and outbound traffic through the Port of Tampa for selected commodities related to the phosphate industries, 1977 (Metric tons) Total Foreign Domestic Barge shipments Commodities Imports Exports Inbound Outbound In Out Ammonia ._ Ammonium sulfate Fertilizer, bagged Fertilizer, materials Phosphate, bagged Phosphate, bulk Phosphatic chemicals, bagged Phosphatic chemicals, bulk Phosphoric acid Phosphorus Sulfur, liquid Sulfuric acid 157,655 23,847 9,135 41 ,400 2,971 18,032,144 32,822 3,520,487 535,187 248 3,329,488 32,643 157,655 21,083 517 744,577 32,643 7,629 18 2,971 10,814,815 32,807 2,651,201 535,187 248 2,584,91 1 165,618 5,446 23,847 20,299 1,507 7,051,711 15 863,323 Total selected commodities Total shipments, Port of Tampa 25,718,028 42,020,357 956,475 4,323,903 14,044,875 15,022,596 2,584,911 6,289,958 171,064 171,064 44,146 8,262,322 7,916,556 7,950,514 Source: Port of Tampa Authority. 14 Table 13.— Relative value and tonnage of various cargoes shipped through the Port of Tampa, 1977 Type of cargo Percent of total dollar value shipped Percentage of total tonnage Phosphate products Petroleum products Other dry bulk Other liquid bulk General cargo 34 32 5 9 20 47 29 12 10 2 Total 100 100 products alone represented 47 percent of the total tonnage and 34 percent of the total value of shipments handled by the port in 1977 (table 13). The total economic impact of the port for 1 977 was esti- mated at more than $500 million. Of this total, approximately $200 million was estimated as the primary or direct impact, and $356 million was estimated as the indirect impact. About $77 million of the direct impact was attributed to the handling of phosphate products, and the remaining $123 million was made up of petroleum products, general cargo, and other bulk items (4). Direct employment related to the Port of Tampa in 1977 accounted for approximately 5,800 jobs, all but 20 of which were full-time jobs. An additional 24,166 jobs have been identified as being indirectly related to the activities of the port, of which 21,276 were in the phosphate fertilizer sector (5). At an average income of $9,000 for each of these 24,166 indirectly related jobs, the total indirect income impact of the port would have been approximately $217 million. Nearly $500 million in exports of phosphate products was directly handled by the Port of Tampa in 1976, and in 1977 the value of such exports directly handled by the port in- creased to $580 million. If the value of all outbound phosphate products from the port were accounted for, including domestic shipments, the total value for 1977 would have been more than $600 million. Phosphate rock and related products accounted for more than 93 percent of all foreign exports that passed through the Port of Tampa in 1 977, and nearly all domestic outbound shipments that left the port by ship or barge were also phos- phate rock and/or related products (table 12). The largest cat- egory of shipments was bulk phosphate rock, of which more than 18 million metric tons was shipped. Of this total, about 60 percent was exported to foreign countries and the rest barged or shipped to domestic ports. Major foreign con- sumers of bulk phosphate rock were Canada, the Republic of Korea, Japan, France, and the Federal Republic of Ger- Table 15. — Port of Jacksonville exports of selected commodities related to the phosphate industry, 1970-76 (Metric tons and dollars) Phosphate rock Phosphate fertilizers Year Quantity Value Quantity Value 1976 1975 1974 1973 1972 1971 1970 636,479 719,155 1,006,389 1,117,539 1,013,255 936,629 632,029 22,056,763 39,475,829 23,333,669 9,031 ,888 7,989,651 8,204,194 5,580,361 119,466 136,431 115,140 89,001 114,963 134,805 100,403 12,754,563 33,006,151 24,759,103 8,494,945 8,234,520 6,474,821 3,860,181 Source: Port of Tampa Authority. many; each of these countries purchased more than 1 million tons in 1978. Tampa shipments of phosphatic chemicals totaled more than 3.5 million metric tons in 1977, of which approximately 75 percent was foreign exports. Exports of phosphatic chem- icals doubled in volume between 1970 and 1976, and the dollar value of these exports quadrupled during that period (table 14). Major foreign consumers of phosphatic chemicals were Brazil, India, Belgium, France, Italy, Turkey, Mainland China, and the Federal Republic of Germany. Sulfur (including sulfuric acid) and ammonia were the major input items — either as imports or inbound shipments from other domestic ports — to the Florida phosphate industrial complex via the Port of Tampa. Domestic ammonia and sulfur are acquired from the Gulf Coast area, mainly from Texas and Louisiana. Sulfur is also imported, mostly from Mexico, and ammonia is imported from the U.S.S.R. In addition, the complex is a major user of electricity and therefore an indirect user of petroleum products, which also pass through the Port of Tampa. As shown in table 12, exports amounted to almost 80 percent of the total foreign trade in and out of the Port of Tampa in 1 977. This indicates that the port maintained a very favorable balance of trade, largely due to the impact of the phosphate industry. THE PORTS OF JACKSONVILLE AND BOCA GRANDE 8 The Port of Jacksonville exports phosphate rock and phos- phatic fertilizers. In 1976 exports included about 636,479 metric 1 See reference map in figure 1 . Table 14. — Port of Tampa imports and exports of selected commodities related to the phosphate industry, 1970-77 (Thousand metric tons and thousand dollars) Imports Exports Ammonia Sulfur Phosphate, bulk and bagged Phosphatic chemicals Phosphoric acid Year Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value 1977 ... 1976 .... 1975 ... 1974 ... 1973 ... 1972 ... 1971 ... 1970 ... 158 127 140 62 83 117 140 138 NA NA 11,943 6,938 3,758 5,325 6,615 6,346 745 615 632 489 50 37 107 192 NA NA 34,961 18,063 1,251 916 2,623 5,988 10,818 7,660 8,470 10,013 9,495 8,754 8,337 NA 1 279,196 258,206 358,443 194,728 79,049 77,266 69,610 64,908 2,684 2,159 1,883 942 1,363 1,129 1,126 1,090 NA 238,474 389,387 197,417 118,381 78,127 59,515 55,834 535 394 222 125 37 33 115 30 NA NA 42,684 14,170 2,962 2,044 4,755 1,526 NA Not available. 1 Based on average export price for 1977. Source: Port of Tampa Authority. 15 Table 16.— Port of Boca Grande exports of selected commodities related to the phosphate industry, 1970-76 (Metric tons and dollars) Phosphate rock Phosphate fertilizers Year Quantity Value Quantity Value 1976 1975 1974 1973 1972 1971 1970 107,335 68,555 97,978 307,505 193,071 376,217 434,756 3,892,500 2,714,584 2,530,572 3,564,388 1,671,455 2,929,789 3,492,766 261 ,632 213,231 431,485 512,491 356,839 262,688 169,145 39,104,937 39,248,688 84,812,442 45,211,667 20,239,702 13,361,024 8,096,090 Source: Port of Tampa Authority. tons of phosphatic rock and 1 1 9,466 metric tons of phosphatic fertilizer products. Although the dollar value of phosphate rock exports more than doubled between 1973 and 1976, the total tonnage dropped in that period by 43 percent (table 15). In that same period there was a 34-percent increase in the tonnage of phosphatic fertilizer, and the value of such ship- ments increased at about twice that rate, or 67 percent. Phos- phate product prices, which had risen sharply in 1974 and 1975, showed signs of leveling off in 1976 and 1977. Export tonnages of phosphate rock from the Port of Boca Grande have declined; these exports totaled 107,355 metric tons in 1976. The value of phosphate rock exports, however, has increased. Exports of phosphate fertilizers from Boca Grande have declined in recent years, from a peak of 51 2,491 metric tons in 1 973 to 261 ,632 metric tons in 1 976 (table 1 6). Rail and Motor Carrier Transportation RAIL SHIPMENTS Railroads are the primary means used for shipping large- volume movements of phosphate rock from beneficiation plants to shipping ports and to fertilizer processing facilities. These movements, particularly in the central Florida phosphate re- gion, are very heavy, with some beneficiation plants shipping as many as 1 50 cars, or 1 0,000 tons of phosphate rock, each day (7). In the central Florida region, multiple-car shipments from several origins are assembled into trains for movement to various destinations within the region, including the Tampa Bay area, or to switching yards for through movement to more distant destinations. Table 17 lists the tonnages, modes of transportation used by selected Florida industries for shipping goods to other regions of the United States, and the percentage distribution of traffic in various products among these modes. In this table, phosphate products are included in the agricultural chemicals and superphosphates categories. Shipments of agricultural chemicals from Florida represented 22 percent of all the ton- nage shipped from the State. Almost all of these shipments originated in the phosphatic fertilizers subindustry of the Flor- ida phosphate industry. Table 18 shows the geographical distribution of various kinds of agricultural chemicals that were produced in Florida and shipped to other parts of the United States. Based on a sample of waybill data compiled by the U.S. Bureau of the Census, this table indicates that 74 percent of the fertilizer subindustry's shipments went to the South Atlantic region. Most of the shipments recorded for this region were within Table 17.— Tonnages and means of transportation for selected manufactured goods shipped form Florida to the rest of the United States, 1972 Product TCC Quantity shipped, thousand metric tons Relative share of total shipments, percent Rail Truck carrier Private trucks Air Water Other Unknown Sampling variability, percent Chemicals and allied products _ Food and kindred products Stone, clay, glass, and concrete products __ Pulp, paper, and allied products Lumber and wood products, except furniture Fabricated metal products, except ordinance, machines, and transportation Transportation equipment Electrical machines, equipment, and supplies Tobacco products All other miscellaneous Total 28 20 32 26 24 34 37 36 21 NAp 8,016 6,029 5,354 2,796 914 283 30 8 7 3,079 76.0 31.6 44.8 79.8 48.5 8.7 .6 .3 3.6 44.6 6.4 24.0 43.3 16.0 5.2 28.3 34.1 52.4 90.2 20.8 17.3 41.4 11.8 3.7 45.8 60.6 64.6 4.9 1.7 29.9 0.5 .4 7.8 2.1 .5 2.1 .5 2.3 8.1 4.0 0.3 .2 .2 .4 23.9 1.0 .4 Chemicals and allied products, selected sub-categories: 2 Agricultural chemicals Superphosphates Industrial inorganic and organic chemicals . Miscellaneous industrial inorganic chemicals Sulfuric acid _ Miscellaneous chemical products NAp 287 28712 281 2819 28193 289 26,515 5,924 4,271 1,433 1,301 129 15 54.6 80.9 96.8 80.4 86.1 68.5 7.7 20.8 2.6 .4 13.0 10.4 18.6 77.3 23.2 165 2.8 5.8 2.7 9.9 4.6 10.4 1.0 .2 .4 .4 3.2 .1 0.2 1.0 .3 .2 .7 .2 3.0 3.4 .2 24 22 29 11 42 33 40 47 11 12 30 37 20 22 25 40 NAp Not applicable. 1 Transportation Commodity Code used in Census of Transportation, 1972, a publication of the U.S. Department of Commerce, Bureau of the Census. 2 The sum of the quantities shipped for these subcategories is greater than the quantity shipped of chemicals and allied products because some products are included in more than one of these subcategories. Source: U.S. Department of Commerce, Bureau of the Census (29). 16 Table 18. — Tonnages and distribution of chemical and allied products manufactured in Florida and shipped to the rest of the United States, by region, 1 1972 TCC 2 Total shipments, thousand metric tons Distribution by region, 3 percent Product Mid- Atlantic East North Central West North Central South Atlantic East South Central West South Central Chemical and Allied products Agricultural chemicals Superphosphates Industrial inorganic and organic chemicals Miscellaneous industrial and in- organic chemicals Sulfuric acid Miscellaneous chemical products . 28 287 28712 281 2819 28193 289 8,007 5,554 3,915 1,429 1,301 86 8 2.0 ( 4 ) ( 4 ) ( 4 ) ( 4 ) 12.4 12.8 16.1 17.5 19.0 ( 4 ) 25.0 7.0 8.9 6.9 4.3 4.7 ( 4 ) 38.0 64.9 74.6 72.8 46.6 44.3 100.0 25.0 9.1 ( 4 ) ( 4 ) 25.4 26.1 ( 4 ) 12.0 3.9 3.7 4.2 5.8 5.9 ( 4 ) ( 4 ) 1 U.S. Department of Commerce, Bureau of the Census regions (29). 2 Transportation Commodity Code used in Census of Transportation, 1972, a publication of the U.S. Department of Commerce, Bureau of the Census. 3 Shipments to the New England, Mountain, and Pacific Regions amounted to less than 1 percent of the total shipments for each of the product categories listed. 4 Less than 1 percent of total shipments. Florida and were shipped through the Port of Tampa. Of the phosphate rock produced by the industry's mining sector, 85 percent was shipped by rail, to points both within and outside the State (table 19). Some phosphate rock was also shipped by rail-barge combination to other parts of the United States, and some was exported. Approximately $54 million in revenue to railroads was generated by phosphate rock traffic in 1976, and the railroads' phosphate revenues for 1 977 were estimated at $65 million. These estimates were based on statistics for the Southern District; 9 however, almost all phosphate rock mining in this district took place in Florida. Total railroad revenue attributed to the industry for all movement of phosphate rock, phosphate fertilizers, and re- lated commodities amounted to $71 million in 1976 and $86 million in 1977, according to the Florida Phosphate Council. Almost all of the $86 million spent in 1 977 was directly related to the operations of Seaboard Coast Line Industries, Inc. (SCL), and its subsidiaries in Florida. SCL attributed more than 13 percent, or $229 million, of its total 1977 transpor- tation revenues of $1 ,678.7 million to its Florida operations. Phosphate industry shipments, including some 19.5 million metric tons of phosphate rock shipped to the Port of Tampa from the central Florida region, represented approximately 37 percent of SCL's total transportation revenues in the State of Florida that year. TRUCK SHIPMENTS Truck movement of phosphate rock is used to supplement rail movement during periods of peak production in the central Florida region. Trucks are used as a temporary replacement for rail transportation when rail service is interrupted and as a primary means of transportation where low shipping vol- umes make rail transport impractical. Almost all truck traffic related to the Florida phosphate industrial complex involves movements of phosphate rock, molten sulfur, and fertilizer between the Port of Tampa and mines and chemical facilities located in Polk County. The Florida Phosphate Council es- timated that expenditures for truck transportation amounted to $6.9 million in 1976 and $9.3 million in 1977. Electric Utilities The electric utility industry in Florida receives significant revenues from the phosphate industry. Members of the Flor- ida Phosphate Council remitted more than $120 million to the electric power utilities in 1977. Electric power is used by the phosphate industry for mining, for the operation of processing facilities, and for other purposes. Phosphate industry payments to Tampa Electric Co. in 1977 exceeded $79 million, which was 23 percent of the company's total revenue and 74 percent of its industrial rev- enue. In the same year Florida Power Corp. received reve- nues of $41 million from the phosphate industry, which rep- 9 The Southern District as designated by the Interstate Commerce Commission includes Florida, Tennessee, North Carolina, South Carolina, Georgia, Al- abama, Mississippi, southeastern Louisiana, and Kentucky. Table 19. — Transportation means used for shipments of Florida and North Carolina phosphate rock, by destination, 1976 (Thousand metric tons) Destination 1 Means of transportation Florida Alabama, Arkansas, North Carolina, Tennessee Illinois, Iowa, Kansas, Michigan, Missouri Louisiana, Mississippi, Texas California and Arizona Export shipments Rail Truck Barge Conveyor Rail and barge Truck and rail 13,452 1,049 O 1,179 ( 2 ) ( 2 ) 1,559 ( 2 ) ( 2 ) ( 2 ) ( 2 ) ( 2 ) 65 ( 2 ) ( 2 ) ( 2 ) ( 2 ) ( 2 ) 5 ( 2 ) ( 2 ) ( 2 ) 6,573 45 39 ( 2 ) ( 2 ) ( 2 ) ( 2 ) ( 2 ) 363 ( 2 ) 3,357 ( 2 ) 10,324 ( 2 ) 1 Shipments to Idaho, Montana, and Utah amounted to less than 1,000. metric tons for each of the transportation categories listed. 2 Less than 1 ,000 metric tons. 17 Table 20.— Average cost of electric power in Florida for selected industrial uses (Cents per kilowatt-hour) Table 21 .—Selected taxes paid or collected by the Florida phospr ite industry complex (Thousands) Utility Use Tampa Electric Co. Florida Power Corp. Mining: 1976 2.399 2.542 1.199 1.222 2.154 2.287 2 672 1977 2.987 Chemical plants: 1976 2 270 1977 _ 2.566 Electric furnaces: 1976 NAp NAp 1977 NAp Not applicable. resented 7 percent of that company's total revenue and 53 percent of its industrial revenue. Florida Power and Light also serves the phosphate industry. In 1977 approximately 64 percent of the electrical power consumed by the phosphate industry was purchased from Tampa Electric, 35 percent from Florida Power, and 1 percent from Florida Power and Light. Industrial costs for electric power for selected phosphate- related uses are shown in table 20. A review of electric energy costs to the Florida phosphate industry from 1968 to 1977 showed that the cost of electric energy sold by Florida Power to the mining industry increased by 237 percent during that period. The cost per kilowatt-hour was 0.888 cent in 1968 and had risen by 1977 to 2.99 cents per kilowatt-hour. The largest increase — an increase of more than 100 percent during a 1-year period — was from 1973 to 1974, when the cost of electric energy increased from 1.1 cents per kilowatt-hour to 2.08 cents per kilowatt-hour. The following tabulation, which shows how a Florida elec- tric company typically spends its revenue, is an example of a forward linkage of the phosphate industry. In this tabulation, the more than $41 million paid to Florida Power by the phos- phate industry is broken down, based on the power com- pany's average revenue dollar of expenditures for 1977. Percent Fuel and purchased power 41.5 Interest and other income deductions 7.7 Federal, State, and local taxes 17.8 Dividends 7.1 Payroll and employee benefits 7.4 Provision for property replacement 8.2 Materials, supplies, and other expenses .... 4.9 Retained in the business 5.4 Total 100.0 Expenditures from revenues could be similarly broken down for Tampa Electric. State and County Tax Revenues The phosphate complex is a major generator of tax revenue for the State of Florida. State taxes paid by the industry in- clude the severance tax on minerals, the corporate income tax, the sales and use tax, and vehicle and motor fuel taxes. The industry is also a source of county-level tax revenue in the form of property taxes. The State sales and use tax is an important source of revenue because of the complex pur- State State Ad valorem sales and corporate Fiscal county-level use tax income tax Severance year tax paid collected paid tax paid 1 1977-78 $12,500 $13,800 NA 2 $41 ,600 1976-77 9,500 12,850 $2,459 22,056 1975-76 6,700 13,800 3,270 22,322 1974-75 5,800 8,200 5,460 10,838 1973-74 NA NA 1,712 4,047 1972-73 NA NA NA 3,268 1971-72 NA NA NA 1,509 NA Not available. 1 For fiscal years 1971-76, a total of $5,187,000 was returned to the industry in the form of a severance tax credit based on the amount of ad valorem tax paid. (Conditions with respect to land reclamation were also a con- sideration in the application of this credit.) The credit amounted to about 9 percent of total severance tax collections. 2 Estimated by Finance, Taxation, and Claims Committee of the Florida Senate, based on value at point of severance of $1 1 .57 per metric ton. Sources: Florida Phosphate Council and Florida State Department of Revenue. chases of raw materials and constituent parts by the phos- phate industry. Also important to the State are sales taxes collected by the industry on sales of phosphate rock, phos- phate agricultural chemicals, and industrial chemicals sold to other industries. Table 21 presents a summary of taxes paid by the phosphate complex to State and local governments from fiscal year 1971-72 to fiscal year 1977-78. In the fol- lowing tabulation, State and county tax revenues from phos- phate industry activities are estimated for 1981, in million 1977 dollars: State corporate income taxes 5.8 State sales and use taxes 25.0 State vehicle and motor fuel taxes .3 State severence taxes on minerals 48.5 All property taxes paid to counties 20.0 Total projected Florida tax payments 99.6 CORPORATE INCOME TAXES Florida has had a corporate income tax since January 1 , 1972. This tax is collected from all corporations, both do- mestic and foreign, doing business in Florida. The tax rate is 5 percent of the adjusted Federal corporate income tax owed by the firm, less a $5,900 exemption. Since the tax was instituted, the phosphate industry in Florida has paid the fol- lowing amounts each year in corporate income taxes, ac- cording to the Florida Department of Revenue: 1973 $1,712,150 1974 5,460,341 1975 3,269,859 1976 2,459,228 1977 NA 1981 e 3,500,000 8 Estimated. NA Not available. The total for 1974 was unusually large because it included taxes assessed in 1973 but not paid until 1974. In addition to the 1981 estimate of $3.5 million in corporate income tax payments by the phosphate industry, it was projected that other industries would pay $2.3 million in corporate income taxes attributable to phosphate industry activity. The effect 18 of the phosphate industry's activities on other industries is described later with respect to output in the subsection, "Output Effect." SALES AND USE TAXES The Florida sales and use tax is the State's primary source of revenue. The tax rate is 4 percent of final sales, but there are many general and specific exemptions. In 1977 the phos- phate complex paid more than $14 million in Florida sales taxes, and it is expected to pay an estimated $15.7 million in 1981. Based on this estimate, total State sales tax reve- nues attributable to phosphate-related output are expected to exceed $25 million in 1981. Fertilizers and animal feeds, which constitute an important part of the phosphate industry's total sales, are exempt from the sales tax. Without this ex- emption, phosphate-related sales tax revenues would be much larger. VEHICLE AND MOTOR FUELS TAXES The Florida Phosphate Council reported that its members paid $192,000 in State vehicle and fuel taxes in 1977; how- ever, the total tax paid as a direct result of industry-related activity was much larger. Vehicle and motor fuel taxes paid by other firms and industries as a direct result of phosphate industry activity were estimated based on interindustry de- pendency coefficients calculated from an l-O table. Based on these estimates, it was estimated that in 1981 more than $300,000 in State vehicle and motor fuel taxes would be attributable to activity related to the phosphate industry. This forecast was based on a fiscal impact or revenue multiplier that is analogous to the output multipliers subsequently de- scribed under the subheading, "Output Effect." The revenue multiplier was calculated from estimates of revenue gener- ated through the backward linkage for the support of materials to the production process. SEVERANCE TAXES The State's solid minerals severance tax has been in effect since July 1, 1971, when the tax rate was set at 3 percent. The tax rate is applied to a value set by the State for phos- phate rock at the point of severance. State law originally provided for a gradual increase in the tax rate, and the rate was raised to 4 percent beginning July 1, 1973, and was subsequently raised to 5 percent beginning July 1, 1975. In 1977 a Phosphate Land Reclamation Study Commission was created to examine the land reclamation practices of the State's phosphate rock mining operations, and the commission's most important recommendations were published as a report (14). As a result of this study, the severance tax rate on phosphate rock was increased in 1 978 from 5 to 1 percent. Tax pay- ments beginning with the 1978 tax year were to be made quarterly; previously, the tax was paid in a single annual payment that was due April 1 . The value set by the State for computation of the severance tax on phosphate rock may vary from year to year. This value increased to $12.84 per metric ton in 1977 from the previous value of $10.50 per metric ton. Severance tax collection's from the phosphate industry are shown in the following tabulation, in million dollars: 1973-74 3.4 1974-75 9.6 1975-76 20.1 1976-77 20.0 1977-78 M1.6 1978-79 1 42.2 1979-80 2 48.5 'Estimated by the Finance Taxation and Claims Committee of the Florida Senate, based on the pre- 1978 point-ot-severance value of $10.50 per ton. Estimated by the Bureau of Mines. A tax credit is available to the mining industry for the re- clamation of mined land. Land reclamation has been man- datory since 1 975, when a prior distinction between "old lands" (lands mined or disturbed by the severance of phosphate prior to July 1, 1975) and "new lands" was eliminated. The tax credit program requires producers to develop programs of reclamation and restoration that must be approved by the Florida Department of Natural Resources. Under the tax credit program, producers are allowed to credit up to 20 percent of ad valorem taxes against the sev- erance tax, except that the credit may not exceed the total amount of ad valorem taxes remitted on a specific parcel of mining property. Of the total phosphate severance tax, 75 percent goes to the Land Reclamation Trust Fund, and 25 percent goes to the State's General Revenue Fund. Refunds of up to 100 percent of the amount paid to the reclamation trust fund are allowed for approved plans for mine site recla- mation. Table 22. — Florida acreage distributed by phosphate mining and acreage in various stages of reclamation, 1976 Acreage included in reclamation programs Acres disturbed by mining, 1976 Producer Reclamation in progress, 1976 Reclamation completed, 1976 Total reclamation completed, July 1, 1971 to Dec. 31, 1976 Acres disturbed by mining, July 1, 1975, to Dec. 31, 1976 Agrico Chemical Co. 2,082 737 1,084 327 1,978 698 431 529 27 358 188 872 465 838 80 1,301 10 374 106 158 102 2,178 964 929 325 3,194 768 483 449 280 1,165 1,430 176 375 278 1,278 627 782 376 37 274 255 2,185 Borden Chemical Co. 275 Brewster Phosphate Co 680 Gardinier, Inc. International Minerals & Chemical Co. Mobil Chemical Co. 400 1,932 901 Occidental Agricultural Chemical Co. Swift Chemical Co. 1,075 549 T.A. Minerals Corp. U.S.S. Agri-Chemicals, Inc. 37 423 W. R. Grace & Co. 425 Total 8,439 4.306 10,735 5,888 8,882 Source: Florida Department of Natural Resources, Division of Resource Management, Bureau of Geology. 19 Table 23.— Selected millage rates for the Florida ad valorem tax, 1976 County Polk Hillsborough Hamilton .. Columbia __ Manatee ... Hardee Pasco Hernando . Citrus Levy _ Marion Gilchrist Alachu Putnam Lafayette ... Pinellas .... DeSoto County rate 5.5390 6.0470 6.0290 6.6920 7.0580 4.6620 7.6450 6.0760 8.1240 7.1000 3.1800 5.9146 7.1931 9.2600 3.0000 5.5400 7.9020 Schools rate 8.0000 8.0000 8.0000 7.6970 8.0000 6.3000 8.0000 8.0000 8.0000 7.8140 8.0000 6.3000 8.0000 7.4000 6.3000 8.0000 8.0000 Total 13.5390 14.0470 14.0290 14.3890 15.0580 10.9620 15.6450 14.0760 16.1240 14.9140 11.1800 12.2146 15.1931 16.6600 9.3000 13.5400 15.9020 The tax credit for land reclamation can be accumulated over time, but after 5 years, unclaimed reclamation funds revert to the General Revenue Fund. Since the inception of the severance tax, the phosphate industry has paid more than $100 million in severance tax payments. Of this total, more than $24 million has been refunded to mining compa- nies for the completion of reclamation projects. A summary of recent reclamation activity is presented in table 22. AD VALOREM PROPERTY TAXES According to the Florida Phosphate Council, members paid a total of $12.5 million in property taxes in 1977. Most of these taxes were paid to county and local governments in the central Florida region. In table 23, the ad valorem tax millage rates are listed for selected counties. It was estimated that the phosphate industry will pay more than $20 million in property taxes in 1981. Output Effect Marketable production of phosphate rock in Florida ex- ceeded 40 million metric tons in 1978. Based on an estimated production of 43 million metric tons in 1981 for Florida alone, it was projected that the direct output (sales) by the Florida phosphate industry for that year would total approximately $870 million, in 1 977 constant dollars. This projection of direct output included $303 million for phosphate rock shipped di- rectly out of the region to foreign countries or domestic con- sumers and $567 million for phosphate fertilizer processed in the State from Florida phosphate rock. The total effect of phosphate production, however, is much larger than $870 million. An additional output effect of the industry is in the form of sales of goods and services by second-level suppliers to the phosphate industry. Further- more, phosphate industry activity generates sales by third- level suppliers to the second-level suppliers. Added together, the industry-related sales of the second- and third-level sup- pliers constitute an indirect output effect of the phosphate industry which can in turn be added to the direct output. Succeeding levels of suppliers can also be included, but their contribution to the total output effect becomes less and less significant. The output multipliers for the phosphate industry measure the sum of direct and indirect requirements from all economic sectors needed to deliver one additional dollar of output from the phosphate industry to final demand (the consumer). These multipliers were derived from a Leontief inverse matrix 10 which showed the direct and indirect requirements per unit (dollar) of final demand for each sector. To obtain the output multi- pliers, phosphate industry data from the matrix were totaled. The total multiplier for Florida phosphate rock mining and beneficiation was estimated to be 1 .5440, and the multiplier for Florida fertilizer manufacturing was estimated to be 1 .5738. The magnitude of the Florida phosphate industry's output effect is apparent from the $1 .4 billion that was estimated as the industry's total combined output effect for 1981. Employment Effect Phosphate industry employees are among the highest paid industrial workers in central Florida; they are also among the highest paid workers in the State. Of all manufacturing em- ployees in Polk County, phosphate industry employees earn the highest hourly wage and work the lowest number of hours per week. Similarly, in northern Florida, the highest labor 10 The Leontief inverse matrix was derived from a direct requirements l-O table prepared for the State of Florida. Table 24, -Comparison of labor force, earnings, and hours worked for selected industries in Polk County and the State of Florida, 1977 Industry Annual labor force e Annual wages 1 Hours worked per week 1 Hourly earnings 1 Polk County: Phosphate rock mining and beneficiation 4,487 4,131 5,299 19,100 5,190 8,592 13,783 374,600 $13,476 12,789 8,586 10,765 13,476 13,699 9,030 9,799 44.3 44.8 48.0 45.1 44.3 45.5 45.7 40.7 $5.85 Phosphate fertilizer manufacturing Citrus food products 5.49 3.44 All manufacturing State of Florida: Phosphate rock mining and beneficiation Phosphate fertilizer manufacturing Citrus food products 4.59 5.85 5.79 3.80 All manufacturing 4.63 6 Estimated. 1 Average. Source: Florida Department of Commerce, Division of Employment Security. 20 Table 25.— Effect of Florida phosphate industry output, employment, and income on the on the State of Florida, as projected for 1981 Phosphate rock mining and beneficiation Phosphate fertilizer production Industrial inorganic chemicals 1 Combined impact Output effect, million 1977 dollars: Direct Indirect 303 165 567 325 870 490 Total 468 892 1,360 Employment effect, number of jobs: Direct Indirect Induced 7,030 6,214 16,343 5,147 3,812 8,375 377 305 896 2 1 2,554 10,331 25,614 Total 29,587 17,334 1,578 48,499 Income effect, million 1977 dollars: Direct Indirect Induced 93.7 50.7 92.3 68.6 52.9 77.5 5.0 2.2 4.6 3 167.3 105.8 174.4 Total 236.7 199.0 11.8 447.5 1 Primarily elemental phosphorus. 2 Based on a projected of 43 metric tons in 1981 and the assumption that an average of 291 .92 workers will be required per million tons of output. 3 Based on the assumption that a total of 12,554 employees will be working in the industries listed above in 1981, at an average of $13,329 per year. wage is earned by workers at the Hamilton County phosphate operations of the Occidental Agricultural Chemical Co. The importance of phosphate industry employment to the central Florida regional economy is illustrated in table 24, which shows how wage and employment levels in the phos- phate industry compare with those of selected other indus- tries. This table also shows how Polk County wage and em- ployment levels compare with those of the State as a whole for these industries. In addition to the high rate of pay they earn, phosphate industry employees work steadily the year round with little or no layoff time, whereas employment in the citrus food prod- ucts industry, for example, is seasonal. The steady flow of wages and salaries generated by the phosphate industry helps provide a stable economy in central Florida. Table 25 shows estimated employment for 1981 for phos- phate rock mining and beneficiation, phosphate fertilizer pro- duction and inorganic industrial chemicals production in the State of Florida. As shown in this table, it was estimated that 12,554 workers will be directly employed in the Florida phos- phate industry in 1981 (based on a projected output of 43 million metric tons of phosphate rock). The total number of jobs expected to be impacted by the production of Florida phosphate products in 1981 was estimated at more than 48,000. This total includes workers who are directly employed by the industry as well as those whose jobs are either indi- rectly related to the phosphate industry or induced by phos- phate industry activity. (Induced employment includes any jobs that support primary and secondary employment, such as retail and service employment.) INCOME EFFECT Table 25 shows that the total income effect expected to be generated by the Florida phosphate industry in 1981 was estimated at $447.5 million. 7ofa/ income effect refers to the sum of direct, indirect, and induced income; induced income is all tertiary and subsequent income generated. Of the total income effect estimated for 1981, direct and indirect income totaling $273.1 million was included in an estimate of the industry's total 1981 output effect. This estimate of the in- dustry's output effect, $1 ,360 million, is also shown in table 25. The remainder of the total income effect, $174.4 million, is induced income. The total income effect was calculated based on a fype // multiplier, which is the ratio of the direct, indirect, and induced income change to the direct income change when final demand is increased by one unit. A more detailed explanation of type II multipliers is given in appendix A. Table 26.— Distribution of operating costs 1 in the Florida phosphate industry, 1977 (Thousands) Expenditure item Within-Florida costs Total costs, including out-of-State Trucking Railroad transportation New construction $9,300.0 86,000.0 2 1 26,000.0 120,200.0 13,800.0 21,000.0 309,000.0 12,500.0 1 ,800.0 192.0 3 1 64,000.0 42,400.0 13,200.0 $9,300.0 86,000.0 2 1 63 000 Electric power Sales taxes 120.200.0 13 800 Shipping firms, barges, etc .. Equipment, supplies (including raw materials), and services Property taxes, county Telephone service 2l!oOO.O 612,000.0 12,500.0 1 800 Vehicle fuel tax, State Payroll Severance tax, State Natural gas distribution 192.0 3 1 64,000.0 42,400.0 13,200.0 Total 919,392.0 1,259,392.0 1 Estimated. 2 These figures may include capital outlay misidentified as new construction; this could not be determined. 3 Assuming that total payroll was expended in Florida. Source: Florida Phosphate Council. 21 Table 27. — Estimated operating costs and capital expenditures for the Florida phosphate industry, 1978 (Million 1977 dollars) Industry Operating costs Capital expenditures Phosphate rock mining and beneficiation _ Phosphate fertilizer manufacturing: Phosphate acid, wet process Ammonium phosphate 490.0 687.0 250.3 148.5 421.3 463.3 63.6 Concentration superphosphate 95.8 Total _ 1,575.8 1 ,044.0 at more than $1.0 billion, represents almost two-thirds of estimated total operating costs. Because of concern for the environment and the cost of compliance with new environmental laws, the U.S. Bureau of the Census has identified pollution abatement costs and capital expenditures for the major manufacturing industries, including those of the Florida phosphate fertilizer processing subindustry. Of the two totals shown in table 27, $14.1 million in capital expenditures and $20.9 million in total operating costs were identified as pollution abatement costs and ex- penditures for the phosphate fertilizer processing part of the industry (30). CAPITAL EXPENDITURES AND OPERATING COSTS Phosphate industry expenditures are estimated by item for 1977 in table 26. This item-by-item expenditure-allocation table shows fairly accurately the distribution of operating costs for the industry. (It is possible, however, that certain capital outlays may have been misidentified and included in this table as expenditures for new construction; but this could not be determined.) Estimates of total operating costs and capital expenditures for the Florida phosphate industry in 1978 are given in table 27. The value of replacement capital expenditures, estimated Summary The Florida phosphate industrial complex is forecast to produce the following value of output in 1981 and provide the following employment, income, and revenue benefits to Florida (directly, indirectly, or by induced effects): Total output $1,360 million Total employment 48,499 jobs Total personal income 1 $447.5 million Total tax revenue $99.6 million 1 Of this amount, $273. 1 million is also included in the $1 ,360 million total output figure. 22 NATIONAL SIGNIFICANCE OF THE FLORIDA PHOSPHATE INDUSTRY Domestic Profile The central Florida phosphate district is the largest phos- phate producing region in the world. In 1978 domestic pro- duction of marketable phosphate rock reached a recond high of 50 million metric tons, of which approximately 40 million metric tons was from Florida. Based on projected production levels, it is expected that the central Florida phosphate district will continue to be a significant source of phosphate rock for the foreseeable future. If recent projections prove correct, however, production in central Florida will decline after 1987. Also, if certain economic conditions change, the life expect- ancy of the district's reserves would be expected to change accordingly. Most of Florida's phosphate rock production comes from the Bone Valley Formation in Polk and Hillsborough Counties. This formation is unique and has been a principal world source of phosphate rock. From a cost-of-production point of view, it is far superior to any other known foreign or domestic phos- phate deposit. The Bone Valley deposit has well-defined geo- graphical limitations, and certainly at some future date it will be depleted. Production levels are eventually expected to diminish because of increases in capital costs and depletion of the reserves. Other possible limitations to capacity re- placement and future growth include environmental and other Government regulation, productivity lags, and inadequacy of Florida's transportation system for phosphate rock. These and other factors expected to affect the future output of the Florida phosphate industry are discussed fully in appendix D. Florida's phosphate industry has access to both domestic and international trade through the Ports of Tampa, Boca Grande, and Jacksonville. In terms of access to eastern and many midwestern domestic markets, Florida's phosphate producers have several advantages over phosphate produc- ers from the Western States. 11 One advantage is Florida's proximity to the Mississippi River, which provides direct ac- cess to the farming heartland of the United States, where much phosphate is used in the form of fertilizers. Extensive barge transshipment services that utilize the Mississippi and other rivers (fig. 5) are also available to the Florida producers. In addition, overland transportation costs to the eastern mar- kets and many of the midwestern markets are lower from Florida. From figure 6, which shows the rail transportation rates for selected interstate movements of phosphate rock, it is apparent that the overland distances and shipping costs to these markets are less from central Florida than from the western phosphate producing States. Moreover, Florida's phosphate rock mining production costs are lower than those of the western operations. Because of these cost advantages, Florida phosphate producers are able to furnish domestic consumers with some of the lowest cost fertilizer available. In 1976 the Corn Belt (which is identified in figure 7) ac- counted for 33 percent of U.S. phosphatic fertilizer con- sumption. The Northern Plains States, Great Lakes States, and Appalachian States together used 31 percent of the do- mestic supply. The Mississippi River and its tributaries pro- vide convenient, low-cost water transportation to these areas. Together with the Delta States and the Southern Plains States, 11 The major producers of phosphate rock among the Western States are Idaho, Montana, Utah, and Wyoming. these areas accounted for 75 percent of domestic phosphatic fertilizer consumption in 1976. Consumption shares for these and other U.S. regions are shown in figure 7. U.S. Supply and Demand U.S. phosphate rock production has increased steadily over time (fig. 8) and in 1978 reached an alltime high, as shown in table 28. Florida and North Carolina accounted for about 11 percent, and Tennessee accounted for 4 percent. The total value of marketable phosphate rock production from 1 960 to 1 977 is illustrated graphically in figure 9. The average unit values of this production (per metric ton) are listed in table 29 and are also shown graphically in figure 10. The Florida phosphate industry consists mainly of a rela- tively small number of large, vertically integrated companies that mine and beneficiate phosphate rock and also manu- facture fertilizers and related chemicals. Table 30 lists Flor- ida's phosphate rock producers, and these producers are located by reference numbers (as identified in the table) on the map in figure 1 1 . In 1977 Florida's 16 producers of phos- phate rock operated at between 85 and 97 percent of their production capacity. Table 31 lists companies that manufacture phosphate products, and figure 12 shows the location of their plants across the United States (again through the use of reference numbers). As shown in table 32, Florida's phosphatic fertilizer production capacity for 1 978 exceeded the total capacity of the rest of the Nation. In 1978 Florida operations had the capacity to produce 58.4 percent of the Nation's wet-process phosphoric acid, 50.3 percent of its ammonium phosphate, and 74.6 percent of its concentrated superphosphate. In addition to the 16 firms engaged in phosphate rock min- ing in Florida, 8 other firms mine phosphate rock in the United States. Some of these 24 companies operate in more than one State. There are four phosphate rock mining operations in Tennessee, five in Idaho, and one each in North Carolina, Utah, Alabama, and Montana. Phosphate rock mining op- erations in States other than Florida are listed in table 33, and their locations are shown (by reference numbers) in figure 11. In 1978 the value of U.S. phosphate rock production ex- ceeded $928 million, as shown in table 34. Approximately 88 percent of this production was processed by domestic com- panies into agricultural fertilizers at locations shown in table 31 and figure 12. The rest was used in animal feed, detergent manufacture, and miscellaneous applications, as shown in figure 13. A breakdown of domestic phosphate rock use in 1977 according to geographic area is shown in figure 14. Domestic demand for phosphate rock in 1978 was 35.9 million metric tons, as shown in table 35. Based on a projected annual growth rate of 2 to 3 percent, domestic demand by 1985 would be more than 45 million metric tons (20). It was estimated that fertilizer demand, the major factor in this pro- jected growth, will account for 85 percent of the domestic demand for phosphate rock in 1985. Florida phosphate rock production in 1985 was estimated at approximately 54 million metric tons, of which about 12 million tons is expected to be exported. Total U.S. exports of phosphate products, in phos- phate rock equivalence, were estimated at more than 26.5 million metric tons for 1978 (table 36). 23 LEGEND Capital ® City • Waterway / Figure 5.— Inland, intracoastal, and ocean water routes available for ship and barge movement of phosphate rock in the Eastern United States. 24 $14i /° ft fco/T ;SOUlM DAKOTA NlSCONSIN 16.78 dCX*" 1 , £17.04 w^>> $47.90 $15.18 13 TV f^ tfO ^ ^fe^ f\ ^J)"- 1 -^ ** v^ SOURCE: INTERSTA TE COMMERCE COMMISSION Figure 6.— Rail rates at ex parte 336 level for selected movements of phosphate rock (estimates based on rates per net short ton of rock). Income, Employment, and Output Taxes Input-output (1-0) multipliers were used to estimate the total nationwide impacts of the Florida phosphate industry on in- come, employment, and output. These multipliers were based on a national 1-0 table that included data for 404 industrial sectors. The results of this analysis are presented in table 37, which represents an expansion of the data presented in table 25 on the combined statewide impacts of Florida phosphate op- erations on income, employment, and output. Using the 1-0 multipliers, it was estimated that $391 million in indirect and induced income will be generated by the Florida phosphate industry outside the State in 1981; this would bring the na- tionwide total income generated by Florida phosphate op- erations to $838.5 million. Similarly, it was estimated that some 60,000 jobs outside the State will be attributable to the indirect and induced effects of the Florida phosphate industry in 1981, and the direct and indirect output expected to be generated by the Florida industry outside the State was pro- jected at $1.4 billion. Through addition of the State and rest- of-Nation estimates, it was estimated that on a national level the Florida phosphate industry in 1981 can be expected to account for 108,000 jobs and approximately $2,765 million in gross output. Estimates of the fiscal benefits expected to be associated with the Florida phosphate industry in 1981 are shown in table 38, based on 1977 dollars. It was previously estimated that the industry would pay out $99.6 million in Florida tax revenues (see the subsection, "State and County Tax Rev- enues.") In addition, Federal tax revenues and tax revenues to other States attributable to the Florida phosphate industry and related activities were estimated at $21 7 million for 1 981 . This means that a total of $31 6.6 million in Federal and State tax revenues can be expected to be generated by the Florida phosphate industry in 1981. PERSONAL INCOME TAXES Based on the assumption of an effective income tax rate of 7 percent, Federal personal income tax revenues of at least $58 million would be realized from the previously esti- mated $838.5 million (table 37) in income expected to be generated nationwide by the Florida phosphate industry in 1 981 . The 7 percent rate was based on the assumption that an employee would be married, have two children, and claim the standard deduction. Since Florida has no State personal income tax, there is no State tax revenue from phosphate 25 Figure 7.— Domestic use of phosphate as fertilizer, by region, in 1976 (percent of total). industry employees. However, personal income tax revenue to States other than Florida from income generated by the Florida phosphate industry was estimated at more than $2 million for 1981. Thus, the total Federal and State income tax contribution resulting from Florida phosphate industry activity in 1981 can be expected to be at least $60 million, as shown in table 38. CORPORATE INCOME TAXES A Federal corporate income tax rate of 4 percent of the total value of phosphate-related output was assumed for 1981 . By applying this rate to the $2,765 million projection of total output value expected to be generated by the Florida phos- phate industry in 1 981 (table 37), it was estimated that $1 1 0.6 million in Federal corporate income tax payments will result from the industry and its related activities in that year. State corporate income tax rates were calculated, based on U.S. Internal Revenue Service publications, to average about 0.85 percent of gross output. By applying this rate to total phos- phate-related output outside Florida, the estimated contri- bution of the Florida phosphate industry to other States' cor- porate income tax revenue was projected at about $1 2 million for 1981 . Therefore, total Federal and State corporate income tax revenue from the Florida phosphate industry and its re- lated activities for 1 981 was estimated at about $1 28.4 million. SALES AND PROPERTY TAXES Sales tax payments generated by the phosphate industry were estimated for States other than Florida by applying a rate of 0.31 percent (based on national averages of taxes paid) to the estimated total rest-of-Nation output of $1 ,405 million for 1981 (table 37). The resultant estimate of $4.4 million, together with the Florida sales tax estimate of $25 million for 1 981 (table 38), indicates that more than $29 million in State sales tax payments will be generated by the Florida phosphate industry and related activities in that year. Similarly, it was estimated that the industry and its related activities in 1981 will generate $20 million in Florida ad va- lorem property taxes and $30 million in ad valorem property taxes paid to other States (or divisions thereof), or $50 million in total ad valorem property taxes nationwide (table 38). Effects on U.S. Balance of Payments It was estimated that by 1981 the Florida phosphate in- dustry could make an annual positive contribution to the U.S. balance of payments of approximately $961.8 million. A breakdown of this estimate is shown below (based on the assumption that there will be no increase in price for the products listed). 26 z g o D Q O cc a. 22 r- 1960 1965 1970 1977 Figure 8.— Geographic breakdown of marketable phos- phate rock production in the United States, 1960-77. k. JO "5 ■o CM l>. en 900 r- 800 - 700 - 600 500 400 300 > 200 100 ^y Florida '-*.._ ._/ (includes North Carolina 1964 72) Western States Tennessee vvesxern csiaies # j» "li-rfi i i i rrfft-m-n 1960 1965 1970 1977 » k. (0 o ■o CM en O H U cc cc Hi (L 111 D _l < > 1960 1965 1970 1977 Figure 9. — Value of U.S. marketable phosphate rock pro- duction, by geographic area, 1960-77. Figure 10.— Average value of U.S. marketable phosphate rock production, by geographic area, 1960-77. Exports of phosphate rock 510.0 Exports of phosphatic fertilizer 500.0 Imports of sulfur - 53.5 Potential reduction of fluorine imports 5.3 Total (net) 961.8 Included in this estimate is the positive effect of exports of Florida phosphate rock and agricultural chemicals and the negative effect of imports of sulfur to Florida for sulfuric acid production. Also included is the value of fluosilicic acid pro- duced in Florida, which reduces U.S. imports of fluorspar by a proportional amount. In 1 978 the United States exported a total of 20,890,000 metric tons of phosphate rock and fertilizer products valued at more than $1 .3 billion. Of this total, 95 percent was from Florida (including a small amount from North Carolina). In- cluded in this total were ammonium phosphates valued at $579.8 million; triple superphosphates worth $143.2 million; natural phosphate fertilizer, $25.6 million; Florida land pebble, $341.1 million; wet-process phosphoric acid (P 2 5 ), $91.9 million; and smaller amounts of other fertilizers. Exports of phosphate products from Florida were valued at more than $1.0 billion in 1978. Total exports of phosphate rock from Florida alone for 1 981 were projected at 17 million metric tons. Assuming an av- erage export price for the first half of 1979 of $24.55 per metric ton, f.o.b. Port of Tampa, Florida phosphate rock ex- ports in 1981 would be worth approximately $510 million. If it is further assumed that exports of phosphate fertilizers from Florida ports in 1981 will be worth $500 million, the total value of Florida's exports of phosphate products (phosphate rock plus fertilizers) would be more than $1 billion in 1981. Florida ranks first in the United States in sulfuric acid pro- 27 Table 28.— Marketable production of phosphate rock in the United States, by geographic area, 1960-78 Producing area Quantity, thousand metric tons Value, thousand (constant 1972) dollars Value, thousand (current) dollars 1960: Florida Tennessee Western States' ... 12,519 1,970 3,309 119,974 22,457 28,413 82,386 15,421 19,511 U.S. total 2 17,789 170,843 117,318 1961: Florida 14,011 2,271 2,575 139,104 26,915 22,620 96,371 Tennessee Western States' ... 18,647 15,671 U.S. total 2 18,857 188,639 130,689 1962: Florida Tennessee Western States' ... 14,173 2.457 3,064 136,189 27.943 29,103 96,081 19,714 20,532 U.S. total 2 19,693 193,235 136,327 1963: Florida Tennessee Western States' ... 14,826 2,390 2,957 143,136 25,093 28,096 102,471 17,964 20,114 U.S. total 2 20,173 196.325 140,549 1964: Florida 3 Tennessee Western States' ... 17.389 2,480 3,460 167,663 26,058 30,371 121,908 18,947 22,083 U.S. total 2 23,329 224,093 162,938 1965: Florida 4 19,562 2,679 4,463 190,067 30,00 39,268 141,258 Tennessee Western States' ... 22,296 29,184 U.S. total 2 26.704 259,334 192,738 1966: Florida 4 27,059 2,835 5,527 254,171 31,118 54,851 195,102 Tennessee Western States' ... 23,886 42,104 U.S. total 2 35,420 340,141 261,092 1967: Florida 4 28,948 2,714 4,416 262,956 28,564 45,037 207,788 Tennessee Western States' ... 22,571 35,588 U.S. total 2 36,079 336,557 265,947 1968: Florida 4 29,966 2,857 4,599 234,127 28,616 40,870 193,319 Tennessee Western States' ... 23,628 33,746 U.S. total 2 37,422 303,611 250,692 1969: Florida 4 27,152 2,970 4,101 185,398 21,780 33,469 160,777 Tennessee 5 Western States' ... 18,888 29,024 U.S. total 2 34,224 240,647 208,689 Producing area Quantity, thousand metric tons Value, thousand (constant 1972) dollars Value, thousand (current) dollars 1970: Florida 4 28,375 2,869 3,898 174,006 16,919 31,521 158,972 Tennessee 5 Western States' ... 15,457 28,789 U.S. total 2 35,143 222,437 203,218 1971: Florida 4 Tennessee Western States' ... 29,167 2,332 3,778 174,706 12,655 24,916 167,753 12,151 23,924 U.S. total 2 35,277 212,277 203,828 1972: Florida 4 30,954 1,954 4,132 173,910 10,732 23,268 173,910 Tennessee Western States' ... 10,732 23,268 U.S. total 2 37,040 207,910 207,910 1973 Florida 4 31 ,232 2,279 4,716 181,147 12,097 32,338 191,654 Tennessee Western States' ... 12,799 34,214 U.S. total 2 38,226 225,583 238,667 1974: Florida 4 33,548 2,187 5,711 352,507 15,915 63,769 408,979 Tennessee Western States' ... 18,465 73,985 U.S. total 2 41 ,446 432,192 501,429 1975: Florida 4 Tennessee Western States' ... 36,922 2,078 5,284 786,750 22,653 73,165 1,000,352 28,803 93,029 U.S. total 2 44,285 882,567 1,122,184 1976: Florida 4 ■-.. 37,697 1,634 5,340 648,245 10,860 50,647 867,092 Tennessee Western States' ... 14,527 67,746 U.S. total 2 44,671 709,753 949,365 1977: Florida 4 40,575 1,747 4,934 507,304 10,065 62,856 718,393 Tennessee Western States' ... 14,253 89,011 U.S. total 2 47,256 580,225 821,657 1978: Florida 4 _ 43,258 1,709 5,070 537,290 9,236 64,178 817,165 Tennessee Western States 6 ... 14,047 97,608 U.S. total 2 50,037 610,704 928,820 ' Includes Arkansas (1 963-66 and 1 973-77), California (1 968-70 and 1 973-77), Idaho, Missouri, Montana, Utah, and Wyoming. 2 Data may not add to totals shown because of independent rounding. 3 Includes North Carolina production of approximately 6,350 metric tons. 4 Includes North Carolina. 5 Includes Alabama. s Includes Alabama, Utah, Wyoming, Montana, and Idaho (1978). duction, most of which is captive production for the phosphate industry. In 1978 the Florida phosphate industry consumed 775,949 metric tons of imported sulfur. Using the 1978 year- end value of sulfur of $69 per ton, these imports represented a $53.5 million negative contribution to the U.S. balance of payments. This negative contribution is chargeable to the Florida phosphate industry, since this sulfur would not have to be imported if the Florida phosphate industry did not exist. If conditions remain basically the same, $53.5 million can also be expected to represent the value of sulfur imports for the phosphate industry in 1981. Fluorine in the form of fluosilicic acid is recovered from phosphoric acid plants in Florida and in other States from Florida phosphate rock. Fluorine has metallurgical applica- 28 Table 29.— Average values of marketable phosphate rock production in the United States, by geographic area, 1960-78 Value per metric ton Constant 1 1972 Current Producing area dollars dollars 1960: Florida __ .-- 9.58 6.58 Tennessee 11.40 7.83 Western States 2 ... 8.59 5.90 U.S. average 9.60 6.59 1961: Florida 9.93 6.88 Tennessee 11.85 8.21 Western States 2 .. 8.76 6.08 U.S. average 10.00 6.93 1962: Florida 9.61 6.78 Tennessee 11.37 8.02 Western States 2 ... 9.50 6.70 U.S. average 9.81 6.92 1963: Florida 9.65 6.91 Tennessee 10.50 7.52 Western States 2 ... 9.50 6.80 U.S. average 9.74 6.97 1964: Florida 3 9.64 7.01 Tennessee 10.51 7.64 Western States 2 .. 8.77 6.38 U.S. average 9.61 6.99 1965: Florida 3 9.71 7.22 Tennessee 11.19 8.32 Western States 2 .. 8.80 6.54 U.S. average 9.71 7.22 1966: Florida 3 9.39 7.21 Tennessee __ 10.97 8.42 Western States 2 ... 9.91 7.61 U.S. average 9.60 7.37 1967: Florida 3 9.08 7.18 Tennessee 10.52 8.31 Western States 2 ... 10.20 8.06 U.S. average 9.34 7.37 1968: Florida 3 7.82 6.45 Tennessee 10.01 8.27 Western States 2 ___ 8.90 7.34 U.S. average 8.11 6.70 1969: Florida 3 6.82 5.92 Tennessee 4 _ 7.33 6.36 Western States 2 ... 8.16 7.08- U.S. average 7.03 6.10 Value per metric ton Constant 1 1972 Current Producing area dollars dollars 1970: Florida 3 6.13 5.60 Tennessee" 5.90 5.39 Western States 2 ... 8.08 7.39 U.S. average 6.34 5.79 1971: Florida 3 6.00 5.75 Tennessee .. 5.43 5.21 Western States 2 6.60 6.34 U.S. average 6.02 5.78 1972: Florida 3 5.62 5.62 Tennessee 5.49 5.49 Western States 2 ... 5.63 5.63 U.S. average 5.61 5.61 1973: Florida 3 5.81 6.14 Tennessee 5.40 5.71 Western States 2 ... 7.60 7.18 U.S. average 5.90 6.24 1974: Florida 3 10.41 12.07 Tennessee 7.51 8.71 Western States 2 ... 11.48 13.32 U.S. average 10.43 12.10 1975: Florida 3 _._ 21.21 26.96 Tennessee 10.84 13.78 Western States 2 .__ 13.56 17.24 U.S. average 19.93 25.34 1976: Florida 3 17.09 22.85 Tennessee 6.61 8.85 Western States 2 ... 10.24 13.69 U.S. average 15.88 21.25 1977: Florida 3 13.81 19.55 Tennessee 6.35 8.99 Western States 2 ... 13.77 19.49 U.S. average 12.45 17.61 1978: Florida 3 12.42 18.89 Tennessee 5.40 8.22 Western States 5 ... 12.66 19.25 U.S. average 12.20 18.56 1 Constant dollar values have been rounded to nearest hundredth. 2 Includes Arkansas (1963-66), California (1968-70), Idaho, Montana, souri (1973-77), Utah, and Wyoming. 3 Includes North Carolina. 4 Includes Alabama. 5 Includes Alabama, Idaho, Montana, Utah, and Wyoming (1978). Mis- tions as well as uses in the ceramics and chemical manu- facturing industries. Recovery of fluosilicic acid from phos- phoric acid plants in 1978 was estimated at 70,000 metric tons. At an average value of $80 per ton, this means that $5.6 million worth of fluosilicic acid was produced. In 1978 U.S. imports of fluorspar totaled 1 .0 million metric tons, which represented about 80 percent of the Nation's fluorine require- ments. This total would have been larger by a value of $5.6 million were it not for Florida's byproduct production of fluos- ilicic acid. Thus $5.6 million in byproduct fluosilicic acid pro- duction was a positive contribution to the U.S. balance of payments because this acid would have had to have been imported if it had not been produced domestically. Impact on the Domestic Sulfur Industry The Florida phosphatic fertilizer industry consumes about one-half of all U.S. sulfur production, in addition to its con- sumption of imported sulfur. In 1978 the State's phosphatic fertilizer industry consumed approximately 5.8 million metric tons of domestic sulfur, and it was estimated that in 1981 this consumption would reach a level of about 6.0 million metric tons. This means that at a sulfur price of $80 per ton, the Florida fertilizer industry would purchase $480 million of domestic sulfur in 1981. Also, the Frasch sulfur industry, which mines sulfur using 29 Table 30.— Florida phosphate rock producers Commodity, company, and address Map reference number (as shown in figure 11) Number of mines (all open pit) County LAND PEBBLE Agrico Chemical Co. Pierce, Ra. 33867 1, 3 3 Polk. Bordon Chemical Co. Box 790 4 1 Hillsborough. Plant City, Fla. 33566 Brewster Phosphate Co. Bradley, Fla. 33835 5 2 Do. C. F. Industries, Inc. Box 1480 Bartow, Fla. 33830 14 1 Hardee. Gardinier, Inc. Box 3269 Tampa, Fla. 33601 6 1 Polk. International Minerals & Chemical Co. Box 867 Bartow, Fla. 33830 9, 11 3 Do. Mobile Chemical Co. Box 311 Nichols, Fla. 33863 12, 13 2 Do. Occidental Petroleum Corp., Suwannee River Phosphate Div. Box 300 White Springs, Fla. 32096 21, 22 2 Hamilton. Swift Chemical Corp. Box 208 Bartow, Fla. 33830 13 2 Polk. T. A. Minerals Corp. Pierce, Fla. 33867 16 1 Do. U.S.S. Agri-Chemicals, Inc. Fort Mead, Fla. 33841 15 1 Do. W. R. Grace & Co. Box 471 Bartow, Fla. 33830 7,8 2 Do. SOFT ROCK Howard Phosphate Co. Box 13800 Orlando, Fla. 32809 19,20 1 Citrus. Kellogg Co. Box 200 Hernando, Fla. 32642 17 1 Do. Loncala Phosphate Co. Box 766 High Springs, Fla. 32643 23 1 Gilchrist, Marion. Manko Co., Inc. Box 557 Ocala, Fla. 32670 18 1 Citrus. a hot-water melting process, is heavily dependent on the Florida fertilizer industry. Uranium Recovery from Wet-Process Phosphoric Acid At the 1 978 production cost of less than or equal to $1 6.50 per metric ton, phosphate rock reserves in the central Florida region were estimated to total 340 million metric tons. It has been estimated that these reserves contain between 0.01 and 0.02 percent uranium oxide (U 3 O e ), which can be re- covered as byproduct uranium from wet-process phosphoric acid plants. Several companies have shown interest in re- covering this resource. As is the case with any byproduct recovery, the potential U 3 8 resources available as a byproduct of wet-process phosphoric acid are limited by the primary production sched- ule. This means that if the price of phosphate rock increases, the amount of available reserves will also increase with a potentially commensurate increase in U 3 8 recovery, assum- ing that the then-available reserves contain economically re- coverable U 3 8 . However, any delays in installing byproduct recovery plants would be expected to cause a corresponding loss in U 3 8 resources. Assuming a U 3 8 content of 0.012 percent for all central Florida phosphate rock, total U 3 8 reserves in the 340 million metric tons of rock would be 40,800 tons. At an overall re- covery factor of 86 percent (95 percent from phosphoric acid production and 90 percent from the byproduct recovery plant), about 34,884 metric tons of U 3 8 could be recovered from wet-process phosphoric acid at a production cost of about $20 per pound, including a 20-percent return on invested capital. This cost, which is substantially lower than the 1978 market price for U 3 8 of more than $40 per pound, indicates the economic attractiveness of U 3 8 byproduct production from wet-process phosphoric acid. The total value of poten- tially recoverable U 3 8 , assuming 34,884 metric tons of re- sources and a spot price at yearend 1977 of $42 per pound of U 3 8 , would be approximately $3.23 billion. If in 1981 the price of U 3 8 is higher than the $42-per-pound price which has been estimated for that year, the value of this resource would rise accordingly. The technology for U 3 8 recovery appears feasible, and the economic considerations make expanded commercialization of this uranium production an attractive prospect. In 1 976 Uranium Recovery Corp. (URC) installed a uranium recovery module at the W. R. Grace & Co. plant near Bartow, Fla. From this plant, concentrated stripped solution is shipped to URC's central processing plant near Mulberry, Fla., where yellowcake (certain uranium concentrates produced by mills) is recovered from the solution. Wyoming Mineral Corp., a subsidiary of Westinghouse Electric Corp., has constructed a uranium oxide recovery facility at Farmland Industries' phosphoric acid complex, also near Bartow. The facility went onstream in August 1 978, and plans were to recover about 450,000 pounds of U 3 8 per year. Several additional companies announced plans in 1978 to recover U 3 8 from wet-process phosphoric acid and to build recovery facilities. One of these, International Minerals and Chemicals Corp., planned to recover 1.2 million pounds of U 3 8 annually from C.F. Industries' two wet-process phos- phoric acid plants in Polk and Hillsborough Counties and an additional 600,000 pounds per year from its own New Wales chemical plant in Polk County. 30 Table 31 . — Domestic phosphate rock consumers Company City and State Map reference number (as shown in figure 12) Products manufactured Agrico-Chem-Williams Borden Chemical Co. . C. F. Industries Inc. Englehard M&C-Con. Serve Inc. . Farmland Industries Gardinier, Inc. W. R. Grace & Co. Homes International Minerals & Chemical Corp. Mobil Chemical Co. C. F. Industries Inc. Royster Co. Stauffer Chemical Co. U.S.S. Agri-Chemicals U.S.S. Agri-Chemicals Occidental Agri-Chemicals Texasgulf Inc. Stauffer Chemical Co. Hooker Chemical Co. Monsanto Industrial Chemicals Co. Tennessee Valley Authority U.S.S. Agri-Chemicals Mississippi Chemical Corp Beker Industries Corp. .. Allied Chemical Corp. .. Freeport Minerals Gardinier, Inc. W. R. Grace & Co. Farmland Industries First Mississippi Corp. .. Beker Industries Corp. __ Olin Corp. Mobil Chemical Co. Farmland Industries Nipak, Inc. Olin Corp. Phosphate Chemical ... El Paso Products Valley Nitrate Producers Stauffer Chemical Co. .. F.M.C. Corp. Monsanto Industrial Chemicals Co. J. R. Simplot Beker Industries Corp. Gulf Resources Stauffer Chemical Co. Duval Corp. Kaiser Steel Collier Carbon & Chemical Agrico Chem-Williams Borden Chemical Co. C.F. Industries Inc. Grace and U.S.S. Agri-Chemicals ._ Occidental Agricultural Chemical Co. Valley Nitrogen Products . .. Do. Pierce, Fla. Piney Point, Fla. Bartow, Fla. Nichols, Fla. Pierce, Fla. Tampa, Fla. Bartow, Fla. Pierce, Fla. Bonnie, Fla. Nichols, Fla. . Bonnie, Fla. . Mulberry, Fla. Tarpon Springs, Fla. Ft. Meade, Fla. Bartow, Fla. White Springs, Fla. Lee Creek, N.C. ... Columbia, Tenn. ... ....Do. ....Do. Muscle Shoals, Ala. Cherokee, Ala. Pascaquela, Miss. . Taft, La. Geismar, La. ... Uncle Sam, La. . Helena, Ark. Joplin, Mo. ....Do. Ft. Madison, La. Marseilles, III. ... Joliet, III. Depue, III. Lawrence, Kans. Kerens, Tex. ... Pasadena, Tex. ....Do. Odessa, Tex. ... Chandler, Ariz. . Garfield, Utah .. Pocatello, Idaho Soda Springs, Idaho Pocatello, Idaho Conda, Idaho ... Kellogg, Idaho .. Silver Bow, Mont. Hanford, Calif. .. Fontana, Calif. .. Pittsburg, Calif. . Donaldsville, La. Streator, III. Hardee City, Fla. Bartow, Fla. Lathrop, Calif. .. Helm, Calif. Bena, Calif. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 26 27 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 45 46 47 48 49 50 51 52 53 Wet-process phosphoric acid, ammonium phosphate. Wet-process phosphoric acid, ammonium phosphate, concentrated superphosphate. Do. Do. Do. Do. Do. (Idle plant.) Wet-process phosphoric acid, ammonium phosphate, concentrated superphosphate. (Idle plant.) Wet-process phosphoric acid, ammonium phosphate. Wet-process phosphoric acid, ammonium phosphate, concentrated superphosphate. (Idle plant.) Wet-process phosphoric acid, concentrated super- phosphate. Ammonium phosphate. Wet-process phosphoric acid, ammonium phosphate, concentrated superphosphate. Do. Elemental phosphorus. Do. Agricultural chemicals. Elemental phosphorus. Ammonium phosphate. Wet-process phosphoric acid, concentrated super- phosphate. Wet-process phosphoric acid, ammonium phosphate. Do. Wet-process phosphoric acid. Do. Concentrated superphosphate. (Idle plant.) Wet-process phosphoric acid, ammonium phosphate. (Idle plant.) Wet-process phosphoric acid. Wet-process phosphoric acid, ammonium phosphate. (Idle plant.) Ammonium phosphate. Wet-process phosphoric acid, ammonium phosphate. (Idle plant.) Do. Do. Wet-process phosphoric acid, ammonium phosphate, concentrated superphosphate. Elemental phosphorus. Do. Wet-process phosphoric acid, ammonium phosphate, concentrated superphosphate. Do. Wet-process phosphoric acid, ammonium phosphate. Elemental phosphorus. Wet-process phosphoric acid. (Idle plant.) Wet-process phosphoric acid. Wet-process phosphoric acid, ammonium phosphate. Wet-process phosphoric acid. Do. 2 Wet-process phosphoric acid. 3 Wet-process phosphoric acid. Wet-process phosphoric acid, ammonium phosphate. Wet-process phosphoric acid. 1 Recent additions to this table; not shown on map in figure 12. 2 Plant planned. 3 Plant under construction. 31 Western phosphate rock includes Montana, Utah, Idaho, and Wyoming-90% consumed dome tically and 10% exported. Tennessee i phosphate rock- all domestically consumed. Florida and North Carolina phosphate rod 69% consumed domestically ai 31% exported. Figure 11.— Location of phosphate rock production (blackened areas) in the United States, 1977. (Reference numbers, identified in table 30 and 33, indicate locations of individual phosphate rock producers.) Table 32. -Phophate fertilizer production capacity in Florida, 1978 (Thousand metric tons P 2 5 ) Company Plant location Phosphoric acid, wet-process Ammonium phosphate Concentrated superphosphate Agrico Chemical-Williams Pierce, Fla Piney Point, Fla. „ Bonnie, Fla. Plant City, Fla. 247 159 626 567 136 413 494 345 299 680 526 122 NAp 160 75 77 576 249 109 163 227 NAp 95 227 275 73 125 NAp 250 Borden Chemical Co. 30 C. F. Industries Inc NAp Do. 340 Engelhard M & C-Con. Serve Inc Nichols, Fla. Pierce, Fla. Tampa, Fla. Bartow, Fla. .... Do. _ _ 117 Farmland Industries 79 Gardinier, Inc. Grace & U.S.S. Agri-Chemicals, Inc. 340 NAp W. R. Grace & Co. - 290 International Minerals & Chemical Co. Bonnie, Fla. White Springs, Fla. Mulberry, Fla. _ 125 Occidental Agricultural Chemical Co. 71 Royster Co. 88 U.S.S. Agri-Chemicals, Inc. Bartow, Fla. Fort Meade, Fla NAp Do. 110 Total 4,799 2,272 1,841 NAp Not applicable. Source: National Fertilizer Development Center (13). 32 Table 33. — Phosphate rock producers in States other than Florida Map reference number for production location (as shown in figure State, company, and address 11) Type of activity Production location county Alabama: Monsanto Industrial Chemical Co. 31 1 open pit mine Limestone, Ala. Box 5523 Denver, Colo. 80217 Idaho: Conda Partnership 36 ....do Caribou, Idaho. Box 37 Conda, Idaho 83230 Monsanto Industrial Chemical Co. 37 ...do Do. Box 816 Soda Springs, Idaho 83276 J. R. Simplot Co., Fertilizer Div. 35 2 open pit mines Bingham and Caribou. Box 912 Pocatello, Idaho 83201 Stauffer Chemical Co. 38 1 open pit mine Caribou, Idaho Star Route Randolph, Utah 84064 Montana: Cominco American, Inc. 33,34 2 underground mines Powell. Garrison, Mont. 59731 North Carolina: * Texasgulf, Inc. 24 1 open pit mine Beaufort, N.C. Box 48 Aurora, N.C. 27806 Tennessee: Hooker Chemical Co. 25, 26 Open pit mines Hickman, Tenn. Box 591 Columbia, Tenn. 38401 Monsanto Industrial Chemical Co. 27-29 —.do .... Giles, Hickman, Maury, and William- Columbia, Tenn. 38401 son, Tenn. Stauffer Chemical Co. 30 — do Maury, Tenn. Mt. Pleasant, Tenn. 38474 Utah: Stauffer Chemical Co. 32 1 open pit mine Uintah, Utah Manila Star Route Vernal, Utah 84078 Table 34.— U.S. phosphate rock production, consumption, sales, and exports; and world production 1973 1974 1975 1976 1977 1978 United States: Mine production thousand metric tons— Marketable production do... Value thousands... Average value per metric ton... Sold or used by producers thousand metric tons... Value thousands... Average value per metric ton... Imports for consumption 1 thousand metric tons... Value thousands... Average value per metric ton... Exports 2 thousand metric tons. .. P 2 5 content do... Value thousands- Average value per metric ton... Consumption, apparent 3 ..thousand metric tons... World: Production do... ' Revised. 1 U.S. Department of Commerce, Bureau of the Census data. 2 Exports as reported by companies to the Bureau of Mines. 3 Quantity sold or used by producers plus imports minus exports. 126,746 38,226 $238,667 $6.24 40,862 $254,846 $6.24 59 $1,288 $21.85 12,587 4,084 $82,983 $6.59 28,334 98,723 141,382 41,446 $501,429 $12.10 43,940 $529,141 $12.04 165 $8,999 $54.51 12,607 4,053 $194,015 $15.39 31,497 109,987 170,112 44,285 $1,122,184 $25.34 42,129 $1,052,995 $24.99 35 $1,604 $48.31 11,133 3,588 $429,222 $38.56 31,028 107,278 154,309 44,671 $949,365 $21.25 40,530 $857,189 $21.15 46 $2,209 $52.60 9,453 3,023 $272,823 $28.91 31,142 107,616 166,893 47,256 $821,657 $17.39 47,437 $829,084 $17.48 158 $6,079 $38.47 13,230 4,251 $288,603 $21.81 34,365 116,000 173,429 50,037 $928,820 $18.56 48,774 $901,378 $18.56 908 $24,379 $26.85 '12,870 '4,118 $297,357 $23.10 ' 36,812 125,000 Figure 12.— Location of phosphate rock consumers in the United States, 1977. (Companies corresponding to map reference numbers are listed in table 31.) Byproduct Fluorine Production Fluorine is principally recovered from the mineral fluorite, commonly known as fluorspar. At extrapolated rates of con- sumption, all known fluorspar deposits in the world are ex- pected to be depleted before the end of the century. In that event, the world's fluorine supply would have to be derived from newly discovered deposits or from phosphate rock. It has been estimated that fluorine resources in phosphate rock are adequate to satisfy world demand well into the next cen- tury (78). Fluorine is necessary to produce aluminum, steel, and many chemical compounds. Fluorine demand more than doubled during the 1960-70 period, reflecting strong growth in the aluminum, chemical, and steel sectors. In 1 976 the aluminum industry accounted for 20.2 percent of U.S. fluorine con- sumption, or 102,512 metric tons. Consumption by the fluor- carbon industry is difficult to estimate because of a scarcity of data. Practically all fluorine usage is in the form of acid, metallurgical, and ceramic grades of fluorspar. In 1978 the United States produced about 20 percent of its fluorine requirements and 5 percent of world production. It consumed about 30 percent of the world supply. Apparent U.S. consumption was approximately 550,000 metric tons in 1978 and is forecast to be 3.5 times this quantity, or 1.65 million metric tons, in the year 2000. A straight-line projection of domestic production over the last 20 years indicates that only about 137,892 metric tons will be produced in the year 2000. However, it is expected that imports and the domestic recovery of fluorine from phosphatic fertilizer production will make up for the apparent difference between domestic con- sumption and production for the year 2000. The largest known source of fluorine in the United States is in phosphate rock deposits. Florida phosphate rock con- tains from 3 to 4 percent fluorine. Recovery of fluorine from FERROPH0SPH0RUS NORMAL SUPERPHOSPHATE OTHER Figure 13.— Generalized U.S. phosphate rock use pat- tern. 34 Table 35.— Phosphate rock sold or used by producers, by use and by geographic area, 1973-78 (Thousand metric tons) Year Florida and North Carolina Tennessee Western States Total United States 1 and use Rock p 2 o 5 content Rock PA content Rock PA content Rock P 2 5 content 1973: Domestic: Agricultural Industrial 21,501 W 6,732 W 14 2,403 4 630 1,531 W 494 W 23,046 5,229 7,229 1,362 Total Exports 1 _ 21,501 W 6,732 W 2,418 634 1,531 W 494 W 28,275 12,587 8,591 4,084 Total 2 33,490 10,632 2,418 634 4,955 1,408 40,862 12,675 1974: Domestic: Agricultural Industrial 24,150 W 7,504 W 2,365 642 1,806 W 580 W 25,956 5,376 8,084 1,422 Total Exports 1 24,150 W 7,504 W 2,365 642 1,806 W 580 W 31 ,322 12,607 9,505 4,053 Total 2 36,215 11,390 2,365 642 5,360 1,527 43,940 13,559 1975: Domestic: Agricultural Industrial 23,947 354 7,411 104 2,171 560 1,902 2,622 608 676 25,849 5,146 8,018 1,340 Total Exports ' 24,301 10,102 7,515 3,275 2,171 560 4,524 1,031 1,283 313 30,996 11,133 9,358 3,588 Total 2 34,401 10,790 2,171 560 5,556 1,597 42,129 12,946 1976: Domestic: Agricultural Industrial 24,729 409 7,631 120 1,731 448 1,651 2,575 524 661 26,380 4,716 8,156 1,229 Total Exports 1 25,138 8,783 7,750 2,825 1,731 448 4,227 651 1,187 197 31 ,096 9,435 9,385 3,023 Total 2 33,921 10,576 1,731 448 4,878 1,383 40,530 12,408 1977: Domestic: Agricultural Industrial __ 27,901 334 8,637 98 1,723 436 2,222 2,026 716 523 30,123 4,084 9,353 1,056 Total Exports 1 28,235 12,759 8,735 4,108 1,723 436 4,248 471 1,239 143 34,207 13,230 10,409 4,251 Total 2 40,994 12,843 1,723 436 4,719 1,382 47,437 14,660 1978: Domestic: Agricultural Industrial ' 29,314 291 r 8,998 84 1,688 434 2,018 2,592 646 668 '31,332 4,571 '9,644 1,186 Total 2 Exports' ' 29,605 r 1 1,810 ' 9,082 '3,785 1,688 434 4,611 1,060 1,314 333 '35,904 '12,870 '10,830 '4,118 Total 2 _ 41,415 12,867 1,688 434 5,671 1,647 48,774 14,948 ' Revised. W Withheld to avoid disclosing company proprietary data. 1 Exports as reported by companies to the Bureau of Mines. 2 Data may not add to totals shown because of independent rounding. Table 36. — U.S. exports of phosphate products and phosphate rock equivalence, 1978 1 (Metric tons) Data from the U.S. Department of Commerce, Bureau of the Census (37), adjusted by the Bureau of Mines. 35 Product Quantity exported P 2 5 content Mined rock equivalent Phosphate, crude apatite 13,692,603 3,929,076 1,523,161 1,462,002 459,278 198,674 117,509 88,759 43.987 32,144 25,269 23,021 20,580 4,244,707 1,807,375 822,507 672,521 101,041 29,801 23,502 62,131 4,839 6,429 7,581 3,453 47,157 13,692,603 Diammonium phosphate Phosphoric acid, fertilizer grade Triple superphosphate Ammonium phosphate Mixed chemical fertilizer 6,679,429 2,894,006 2,339,203 321,495 99,337 Calcium phosphate 82,256 Phosphoric acid, thermal grade Sodium tnpolyphosphate Normal superphosphate 204,146 17,595 22,501 Phosphate chemical fertilizer 25,269 Other sodium phosphates Elemental phosphorus 11,511 185,220 Total 21,616,063 7,833,044 26,574,561 Idaho, Montana, Utah, and Wyoming Florida and North Carolina Figure 14.— Phosphate rock sold or used by producers, by use and by geographic area, 1977. Tennessee KEY Agriculture Industrial uses Exports Table 37.— Projected income, employment, and output value for the Florida phosphate industry in 1981 Florida Rest of Nation National total Output value, million 1977 dol- lars: Direct 870 490 405 1,000 1,275 Indirect 1,490 Total 1,360 1,405 2,765 Employment, number of jobs: Direct 12,554 10,331 25,614 NAp 15,478 44,900 12,554 Indirect .__ 25,809 Induced 70,514 Total 48,499 60,378 108,877 Income, million 1977 dollars: Direct _ 167.3 105.8 174.4 NAp 988 292.3 167.3 Indirect Induced - 204.6 466.7 Total 447.5 391.0 838.5 Table 38.— State, local, and Federal tax revenues associated with the Florida phosphate industry, projections for 1981 (Million 1977 dollars) Tax Florida Rest of Nation National total Federal and State personal income tax .__ Federal corporate income tax NAp NAp 5.8 48.5 .3 25.0 20.0 60.0 122.6 NAp NAp NAp 4.4 30.0 60.0 122.6 Florida corporate income tax 5.8 Florida severance tax 48.5 Florida motor fuel tax .3 State sales taxes _ _ 29.4 Local property taxes _-- 50.0 Total -- 99.6 217.0 316.6 NAp Not applicable. NAp Not applicable 36 phosphatic fertilizer operations was not economic in the past, but because of recent, relatively high, stable prices, fluorine is now economically recovered from wet-process phosphoric acid plants. Also, as a result of a U.S. Environmental Pro- tection Agency promulgation, this recovery is now required by law. Two large fertilizer producers in Florida, United States Steel Corp's. Agri-Chemical Div. and Farmland Industries, are supplying fluosilicic acid, a former waste product, to Alu- minum Can Co. of America (Alcoa) and Kaiser Aluminum and Chemical Corp. for the manufacture of synthetic cryolite and aluminum fluoride. In addition, 1 2 phosphoric acid plants sup- plemented domestic supplies of fluorine with about 54,431 metric tons of fluosilicic acid in 1977, or the equivalent of about 90,718 metric tons of fluorspar. Fluosilicic acid production from Florida is expected to reach 70,000 tons per year by 1985. Therefore, based on a value of $1 00 per ton of fluosilicic acid and assuming the productive life of the State's phosphate rock deposits to be at least 20 years, Florida's total byproduct fluosilicic acid production would have a value of $140 million (in constant 1977 dollars) in 2005. 37 IMPORTANCE OF PHOSPHATE FERTILIZER TO THE AGRICULTURAL SECTOR Phosphate fertilizers are derived from the mining and treat- ment of phosphate rock. Treatment of the phosphate rock makes the phosphate soluble and available to growing plants. Phosphorus is required by all living plant and animal cells. Consequently, soils with deficiencies of available phosphorus produce only limited crop yields. Although it is not required in large amounts, the absence or near absence of phosphorus is calamitous to crop growth. A handbook published by the fertilizer industry (70) states that phosphorus "must be pre- sent in adequate amounts in living cells before cell division will take place ... It also has many vital functions in photo- synthesis utilization of both sugar and starches, and in energy transfer processes." Because phosphorus is depleted from the soil as agricul- tural production continues, a like amount must be returned to the soil in order to maintain an acceptable level of pro- ductivity. Phosphate fertilizer must be used to replenish the level of phosphorus pentoxide (P 2 5 ) in the soil since there is no substitute for phosphorus as a plant nutrient, and sub- stantial quantities of soluble phosphorus are derived only from phosphate rock. Approximately 88 percent of all phos- phate rock consumed in the United States is utilized in the production of phosphate fertilizer. Use in Agriculture Of the phosphate rock mined in Florida that is not shipped directly to export markets, more than 95 percent is used to produce agricultural chemicals, that is, fertilizers or animal feed supplements. Historically, four major crops have ac- counted for approximately 62 percent of U.S. phosphatic fer- tilizer consumption; these crops are corn for grain. 12 cotton, soybean for beans, 12 and wheat. The use of phosphatic fer- tilizer for oats, barley, hay, and pasture accounts for another 20 percent of U.S. consumption. The Corn Belt States are by far the largest consumers of phosphatic fertilizer in the United States, as previously shown in figure 7. CORN FOR GRAIN The single largest use of fertilizer in the United States is for growing corn. Almost 68 million acres of corn for grain was harvested in the United States in 1978. Approximately 39 percent of the P 2 5 used in the United States in the 1978 fertilizer year was used to produce corn for grain. In 1978 the U.S. Department of Agriculture (USDA) sur- veyed 1 7 States to collect data on fertilizer use for corn crops. The survey accounted for 91 percent of the total acreage of corn harvested for grain in the United States. Of the fields surveyed in 1978, a total of 95 percent received some fertil- izer; the previous year's total was 96 percent. The proportion of corn acreage receiving P 2 5 remained steady from 1 977 to 1978, at 87 percent. 12 Category used by the U.S. Department of Agriculture for the collection of data pertaining to fertilizer use. Corn for gram which accounts for 90 percent of all corn grown, is harvested only for the corn kernel, as opposed to corn for silage, which is harvested for use of the entire corn plant as feed. Although soybean is now grown exclusively for its bean, historically this has not always been the case. COTTON Eleven cotton producing States were surveyed by USDA for data on fertilizer use in 1978, and these 11 States ac- counted for 98 percent of the total U.S. cotton acreage that was harvested that year. Of the fields surveyed, 69 percent received some fertilizer, which was down substantially from the previous year's total. Harvested acreage that received phosphate declined about 10 percent from 1977 to 1978. Application rates were also lower; in 1978 the average rate was approximately 45 pounds of P 2 5 per acre of cotton. Nearly all fields harvested for cotton in the Southern States, where intensive cultivation over the years has depleted the soil of its natural nutrients, received some fertilizer in 1978. In Texas and Oklahoma, however, where insufficient mois- ture is a threat, only half the cotton acreage was fertilized. SOYBEANS FOR BEANS Sixteen States surveyed by USDA for fertilizer use on soy- beans for beans in 1978 accounted for 91 percent of the harvested soybean acreage in the United States. Harvested acreage receiving some fertilizer remained stable at about 37 percent in 1977 and 1978. The proportion of soybean acreage receiving phosphate fertilizer was stable at about 36 percent during the same period. Application rates for P 2 5 averaged 45 pounds per acre in 1978, which was up slightly compared with application rates for recent years. WHEAT Seventeen States were surveyed by USDA for fertilizer use on wheat in 1978, and these 17 States accounted for 92 percent of the total acreage harvested for wheat in the United States that year. Of the fields surveyed, 61 percent received some fertilizer, compared with 65 percent in 1977. The pro- portion of acreage receiving phosphate decreased in 1978. Applications rates on harvested acreage also decreased, from 36 pounds of P 2 5 per acre in 1977 to 35 pounds per acre in 1978(33). U.S. Balance of Trade In 1 977 the U.S. balance of trade showed a deficit of $26.5 billion. Imports of petroleum and petroleum products, valued at $41.5 billion, were largely responsible for this deficit, and the value of these imports is rapidly increasing as the world price of petroleum continues to rise. In recent years, however, gross agricultural exports have also risen steadily, from $1 7.7 billion in 1973 to a record $23.7 billion in 1977 (table 39). With imports of agricultural products in the same year valued at $13.5 billion, the U.S. agricultural sector maintained a net positive balance of trade of $10.2 billion (35). The positive contribution of agricultural exports to the U.S. balance of payments is growing and is expected to continue to grow in the foreseeable future. One reason for this growth is grain imports by the U.S.S.R. In 1976 the U.S.S.R. agreed to purchase at least 6 million metric tons of grain per year from the United States, with any purchases beyond 8 million metric tons per year to require further negotiation. In 1977 the ceiling for these purchases 38 Table 39.— U.S. foreign trade in agricultural products (Billions) Table 41 . — Phosphorus pentoxide (P 2 5 ) taken up by various crops, 1976 Year Exports Imports Balance 1958 $3.9 $3.9 $0 1959 4.0 4.1 -0.1 1960 4.9 3.8 1.1 1961 5.0 3.7 1.3 1962 5.0 3.9 1.1 1963 5.6 4.0 1.6 1964 6.3 4.1 2.2 1965 6.2 4.1 2.1 1966 6.9 4.5 2.4 1967 6.4 4.5 1.9 1968 6.2 5.1 1.1 1969 5.9 5.1 .8 1970 7.2 5.8 1.4 1971 7.7 5.8 1.9 1972 9.4 6.5 2.9 1973 17.7 8.4 9.2 1974 22.0 10.4 11.6 1975 21.9 9.5 12.4 1976 23.0 11.2 11.8 1977 23.7 13.5 10.2 Source: International Economic Report of the President, January 1977 (27). was raised to 15 million metric tons per year. In that year the Soviets bought 12.7 million metric tons of U.S. grain (9.3 million tons of corn and 3.4 million tons of wheat) valued at more than $1.3 billion. It was estimated that these figures doubled for 1978. Recent international developments have affected this trade, however, and it is unlikely in the short run that the United States will continue to export grain to the U.S.S.R. As a result of the United States' formal recognition of Main- land China, an agricultural products market is likely to open up in that country. A summary of the value of U.S. exports of four leading crops that received phosphatic fertilizers — corn, wheat, soy- beans, and cotton — is given in table 40 for the 1977 crop year. The importance of phosphatic fertilizers to the domestic economy and to the U.S. balance of payments is evident from this table. Table 40 also shows that phosphatic fertilizers were a necessary input for $20.5 billion worth of domestic crops, including $6.1 billion worth of crop exports, with both of these figures including only the four crops listed above. Thus, when the value of crops grown using phosphatic fertilizers is taken into account, the importance of the phosphate industry is seen to be far greater than it appears when only the value of phosphate rock and fertilizer products is considered. In the past, extensive research has been devoted to the importance of fertilizer to crop yield. It is held by many people that plant nutrients in fertilizers can be credited with more than one-third of the food production in the United States (1). Over the past 10 years the soil of farm lands throughout the Approximate amount of P 2 5 Amount of taken up P 2 5 applied, by crop, Average yield, pounds pounds bushels Crop per acre per acre per acre Corn 59.8 33.0 87.4 Wheat 18.6 16.7 30.3 Cotton 27.7 12.0 1 464.0 Soybeans 11.9 20.4 25.6 1 Pounds per acre. United States has been intensively fertilized. As a result, a certain amount of nutrient buildup is present in the soil. Be- cause of this, the marginal yield of additional nutrient appli- cation may be low in the short run, for some crops. This is true regarding application of phosphate fertilizer. One characteristic important to the analysis of phosphate fertilizer yield is the residual value from applied phosphate. In any one year, probably not more than 20 percent of the phosphorous added to the soil is taken up by the crop; there- fore, a large percentage of phosphorus remains in the soil which can be used by future crops. Table 41 shows the ap- proximate P 2 5 content, in pounds per acre, of the 1 976 yield of crops as harvested from the field. As shown in the table, much more P 2 5 was applied to corn and cotton than was taken up by these crops. Soybeans, however, took up more P 2 5 than was applied. This is because soybeans are com- monly grown after corn on the same land, so soybean crops generally benefit from P 2 5 that has been previously applied for corn. Because of this, a low percentage of soybean acreage is fertilized (28 percent in 1976). The data presented in the table imply that the extra P 2 5 applied to the corn crop was utilized to a large degree by soybeans. General advances in farm technology are expected to con- tinue to increase crop yield responses to phosphatic fertil- izers. It has been estimated that farmers receive a return of about $2.00 for every $1 .00 spent for phosphatic fertilizers. In 1978 a total of 5.1 million tons of P 2 5 was used in the United States (2). With P 2 5 valued at 17 cents per pound, or $340 per ton, the cost of this P 2 5 was about $1 .7 billion. In recent years fertilizer has become a growing input into current farm operating expenses. Fertilizer comprised 6 per- cent of current farm operating expenses in 1960, almost 8 percent of these expenses in 1965, and 12 percent in 1975. Thus, the percentage of current farm operating expenses that was spent on fertilizer increased by 100 percent in 15 years. Total current farm operating expenses increased 270 percent from 1960 to 1977; during this same period, fertilizer ex- Table 40.— Value of crop production and exports in the 1977 crop year 1 Value of U.S. Value of Crop fertilized with Value of exports fertilized with U.S. phosphatic Value of U.S. crop U.S. phosphatic production fertilizer, fertilized with phosphatic exports, fertilizer, Crop billions percent of total fertilizer, bilions billions billions Corn $14.7 90 $13.3 $3.6 $3.3 Wheat 6.2 50 3.1 2.0 1.0 Soybeans 8.5 28 2.4 3.8 1.1 Cotton 3.3 53 1.7 1.3 .7 Total ... 32.7 NAp 20.5 10.7 6.1 NAp Not applicable. 1 Bureau of Mines, estimates based on U.S. Department of Agriculture preliminary information. 39 penses increased almost fivefold, from $1.3 billion to $5.9 billion. About $1.7 billion of the fertilizer expense for 1977 was for phosphate fertilizer (32). U.S. Exports of Phosphatic Fertilizers The United States is a major world supplier of phosphate fertilizers. In the 1977-78 fertilizer year, the United States exported nearly 7.3 million metric tons of P 2 5 in various phosphate materials, equivalent to roughly one-fourth of the total U.S. production. The five major importers of U.S. ammonium phosphate in 1977-78 were Brazil, India, Italy, Belgium, and France. To- gether these five countries received 69 percent of total U.S. imports. Indonesia, a major importer of U.S. ammonium phos- phates in 1974-75, purchased none in 1975-76 because it had large domestic inventories. Pakistan, which imported only 12,000 metric tons of U.S. ammonium phosphates in 1974- 75, became a relatively large importer in 1975-76, when it received 184,000 metric tons. Eight nations imported 50,000 metric tons or more each of concentrated superphosphate from U.S. sources in 1977-78. The top four importing nations — Brazil, the Federal Republic of Germany, Indonesia, and Belgium — received two-thirds of total U.S. exports. World Fertilizer Situation Review and Prospects In the year ending June 30, 1 975, the world fertilizer market emerged from 24 months of short supplies and high prices. In January 1975, international prices for fertilizers were at high levels. New plant capacity had been insufficient to meet the increased demand for fertilizer which resulted from panic buying, widespread crop shortfalls, record high grain prices, and international projections indicating continued fertilizer shortages and rising prices. High prices for fertilizer and ex- pectations of lower crop prices reduced world demand, caus- ing inventory buildups in both importing and exporting na- tions. World fertilizer prices then experienced a long decline from the unsustainable high levels of 1974-1975 until they hit bottom during 1976-77. In 1977-78 seasonal fluctuations continued for the major fertilizer components (33). Prices showed more strength and stability in the 1977-78 fertilizer year than they had in previous years. It is expected that world demand for fertilizers will increase over the next few years, but the extent of the increase is uncertain (33). World production capacity for phosphate is expanding, and fertilizer inventories remain high in several major fertilizer importing countries. A recurrence of tight world market conditions for fertilizers seems unlikely through 1 980- 81. The world market for phosphate fertilizers is strong. Phosphate Fertilizer Outlook In 1975 the future of the phosphate fertilizer industry did not look good. Domestic demand had fallen back sharply from 1974 to 1975, and there were rumors that the U.S. export market was shattered. At the same time, the Nation's pro- ducers were in the midst of a 30-percent expansion that in- creased wet-process phosphoric acid capacity from 6.0 mil- lion metric tons per year in 1974 to 7.7 million metric tons per year in 1975. A glut of capacity was evident, but it was short-lived. In 1977 the export market for phosphate fertilizer made large advances. Net export levels had almost doubled since 1974, and it appeared that the market had bounced back from the low level of 1974. Annual capacity in 1977 and 1978 was 8.8 and 9.3 million metric tons, respectively, and was projected to remain at 9.3 million metric tons through 1980, according to U.S. Department of Agriculture estimates. If de- mand increases, further expansion of phosphate fertilizer capacity will be needed by the early 1980's to replace ob- solete plants and supply even larger amounts of wet-process phosphoric acid. Export markets for phosphate products have been stable. Phosphate rock exports have declined in recent years, but exports of manufactured phosphate fertilizer have grown con- siderably in terms of P 2 5 equivalent; the United States is now exporting more "value-added" materials along with its phosphate rock. Diammonium phosphate exports increased significantly in 1978, and other important phosphate products which showed export gains were concentrated superphos- phate and phosphoric acid. World consumption of manufactured phosphate fertilizers rose 4 percent in 1975-76 to an estimated 26.2 million tons of P 2 5 , after a drop of almost 7 percent during the previous year. Prices during 1975-76 declined, returning to early 1973 levels. Recent estimates put 1976-77 world phosphate con- sumption at approximately 28 million metric tons of P 2 5 and 1978-79 consumption at close to 30 million metric tons. The developed countries were expected to account for about 50 percent of the 1976-77 world consumption of phosphate fer- tilizers, the centrally planned nations were expected to con- sume about 33 percent, and the developing countries about 17 percent (34). These proportions are expected to remain roughly constant through 1980-81. The world produced 27.3 million metric tons of phosphate fertilizer in 1977 and consumed 26.5 million metric tons. It was projected in 1979 that world phosphoric acid capacity between 1 977 and 1 985 would increase by 30 percent. It was also projected that potential world production of phosphate fertilizers could reach 38.9 million metric tons by 1985 and that world consumption would reach 36.7 million metric tons. Based on these projections, world production can be ex- pected to exceed world consumption by about 2.2 million metric tons in 1 985. This excess would be equivalent to about 6 percent of production. During the past 10 years, world pro- duction has exceeded consumption by about 5 percent (75). 40 WORLD PRODUCTION AND CAPACITY OF PHOSPHATE ROCK World Production World phosphate rock production (fig. 15 and table 42) increased by 8 percent from 1973 to 1977, reaching a level of 116 million metric tons in 1977. The increase in demand for phosphate rock was even more substantial, although an oversupply persisted in 1976 and 1977. The increased de- mand was not sufficient, however, to eliminate a buyers' market that had prevailed since 1975. By 1 977 it was clear that any attempts by Morocco and other African and Near Eastern suppliers to establish a cartel would be unsuccessful. Phosphate rock prices for the 1978 contract year showed only a marginal improvement over the prices that had prevailed in 1977, and it appeared that any attempts by exporters to cover the costs of inflation were fragmentary, at best. World Capacity At the time this report was written (1980), it appeared that total world phosphate rock capacity for 1980 would be more than sufficient to meet the total world demand for that year. World capacity was estimated at 164 million metric tons for 1 980, which was nearly 22 percent more than the 1 977 world capacity of 134 million metric tons. This increase of nearly 22 percent implies an average annual growth rate of 7 percent. Continued capacity growth at this rate would be more than sufficient to meet the estimated growth in world demand for phosphate rock during the 1977-85 period; the probable average annual rate of demand growth for this period has been projected at 5.6 percent (2.5 percent for the United States and 5.1 percent for the rest of the world) (20). This situation relates directly to the Florida phosphate industry and its future prospects. The industry has a secure domestic market, and growing world demand and higher prices can be expected to encourage more shipments into the export market. With two strong and growing markets available, the Florida phosphate industry has flexibility should one market weaken. The rest of the U.S. phosphate industry, however, will be at a disadvantage because freight rates have doubled since 1974, and the price of sulfur is at an alltime high. The existing relationship between world capacity for phosphate rock and world demand — which will be growing by at least 5 percent per year in the mid-1 980's, according to a World Bank forecast — depends directly upon the availability of sources of supply alternative to Florida. In 1977 Florida and North Carolina pr< duced more than 40 million metric tons of phosphate rock, he equivalent of one-third of world production (table 42); it is estimated that in 1981 production for Florida alone will increase to 43 million metric tons. Although there are substantial phosphate rock reserves outside the United States (table 43), these reserves would require time and money for development. In order to develop new capacity equal to that which could be lost due to depletion of reserves in Florida, several years and new investment would be required. One certain consequence of a reduction in Florida production would be increased fertilizer prices which would result from competition for restricted supplies of phosphate rock for domestic and export use. Figure 15.— World production of phosphate rock, by relative share, 1977. 41 Table 42.— World production of phosphate rock, by country (Thousand metric tons) Country 1 North America: United States Mexico Netherlands Antilles South America: Argentina (guano) Brazil Chile (guano) ___ Colombia Peru Venezuela Europe France Germany, Federal Republic of U.S.S.R." Africa: Algeria Egypt Morocco _ ___ Senegal: Aluminum phosphate .. Calciumphosphate Seychelles (guano) 5 South Africa. Republic of 6 . Spanish Sahara Togo Tunisia Uganda e Zimbabwe-Rhodesia e Asia: China, Mainland e Christmas Island _ India: Apatite Phosphate rock Israel Jordan Korea, North (apatite) e Philippines: Guano Phosphate rock Syria Vietnam e Oceania: Australia _ Nauru Island Ocean Island Total 1973 38,226 72 93 1 286 13 10 23 30 29 93 21.228 612 533 17,077 219 1.533 7 1,365 697 2,292 3,473 15 150 2,994 1,538 10 135 780 1,106 363 ( 2 ) 12 150 499 5 2,323 744 ' 98,754 1974 41,446 194 107 ( 2 ) '327 19 10 ( 3 ) 142 19 85 22,498 '789 507 19,721 406 1,472 7 '1,419 ' 2,300 2,572 '3,810 15 '127 2,994 1,764 12 '434 1,026 '692 399 14 26 602 1,179 2 2,288 562 '109,987 1975 44,285 282 82 1 406 14 13 ( 3 ) 116 18 82 24,131 707 536 13,548 201 1,600 erg 1,647 2,760 1,160 3,488 15 '130 3,400 1,392 30 429 882 1,112 454 126 5 857 1,400 140 1,533 516 107,278 1976 44,662 224 54 490 16 10 2 80 18 85 24,222 820 433 15,656 208 1,591 6 1,702 172 2,009 3,301 15 130 3,750 1,032 38 613 639 1,702 454 2 12 511 1,500 258 755 417 106,955 1977, 47,256 200 79 605 e 16 "10 139 28 65 24,200 1,055 581 17,027 1,869 6 2,403 232 2,857 3,614 5 140 4,100 1,186 e 750 1,232 1,781 500 e 2 «12 425 1,500 485 1,146 416 116,000 e Estimated. ° Preliminary. ' Revised. ' In addition to the countries listed, Belgium, Indonesia, and Tanzania may have continued to produce phosphate rock, and the Territory of South-West Africa produced guano, but output was not officially reported, and available information is inadequate for the formulation of reliable estimates of output levels. 2 Less than Vfe unit. 3 Revised to none. i Estimated by the International Superphosphate Manufacturers' Association on the basis of a marketable product averaging 34.8 percent P 2 O s . 5 Exports. 6 Local sales and exports of phosphate concentrate and direct-sale ore. Table 43.— Identified world phosphate reserves and resources (Million metric tons) Continent Reserves' Total identified resources North America South America Europe Africa Asia Oceania 2,200 450 1,415 22,180 660 100 8,100 950 3,445 51,450 1,350 2,130 Total 2 27,000 67,000 ' Estimated reserves at 1 977 costs and prices. 2 Data may not add to totals shown because of independent rounding. World Trade World trade in phosphate rock and phosphatic fertilizer is complex, with demand for phosphate rock and fertilizer interrelated. Morocco, the United States, the U.S.S.R., and the Pacific islands of Nauru, Banaba (Ocean Island), and Christmas are the principal exporters of phosphate rock. Western Europe, Eastern Europe, Japan, Canada, and South America are the major importers. Florida (including North Carolina) exported an estimated 40 percent of its phosphate as rock and fertilizer in 1977 and 1978, accounting for an estimated 95 percent of all U.S. exports of phosphate rock in those years. Exports of Florida phosphate rock are expected 42 Table 44.— Major phosphate rock exporters (Thousand metric tons) Exporter 1971 1972 1973 1974 1975 1976 1977 1 Morocco: Marketable production Exports Tunisia: Marketable production Exports Togo: Marketable production Exports U.S.S.R.: Marketable production Exports 3 U.S. Total: Marketable production Exports Florida: Exports 12,013 1 1 ,886 3,162 2,410 1,715 1,762 21,591 2,145 35,277 11,419 10,767 14,971 13,559 3,387 2,306 1,928 1,855 22,498 NA 37,041 12,464 1 1 ,895 17,077 16,104 3,473 2,226 2,292 2,292 221,228 6,552 38,226 12,587 1 1 ,863 19,721 18,691 '3,810 2,407 2,572 2,633 2 22,498 5,945 41,437 12,605 12,116 13,548 13,105 3,488 1,725 1,160 1,174 2 24,131 5,807 44,276 11,131 10,270 15,656 14,652 3,301 1,857 2,009 2,001 2 24,222 4,870 44,662 9,433 9,013 17,027 15,792 3,614 1,898 2,857 2,886 24,200 4,243 47,256 13,230 12,937 r Revised. NA Not Available. 1 Data from Phosphate Rock, Minerals Commodity Profile, Bureau of Mines, 1978. 2 Estimated by the International Superphosphate Manufacturers' Association on the basis of a marketable product averaging 34.8 percent P 2 5 . 3 To Western Europe only. Table 45.— Exports of phosphate rock, by destination (Thousand metric tons and thousand dollars) Destination 1975 Quantity Value 1976 Quantity Value 1977 Quantity Value Florida phosphate rock: Austria Belgium-Luxembourg Brazil Canada Chile Colombia Costa Rica Ecuador El Salvador France Germany Democratic Republic Germany, Federal Republic of India Iran . Ireland Italy Japan Korea, Republic of Mexico Netherlands Norway Peru Philippines Poland Portugal Romania Spain Sweden Switzerland Taiwan United Kingdom Other Total 2 Florida exports Other U.S. phosphate rock, total 3 Grand total 2 25 643 509 2,380 26 44 15 5 519 534 226 376 207 1,671 608 950 522 75 10 131 423 131 47 63 15 117 1 10,270 1,166 144 29,641 24,270 67,367 1,878 2,200 709 217 19,133 20,136 9,655 23,614 8,540 80,721 30,538 40,141 18,822 2,837 495 7,232 19,662 6,216 1,188 2,987 863 5,673 45 424,924 36,629 97 750 645 1,787 16 11 20 11 534 16 506 237 277 23 95 1,375 692 394 688 55 5 76 190 4 153 16 103 24 45 164 2 4,173 26,610 25,655 41,566 573 325 704 426 16,480 401 14,085 11,218 9,349 656 3,157 53,311 30,059 12,378 19,852 2,104 184 2,950 6,328 129 4,926 424 3,876 871 1,727 5,416 139 9,011 983 300,052 27,358 1 1 ,436 461,533 9,994 327,410 151 899 558 2,049 53 10 11 1,051 978 249 366 23 297 1,479 1,165 566 824 154 16 100 935 5 259 142 120 32 405 (1) 12,937 1,077 14,014 4,310 22,797 16,500 41 ,583 1,626 304 270 23,486 21,895 8,556 12,279 598 7,149 48,094 36,344 14,126 18,922 4,024 494 3,322 21,151 121 6,590 3,246 3,349 1,208 10,187 1 333,891 28,332 362,223 ' Revised. 1 Less than V2 unit. 2 Data may not add to totals shown because of independent rounding. 3 Includes coloidal and sintered matrix from Tennessee, Idaho, and Montana and soft phosphate rock. 43 Table 46.— International phosphate rock and fertilizer shipments from Florida, 1 1976 Destination Algeria __ Argentina Australia Bangladesh Belgium-Luxembourg Belize Benin Bermuda _ Brazil Canada Canary Islands Chile _ Colombia Costa Rica Denmark Dominican Republic Ecuador El Salvador England Ethiopia France Germany, Federal Republic of Guyana India Iran Ireland Italy Ivory Coast Jamaica Japan Korea, Republic of Malaysia Martinique Mauritius Mexico Netherlands New Zealand Nicaragua Norway Pakistan Panama Peru Philippines Poland Portugal Romania Sicily Singapore South Africa, Republic of Spain Sweden Taiwan Thailand Trieste Trinidad __.. Turkey Uraguay Wales Yugoslavia Phosphate rock Total Quantity, net metric tons 23,972 761,603 712,414 1,091,296 16,733 12,053 19,541 10,671 145,105 580,719 331,147 1,225 237,119 280,195 28,036 71 ,884 1,372,759 692,460 375,058 1,046,482 1,000 55,278 31,839 5,490 76,523 218,831 3,842 178,841 23,775 16.249 102,355 46,758 8,571,053 Percent of total net tonnage 0.28 NAp NAp NAp 8.89 NAp NAp NAp 8.13 12.73 NAp NAp .20 .14 NAp NAp .23 .12 1.69 NAp 6.78 3.86 .01 2.78 3.27 .33 .84 NAp NAp 16.02 8.08 NAp NAp NAp 4.38 12.21 .01 NAp .64 NAp .37 .06 .89 2.55 .04 2.09 .28 NAp NAp .19 1.19 .55 NAp NAp NAp NAp NAp NAp NAp NAp Value $1,723,751 26,917,720 28,349,462 22,797,757 572,558 518,012 703,633 425,780 4,464,650 17,500,107 9,986,601 60,000 11,217,893 9,349,383 1,259,883 2,502,053 53,203,460 30,059,481 12,374,600 31,140,738 109,995 2,104,020 1,163,731 184,193 2,949,990 7,132,405 129,466 5,606,751 654,199 423,751 3,875,921 1,913,920 Ph sphate fertilizer 291,386,656 Quantity, net metric tons 23,829 30,616 15,999 31 ,828 126,393 1,637 473 78 660,049 90,614 2,000 86,610 31,934 21,453 22,364 17,861 22,417 2,751 7,376 267,049 92,502 941 24,688 263,647 7,866 2,880 173,858 6,202 200 2,987 5,000 1,499 1,426 249,323 48,956 7,199 2,500 3,729 10,017 15,347 1,500 97,324 766 25,103 41 ,636 4,202 131,359 2,687,365 Percent of total net tonnage 0.89 1.14 .59 1.18 4.70 .06 .02 NAp 24.56 3.37 .07 3.22 1.19 .80 .83 .66 NAp .83 .10 .27 9.94 3.44 .04 NAp NAp .92 9.81 2.9 .11 6.47 NAp .23 .01 .11 NAp .19 .06 .05 NAp 9.35 NAp NAp NAp 1.82 .27 NAp NAp .09 .13 .37 NAp .57 .06 3.62 .03 .93 1.55 .16 4.89 NAp Value $1,348,338 3,846,026 2,021 ,608 3,889,210 12,480,527 283,647 57,960 12,597 63,480,278 10,064,881 204,000 7,800,840 3,834,648 2,593,813 1,883,086 2,063,857 2,712,992 365,883 412,354 31,198,908 9,493,903 121,156 1,906,913 31,095,300 989,552 321 ,224 32,072,533 775,246 39,600 358,443 409,996 164,900 220,326 32,803,936 5,338,142 879,297 378,520 1,134,026 1 ,202,062 1,676,534 127,469 9,828,363 107,586 2,384,767 4,655,485 1,790,487 12,786,017 303,616,506 NAp Not applicable. 'Includes shipments from the Florida Ports of Tampa, Jacksonville, and Boca Grande, as well as the Port of Morehead City, N.C., which accounted for about 3 pet of the total shipments. Source: Port of Tampa Authority. to increase through 1 985. Due to increases in international transportation costs, it is anticipated that there will be a trend toward the export of higher value phosphate fertilizer products. Total world trade in phosphate rock was approximately 38 million metric tons in 1 977. Florida and Morocco had combined exports of more than 23 million metric tons, or more than 77 percent of the total exports by major phosphate rock producers (table 44). Morocco, from which transportation costs to European markets are lower than from Florida, accounted for a large share of the more than 29 million metric tons of phosphate rock that was imported into Europe in 1 977. Florida sales to Europe have nonetheless been stable in the recent 44 4000 i- 3000 « E C o 3 O o 2000 1000 Canada and Mexico Central America Figure 16. — Florida exports of phosphate rock, by destination, 1976. 1,000 800 - 4) E TJ C O M 3 O 600 i/> 400 - O X 200 Canada and Mexico Central America Caribbean Figure 17.— Florida exports of phosphate fertilizer, by destination, 1976. 45 past, and Western Europe is expected to continue to be a viable market for Florida phosphate rock because of the reliability of the source and the demand for a diversified source of supply. The Soviet phosphate mining industry, with estimated production stabilized at 24 million metric tons for the third successive year in 1977 (table 44), maintained its position as the world's second largest producer. In that same year the U.S.S.R. exported more than 4 million metric tons of phosphate rock. Several of the developing nations are expanding their phosphate industries. North Africa, which includes Morocco, Algeria, Tunisia, and the Sahara Desert, has phosphate rock reserves estimated at more than 19.5 billion metric tons. In 1 978 the countries of North Africa produced some 24.5 million metric tons of phosphate rock, reflecting a 12-percent increase over 1977 production. This fell short, however, of the record high for the region, set in 1974, when North Africa produced 26.8 million metric tons of phosphate rock. Despite strong foreign competition, Florida phosphate rock production has maintained a position of importance throughout the world (table 45). Exports of Florida rock (including those of North Carolina) rose from almost 9 million metric tons in 1 976 to more than 1 3 million metric tons in 1 977. Approximately 35 percent of the 1977 exports went to Western Europe, and another 24 percent went to Asia, principally to Japan and the Republic of Korea. The balance was exported to Canada, Poland, and Latin America. Florida's exports of phosphate rock and fertilizers for 1976 are shown in table 46 and in figures 16 and 17. World phosphate rock prices reached a peak in 1974. The next four years saw a gradual decline of prices, but by the latter part of 1 978 prices started to turn up again. It is anticipated that phosphate rock prices will increase into the 1980s. 46 CONCLUSIONS The central Florida phosphate district is the largest phosphate producing region in the world. In 1978 it accounted for more than one-third of world production. Based on the data and analyses presented in this report, the following conclusions concerning the Florida phosphate industry were drawn: 1 . It was projected that in 1981 the phosphate industry will contribute the following benefits to the Florida economy: approximately 48,500 jobs and nearly $1 .4 billion 13 in gross output, including $448 million in personal income. These economic benefits are generally localized where the phosphate rock mining and fertilizer manufacturing industry, the /- transportation industry, and other related industries are located; that is, in Polk, Hillsborough, Hamilton, and Columbia Counties. 2. The Florida phosphate industry has a substantial impact on the national economy. It was projected that 60,000 jobs and more than $1 .4 billion in gross output, including $391 .0 million in personal income, will be generated outside Florida by the Florida phosphate industry in 1981. It was further projected that nationwide the Florida phosphate industry will account for approximately 100,000 jobs and $2.8 billion of gross output, including $839 million in personal income, in 1981. 3. It was estimated that total nationwide tax payments generated by the phosphate industry will exceed $316 million in 1981, with more than $99 million of that total expected to be paid to Florida governments. 4. The net positive contribution of the Florida phosphate industry to the U.S. balance of payments in 1 981 was estimated at approximately $961.8 million. 5. If it were not for the Florida phosphate industry, the United States would have to import a major share of its phosphate requirements. The result would probably be higher 13 AII monetary estimates in this section are in 1977 dollars. food prices, assuming that impo sd phosphate would be costlier than domestic phosphate and assuming no offsetting increase in agricultural productivity. Higher food prices would in turn result in a corresponding decline in real income and living standards. 6. The Florida phosphate fertilizer industry consumes about 50 percent of all U.S. sulfur production. It was estimated that in 1981 the Florida fertilizer industry will represent a $480 million market for sulfur. 7. The fluorine contained in phosphate rock is adequate to supply a major share of U.S. demand, thereby reducing fluorine imports proportionately. Over the productive life of Florida's phosphate land-pebble deposits, it was estimated that $1 40 million worth of fluorine can be recovered. 8. Uranium with an estimated value of $3.23 billion could potentially be recovered from the processing of Florida phosphate rock in 1981, assuming a uranium oxide (U 3 8 ) price of $42 per pound. This estimate was based on byproduct recovery of U 3 8 from phosphoric acid production. Uranium produced as a primary product from Florida phosphate rock would not be economically competitive with other uranium ores. 9. Two phosphate industry impact regions were defined in Florida, the central Florida region of Polk and Hillsborough Counties and the northern Florida region of Hamilton and Columbia Counties. Total 1 977 wages and salaries of over $41 9 million were attributable to the industry in central Florida. In the northern Florida region, approximately $40.7 million was linked to the industry. An estimated 13 percent of the central Florida region's wages and salaries and 40 percent of the northern Florida region's wages and salaries were related to the phosphate industry. Approximately 8 percent of the central Florida region's employment was linked to the phosphate industry, and 21 percent of the employment in the northern Florida region was linked to the phosphate industry. 47 BIBLIOGRAPHY 1. Allaway, W. H. The Effect of Soils and Fertilizers on Human and Animal Nutrition. U. S. Department of Agriculture, Agricultural Research Service and Soil Conservation Service. Ag. Inf. Bull. 378, 1975,52 pp. 2. Andrilenas, P. Private communication, 1978, U.S. Department of Agriculture. Available upon request from A. M. Opyrchal, BuMines, Washington, D.C. 3. Blakely, A. F. The Florida Phosphate Industry: A History of the Development and Use of a Vital Mineral. Harvard Univ. Press, Cam- bridge, Mass., 1973, 197 pp. 4. Booz, Allen & Hamilton. Economic Impact Assessment of the Port of Tampa. Transportation Consulting Div., Bethesda, Md., March 1979,50 pp. 5. . Marketing and Economic Study of the Port of Tampa. Transportation Consulting Div., Bethesda, Md., January 1979, 80 pp. 6. Canterbury, E. R., C. W. Hale, and E. J. Nosari. Economic Impact Of the Phosphate Rock Industry on Selected Florida Counties, Flor- ida, and the United States. BuMines Open File Rept. 21-80, 1979, 98 pp; available for consultation at Bureau of Mines facilities in Pitts- burgh, Pa., Juneau, Alaska, Spokane, Wash., and Denver, Colo.; and at the National Library of Natural Resources, U.S. Department of the Interior, Washington, D.C. 7. CONSAD Research Corp. Forecast of Developments in Do- mestic Minerals Transportation. BuMines contract J01 66002, No- vember 1977, 228 pp. 8. Davis, H. C, and E. M. Lofting. The Input-Output Structure of the U.S. Mineral Industries for 1958 and 1963: Transactions, Em- ployment, and Multipliers. BuMines Open File Rept. 20-80, 1979, 60 pp.; available for consultation at Bureau of Mines facilities in Juneau, Alaska, Denver, Colo., Pittsburgh, Pa., and Spokane, Wash.; National Library of Natural Resources, U.S. Department of the In- terior, Washington, D.C; and from National Technical Information Service, Springfield, Va., PB 80-160286. 9. Executive Office of the President. International Economic Report of the President. Council on International Economic Policy, 5th ann. Internat. Econ. Rept., January 1977, 194 pp. 10. Fertilizer Institute. The Fertilizer Handbook. Washington, D.C, 2d ed. 1976, 208 pp. 11. Florida State Senate. Florida Tax Handbook, 1978. Finance, Taxation, and Claims Committee, Tallahassee, Fla., February 1978, 110 pp. 12. Hargett, N. L. Fertilizer Summary Data, 1976. Tennessee Val- ley Authority, National Fertilizer Development Center, Muscle Shoals, Ala., Bull. Y-112, March 1977, 132 pp. 13. Harre,. E. A., M. N. Goodson, and J. D. Bridges. Fertilizer Trends 1976. Tennessee Valley Authority, Muscle Shoals, Ala., Bull. Y-111, March 1977, 44 pp. 14. Hendry, C. W., K. H. Mackay, P. Frank, S. Hall, T. E. Holcom, and N. Reed. Phosphate Land Reclamation Study Commission Re- port on Phosphate Mining and Reclamation. Rept. to the Governor, Tallahassee, Fla., 1978, 203 pp. 15. International Fertilizer Development Center and National Fer- tilizer Development Center. World Fertilizer Situation and Outlook — 1978-85. Tech. Bull. IFDC-T-13, March 1979, 27 pp. 16. Isard, W. Methods of Regional Analysis: An Introduction to Regional Science. MIT Press, Mass. Inst, of Tech., Cambridge, Mass., April 1969, 784 pp. 17. Lofting, E. M., and H. C. Davis. State Input-Output Tables for 1972 Emphasizing the Mineral Industries: Arizona, Florida, and Wis- consin. Dry Lands Research Institute, University of California at Riv- erside. U.S. Bureau of Mines grant G0177119, February 1980 pd 15-20. 18. Quan, C. K. Fluorine. BuMines Mineral Commodity Profile, August 1978, 27 pp. 19. Richardson, H. W. Input-Output and Regional Economics. Halsted Press, Great Britain, 1972, 294 pp. 20. Stowasser, W. F. Phosphate. BuMines Mineral Commodity Profile, January 1979, 20 pp. 21 . Sweeney, J. W., and R. N. Hasslacher. The Phosphate Industry in the Southeastern United States and its Relationship to World Min- eral Fertilizer Demand. BuMines IC 8459, 1970, 76 pp. 22. Texas Instruments, Inc. Environmental Impact Statement, Cen- tral Florida Phosphate Industry, V. 1, 2, and 3. U.S. Environmental Protection Agency, Feb. 15, 1979, 500 pp. 23. Tubbs, S. A. Private communication, 1979, Florida Phosphate Council, Lakeland, Fla. Available upon request from A. M. Opyrchal, Bureau of Mines, Washington, D.C. 24. United Nations Food and Agriculture Organization. Annual Fertilizer Review 1977. Rome, 1978, 115 pp. 25. . Current Situation and Longer Term Outlook. Food and Agriculture Organization Commission on Fertilizers, 3d sess., Rome, June 8-11, 1976, 97 pp. 26. University of Florida, Bureau of Economic and Business Re- search, College of Business Administration. Florida Statistical Ab- stract, 1976. University Presses of Florida, Gainesville, Fla., March 1977, 400 pp. 27. U.S. Bureau of Mines. Minerals Yearbooks, 1974-78. Chapter on Phosphate Rock. 28. . Unpublished national input-output model, 404 sectors, for 1 972. Available at Bureau of Mines, Branch of Economic Analysis, Washington, D.C. 29. U.S. Bureau of the Census. Census of Transportation, 1972; V. 3, Commodity Transportation Survey; Part 3, Area Statistics, South and West Regions and U.S. Summary. U.S. Government Printing Office, Washington, D.C, 1972, 500 pp. 30. . Pollution Abatement Costs and Expenditures 1977. Current Ind. Repts., MA-200(77)-2, April 1979, 120 pp. 31 . . U.S. Export of Phosphate Products in Phosphate Rock Equivalence, 1978. Available from R. Boyer, U.S. Bureau of Mines, Washington, D.C. 32. U.S. Department of Agriculture, Economic Research Service. Farm Income Statistics. Statistical Bulls. 576 and 609, July 1977 and July 1978, 57 pp. and 62 pp. 33. . Fertilizer Situation, 1977 and Fertilizer Situation, 1978. January 1977 and December 1978, 26 pp. and 25 pp. 34. . World Fertilizer Situation, 1975, 1976, and 1980. Oc- tober 1974, 54 pp. 35. U.S. Department of Commerce, Bureau of Economic Analysis. Survey of Current Business. V. 58, No. 11, November 1978, 32 pp. 36. Wang, K.-L., B. W. Klein, and A. F. Powell. Economic Signif- icance of the Florida Phosphate Industry. BuMines IC 8653, 1974, 51 pp. 37. Wells, F. J. The Long-Run Availability of Phosphorus: A Case Study in Mineral Resource Analysis. Johns Hopkins University Press, Baltimore, Md., 1975, 120 pp. 38. Zellars-Williams, Inc. Evaluation of the Phosphate Deposits of Florida Using the Minerals Availability System. BuMines contract J0377000, June 1978, 200 pp. 48 APPENDIX A.— METHODOLOGY OF IMPACT ANALYSIS Input-output (l-O) analysis is concerned with the interde- pendence among economic sectors. In this study, two 1-0 models were developed for economic impact analysis with respect to the Florida phosphate industry. The two models were based upon the economy of Florida and the national economy of the United States. The Florida phosphate industry includes the Standard In- dustrial Classifications (SIC's) 1475, phosphate rock mining and beneficiation; 2874, phosphatic fertilizer manufacturing; and 2819, industrial inorganic chemicals (not elsewhere clas- sified). These SIC's were used in constructing the two pre- viously mentioned l-O models, and it was from these SIC's that the economic impact multipliers used in this study were derived. In the sources of available data, all three SIC sectors are treated as individual industries. Because of disaggre- gation problems, it was assumed for purposes of this study that SIC 287, agricultural chemicals, is representative of SIC 2874 for multiplier derivation purposes. The following is a description of impact multipliers taken from "The Input-Output Structure of the U.S. Mineral Indus- tries: Transactions, Employment, and Multipliers," a report written by H. C. Davis and E. M. Lofting (8) under contract to the Bureau of Mines: Economic Multiplier Analysis The theory and application of multiplier analysis has been dealt with comprehensively by Miernyk (1 ), 1 Richardson (2), and Moore and Petersen (3). Brief coverage of the concepts is presented here to provide an orientation. In general, the analyst seeks to determine the repercus- sions in terms of employment and income of various ex- penditures made in the economy. Prior to the development of input-output tables attempts were made to estimate mul- tiplier effects in an aggregate manner for the entire econ- omy. The earliest efforts are usually traced to Kahn (4) and Keynes (5). With the advent of input-output techniques, multiplier analysis could be carried out for individual sectors of an economy in a more refined fashion. Since the Leontief in- verse of the table of interindustry flows provides the direct and indirect (total) requirements by sector, per unit of output of final demand, the inverse can readily be used to deter- mine the overall impacts that changes in expenditure levels can cause. Multipliers can be calculated in different ways to serve different purposes. The most commonly encountered mul- tipliers are (i) output multipliers, (ii) employment multipliers, and (iii) income multipliers. Employment and income mul- tipliers can be calculated so as to show direct plus indirect effects (Type I) or direct plus indirect plus induced effects (Type II). The Type I and Type II multipliers are treated in subsection (iv). (i) Output Multipliers Output (or column) multipliers measure the total direct and indirect requirements needed from all sectors to deliver one unit of output from a given sector to final use. These multipliers are calculated by summing the entries in the columns of the Leontief inverse, hence the alternate des- ignation "column" multipliers. The output multipliers meas- ure the total requirements per unit of final demand, and thus indicate the degree of structural dependence of each sector on all other sectors of the economy. A critically important concept regarding this type of multiplier should be stressed. As normally calculated, the output multiplier represents total requirements per unit change in final demand. In many analyses the problems as posed involve the calculation not of changes in final demand but of direct changes in output, i.e., plant closings, port shutdowns, resource constraints, (e.g. such as droughts or other disasters) which directly impact on the industrial output of certain regional sectors without fundamentally altering the level of final demand. In fact, final demand may be satisfied by alternative supply sources. In these instances the appropriate impact multi- pliers are related to the unit change in output and are cal- culated by dividing each element in the columns of the Leontief inverse by the on-diagonal entry of the particular column. (6) The resulting matrix will have elements some- what smaller than those of the original Leontief inverse and these multipliers (the column sums of this matrix) will con- sequently also be smaller than those derived on the basis of output to final use. (ii) Employment Multipliers In many instances changes in expenditure patterns will increase or decrease levels of employment. Input-output analysis provides the means to quantify these changes on a sector by sector basis. The Bureau of Labor Statistics typically develops labor, or employment interactions matrices, based on the BEA national input-output tables. "In order to make the . . . input-output table more useful for manpower analysis, the Division of Eco- , nomic Growth has converted the inverse form of the table into manpower requirements. The original table, which shows the direct and indirect industry output generated by a dollar's worth of final de- mand, has been used, along with estimates of . . . levels of labor productivity ... to provide es- timates of the direct and indirect employment re- quirements per billion dollars of final demand . . . The basic input-output relationships were left un- changed" (7). The calculations of "estimates of labor productivity" are based on the employment-production function approach using linear regression methods. This technique was elab- orated by Moore and Petersen (8). The functions take the form of E< = rrijX, + c, where E is employment in man-years, x is output in constant dollars over the time span of available data, and c is the intercept value. The employment multipliers can be calculated by multi- plying each row element (b„) in the Leontief inverse by the appropriate (m,) to form a manpower requirements matrix. The columns of this matrix are then summed as in the development of output multipliers described above. The employment multiplier (E m ) is formed by dividing this column sum for each sector (i) by the initial (m,). (iii) Income Multipliers The simple income multiplier expresses the ratio of the direct plus indirect income change in a given sector to the initial direct change: M, = Sa^b, 'These references are listed at the end of this quoted material. Where M, is the income multiplier, b„ is an element of the Leontief inverse, and a h| is the element of the household row. 49 (iv) Type I and Type II— Employment and Income Multipliers The employment and income multipliers described above in sections (ii) and (iii) are designed to measure the direct and indirect effects that result from a change in some given level of spending. As the income from the initial stimulus is respent on other goods and services, there are further changes in income. These second, and succeeding, round effects are referred to as "induced" effects. Multipliers which are designed to estimate the direct plus indirect effects are termed Type I or "simple" multipliers. Those which are formed to estimate direct plus indirect plus induced effects are called Type II multipliers. Type II multipliers can be estimated either by applying appropriate sectoral con- sumption functions to the economy under study and cal- culating the accretions to income from the second and suc- ceeding rounds of expenditures, or, by partially "closing" the input-output model. This closing is achieved by aug- menting the processing sectors with the household row and household column and forming a new Leontief inverse. The elements of the new inverse are slightly larger and provide the basis for calculating the Type II multipliers. In the case of Type I and Type II income multipliers, it has been noticed that for a given economy the two multi- pliers will always differ by a constant factor which is the same for all sectors. This factor appears to range generally between one and three. References 2 I.William H. Miernyk, The Elements of Input-Output Analysis, Random House Inc., New York, 1965. 2. Harry W. Richardson, Input-Output and Regional Economics, John Wiley and Sons, New York, 1972. 3. F. T. Moore and J. W. Petersen, "Regional Analysis: An Interindustry Model of Utah," Review of Economics zjhts reference list applies only to the preceding quoted material. and Statistics, Vol. 37, No. 4, pp. 368-383. 4. R. F. Kahn, "The Relation of Home Investment to Unemployment," Eco- nomic Journal, Vol. LI, 1931, p. 173. 5. J. M. Keynes, The General Theory of Employment, Interest, and Money, Harcourt Brace, New York, 1956. 6. Philip M. Ritz, Chief, Interindustry Economics, Bureau of Economic Analy- sis, unpublished memorandum. 7. Jack Alterman, "The Federal Gov- ernment's Program of Economic Growth Studies," Seventh Annual Forecasting Conference, American Statistical Asso- ciation, New York, 1965. 8. Moore and Petersen, op. cit. Using the above methodology, two sets of multipliers were calculated. The first set, which is shown in table A-1 , included the national impact multipliers derived from a 404-sector l-O table which included an expanded 44-sector mining industry. Table A-1 can be read as follows: The employment multiplier per million dollars of output of phosphate rock is equal to the direct employment (16.39216), in workers per million dollars of output, plus the net indirect employment (45.89812 - 16.39216), plus the net induced employment (132.58181 - 45.89812). The type I multiplier equals the ratio of the indirect em- ployment to the direct employment, and the type II multiplier equals the ratio of the induced employment to the direct em- ployment. The output multiplier is the sum of the column of the phosphate rock mining industry in the Leontief inverse, or the (l-A) - \ where I is the identity matrix and A is the direct- input coefficients matrix derived from the total requirements table. The personal income multipliers in both tables and the employment multipliers in table A-2 have solutions that are analogous to the solution used to compute the employment multipliers for table A-1. Table A-1. — Impact multipliers derived from a 404-sector national input-output (l-O) table for 1972 (Per million dollars of output) Direct Indirect Induced Multiplier Phosphate subindustry Type I Type II Output Employment: Phosphate rock 16.39216 11.15755 14.78383 .28913 .22821 .21212 45.89812 34.55027 50.30041 .55016 .45868 .56765 132.58181 104.25907 139.29741 1.24334 1.01173 1 .27881 2.80000 3.09658 3.40239 1 .90280 2.00985 2.67615 8.08812 9.34426 9.42228 4.30023 4.43326 6.02883 1.9616 Industrial chemicals Fertilizers 1 .9506 2.3753 Personal income: Phosphate rock __ 1.9616 Industrial chemicals .__ Fertilizers 1 .9506 2.3753 Table A-2. — Impact multipliers derived from a 338-sector Florida l-O table for 1972 (Per million dollars of output) Direct Indirect Induced Multiplier Phosphate subindustry Type I Type II Output Employment: Phosphate rock 18.72889 1 1 79977 19.72519 .34728 .24005 .22312 35.28923 21.35656 34.33481 .53532 .34559 .39505 78.82812 49.39388 66.42918 .87726 .56553 .64704 1.88421 1.80991 1 .74066 1.54144 1.43963 1 .77057 4.20891 4.18600 3.36773 2.52606 2.35585 2.89998 1.5440 Industrial chemicals Fertilizers Personal income: Phosphate rock 1.3338 1 .5738 1.5440 Industrial chemicals Fertilizers _. 1.3338 1.5738 50 APPENDIX B.— DIRECT IMPACT OF THE FLORIDA PHOSPHATE COMPLEX ON FLORIDA AND THE UNITED STATES The direct impact of the Florida phosphate complex on the U.S. economy can be measured by the input coefficients, or input requirements, given in tables B-1 , B-2, and B-3. The input coefficients were obtained by dividing the 1976 dollar value of specific industry purchases by the 1976 dollar value of production. This was done for all purchases at the two- digit Standard Industrial Classification (SIC) level for each of the three sectors of the phosphate complex. Thus the input coefficients show the distribution of inputs for each dollar of production. For example, in the mining sector about $0.0004 cents out of every dollar of output represented purchases of lumber and wood products. All of the purchased inputs shown in table B-1 amount to approximately $0.58. The residual amount of about $0.42 includes profits and other items not specified in the table. The National Impact MINING SECTOR PURCHASES The Florida and North Carolina mining sector produced approximately 37,697,000 metric tons of bulk phosphate val- ued at $867,090,000 in 1976, according to a Bureau of Mines estimate. These figures represent a unit price of $23 per metric ton of marketable production. Almost all of this pro- duction occurred in central Florida. The pricing of marketable phosphate rock production varies greatly, depending on the end use of the phosphate. Over 20 percent of Florida's production is exported from the Ports of Tampa, Boca Grande, and Jacksonville. The price per metric ton of high-grade (75 bone phosphate of lime) phos- phate rock exported from the Port of Tampa in 1976 was $34. In contrast, the average cost of production of a metric ton of phosphate rock (wet) at the mine was estimated for Florida severance tax purposes to be $10.85. Because of the great variation in the unit price of marketable phosphate as reported by the industry, all Florida production was valued at the 1976 national average unit price of $21 .25 per metric ton (f.o.b. plant) for the purpose of computing the input coeffi- cients shown in tables B-1 , B-2, and B-3. This price is higher, on the average, than the transfer price established by most Florida mining operations for internal transfers. Most of Flor- ida's marketable phosphate rock is used in Florida in inter- grated chemical production facilities. Most phosphate pro- duced and used in the State is not sold through organized markets. Table B-1 underscores the effect of using a national av- erage price to value Florida's phosphate production. The higher price results in a residual of over $0.42 per dollar of output. Nonetheless, the relative importance of purchased inputs can be effectively shown using data based on the national av- erage unit price rather than the transfer price reported by the industry. The most important mining sector input in 1976 was con- tract work and services, as shown in table B-1 . This input amounted to about $0.14 out of every dollar of mining pro- duction. A comparison of this and other inputs shown in tables B-1 , B-2, and B-3 suggests that production requirements for the mining sector are quite different from those of other sectors in the complex. Labor costs, including fringe benefits, were the next most important expenditure item in the mining sector, amounting to about 10 percent of the value of production. The relatively low labor cost in the phosphate mining sector reflects the high level of capital intensity in this sector. Electric utility services were also important purchased in- Table B-1.— Estimated input requirements as a percentage of total production for the phosphate mining sector of the Florida phosphate complex, 1976 1 NAp Not applicable. ' Based on data gathered through a Bureau of Mines survey and interviews by Florida State University personnel 2 Standard Industrial Classification. 3 Input requirements were computed by dividing the 1976 dollar value of input purchases by the 1976 dollar value of production. Adjusted to reflect known industrial structure in Florida. SIC 2 Input requirement 3 Inputs originating in Florida, estimated percent- age Lusiber and wood products 24 28 29 30 33 34 35 36 37 NAp 4911 4924 NAp NAp NAp NAp NAp NAp 0.0004 .0401 .0010 .0006 .0114 .0098 .0443 .0156 .0019 .0431 .0879 .0051 .1441 .0977 .0191 .0281 .0290 .4208 100 46 4 80 63 91 45 80 68 69 100 100 89 100 100 100 100 NAp Chemicals and allied products Petroleum refining and related industries Rubber and miscellaneous plastic products Primary metal industries Fabricated metal products Machinery, except electrical ... Electrical and electronic machines Transportation equipment . Other supplies and parts Electric services Natural gas distribution . Contract work and services Labor Sales tax Property tax Severance tax . Residual Total 1 .0000 NAp 51 Table B-2.— Estimated input requirements as a percentage of total production for the phosphatic fertilizers sector of the Florida phosphate complex, 1976 1 SIC 2 Input requirement 3 Inputs originating in Florida, estimated percent- age Phosphate rock 1475 1477 26 28 29 30 32 33 34 35 36 37 NAp 4911 4924 NAp NAp NAp NAp NAp "0.1765 .2119 .0003 .0935 .0171 .0021 .0006 .0034 .0096 .0171 .0049 .0005 .0595 .0427 .0044 .0284 .1080 .0272 .0137 .1786 100 Sulfur Paper and allied products Chemicals and allied products Petroleum refining and related industries Rubber and miscellaneous plastic products Stone, clay, glass, and concrete products Primary metal industries Fabricated metal products __ 5 95 52 96 70 75 91 Machinery, except electrical __ 66 Electrical and electronic machinery Transportation equipment 86 100 Other supplies and parts 13 Electric services 100 Natural gas distribution ._. 100 Contract work and services _ 93 Labor Sales tax 100 100 Property tax Residual 100 NAp Total 1 .0000 NAp NAp Not applicable. 1 Based on data gathered through a Bureau of Mines survey and interviews by Florida State University personnel. 2 Standard Industrial Classification. 3 Input requirements were computed by dividing the 1976 dollar value of input purchases by the 1976 dollar value of production. 4 This represents a unit price for phosphate rock that is below the market price. 5 Adjusted to reflect known industrial structure in Florida. Table B-3. — Estimated input requirements as a percentage of total production for the industrial chemicals sector of the Florida phosphate complex, 1976 1 SIC 2 Input requirement 3 Inputs originating in Florida, estimated percent- age Phosphate rock 1475 1446 24 26 28 29 30 33 34 35 36 37 NAp 4911 4924 NAp NAp NAp NAp 0.1801 .0066 .0007 .0002 .0012 .0170 .0022 .1462 .0030 .0095 .0264 .0005 .0877 .2111 .0133 .0092 .1191 .0050 .1610 100 Silica Lumber and wood products, except furniture Paper and allied products 100 100 Chemicals and allied products Petroleum refining and related industries Rubber and miscellaneous plastic products Primary metal industries Fabricated metal products 4 5 Machinery, except electrical 3 Electrical and electronic machinery Transportation equipment ___ 100 Other supplies Electric services NAp 100 Natural gas distribution _ Contract work and services Labor Sales tax 100 100 100 100 Residual NAp Total 1 .0000 NAp NAp Not applicable. 1 Based on data gathered through a Bureau of Mines survey and interviews by Florida State University personnel. 2 Standard Industrial Classification. 3 Input requirements were computed by dividing the 1976 dollar value of input purchases by the 1976 dollar value of production. * Adjusted to reflect known industrial structure in Florida. 52 Table B-4. — Production by the Florida fertilizer chemicals sector and estimated value, 1976 Subsector Quantity, thousand metric tons Value, thousands Unit price Sulfuric acid '223 1 1,382 2,990 $7,405 286,004 310,285 2 $33.18 Phosphoric acid 3 207.00 Superphosphates and other phosphatic fertilizer materials including diammonium phosphate 3 1 03.77 Total 603,694 NAp NAp Not applicable. 1 Figure is for interfirm shipments, rather than actual production, since product is primarily used internally. 2 Based on Florida shipments. 3 Based on national shipments. Source: U.S. Department of Commerce, Bureau of the Census, and personal interviews. puts in this sector. Electricity accounted for about $0.09 out of every dollar of output. Despite the large volumes of elec- tricity purchased, there were no self-generators of electricity in the sector; all electricity was purchased from public utilities. Other significant inputs in the mining sector were chemical and allied products, machinery, and inputs from the primary metals industries. The sector also paid significant State and local taxes. Severance, sales, and property taxes amounted to approximately $0,075 per dollar of mining sector output in 1976. This does not include the payment of a small State corporate income tax. PHOSPHATIC FERTILIZERS SECTOR PURCHASES The phosphate fertilizers sector is the most important proc- essing sector of the Florida phosphate complex. The major fertilizer chemicals produced by this sector are sulfuric acid, phosphoric acid, diammonium phosphate, superphosphates, and other phosphatic fertilizer materials. The value of total interplant marketed production by Florida facilities in 1976 was estimated to be $603,700,000 (table B-4). The Florida phosphatic fertilizers sector is a major producer of sulfuric and phosphoric acid. However, a large portion of this production is used internally in the production of phos- phatic fertilizers. The estimate of $603,700,000 represents marketable production not used in further processing in the phosphatic fertilizers sector and therefore understates the actual physical output of some of the products of this sector. The superphosphates, diammonium phosphates, and other phosphatic fertilizer materials represent final products of the sector. Production of these products results in either interfirm shipments or inventory accumulation. It should be empha- sized that the figures given in table B-4 for sulfuric and phos- phoric acid represent only interfirm movements of these prod- ucts. Sulfuric acid and phosphoric acid used on an interfirm basis are intermediate products, and the value of these in- termediate products is represented in the price of the final products (superphosphates, diammonium phosphates, and other fertilizer materials). The importance of various purchased inputs relative to the marketed production of the phosphatic fertilizers sector is apparent from table B-2. Raw material inputs in the form of phosphate rock, ammonia, and sulfur accounted for about $0.48 out of every dollar of fertilizer chemical output in 1976. This figure, however, understates the actual value of raw materials purchased by the sector because the transfer price of phosphate rock is less than its market price. For purposes Table B-5. — Estimated value of purchases (total and Florida only) by the phosphate mining sector of the Florida phosphate complex, 1976 1 2 SIC 3 Value of all purchases," thousands Value of Florida purchases, thousands Lumber and wood products ___ 24 28 29 30 33 34 35 36 37 NAp 4911 4924 NAp NAp NAp NAp NAp $304.6 30,538.5 761.6 456.9 8,681.8 7,463.3 33,737.1 11,880.3 1,447.0 32,823.2 66,941.1 3,884.0 109,740.8 74,404.4 14,545.8 21 ,399.8 22,085.2 $304.6 Chemicals and allied products 14,047.7 Petroleum refining and related industries Rubber and miscellaneous plastic products Primary metal products 365.5 5,469.5 Fabricated metal products 6,719.6 Machinery, except electrical 15,181.7 Electrical and electronic machinery Transportation equipment __ 9,504.2 984.0 Other Supplies and parts Electrical service Natural gas distribution Contract work and services ... Labor Sales tax 22,648.0 66,941.1 3,884.0 97,669.3 74,404.4 14,545.8 Property tax Severence tax 21,399.8 22.085.2 Total 441,095.6 376,226.4 NAp Not applicable. 1 Based on data gathered through a Bureau of Mines survey and interviews by Florida State University personnel. 2 The estimates presented are based on an output value of $761 ,560,000 for the Florida mining sector. This value represents 35.8 million metric tons of phosphate rock production valued at $21 .25 per metric ton. 3 Standard Industrial Classification. 4 The total value of purchases from each industry (or labor purchased, or tax paid, where applicable) was obtained by multiplying the applicable input requirements per unit of output by the estimated value of mining output for Florida ($761,560,000). of internal accounting, fertilizer chemical establishments un- derprice phosphate rock when estimating the cost of raw materials in their product in process. Labor costs, including fringe benefits, amounted to about $0.1 1 out of each dollar of output. As was the case with the mining sector, this indicates a very capital-intensive produc- tion process. Other important inputs in the phosphatic fertilizers sector include chemicals and allied products, electric services, and contract work and services. The sales tax collections and property tax payments of this sector amounted to over $0.04 for every dollar of output. INDUSTRIAL CHEMICALS SECTOR PURCHASES The industrial chemicals sector of the Florida phosphate complex is relatively insignificant compared to the mining and fertilizer sectors. The basic output of this sector is elemental phosphorus, which is used in a wide variety of industrial ac- tivities. The primary input requirements in the industrial chemicals sector are phosphate rock, coke, electric services, and labor, as shown in table B-3. The most important input, electric services, accounted for about $0.21 out of every dollar of production, making this sector the most energy-intensive sec- tor of the complex. However, none of the Florida firms making up the industrial chemicals sector were self-generators of electricity. The industrial chemical sector, like the other two sectors, uses capital-intensive production processes. Impact on Florida MINING SECTOR PURCHASES A very large percentage of phosphate mining sector pur- chases, as shown in tables B-1 and B-5, are obtained from 53 Florida producers. Only one major input, petroleum products, is purchased exclusively outsid" the State. This does not mean that the mining sector does not purchase petroleum products from Florida jobbers and wholesalers, but rather that the petroleum products it purchases are not manufactured in the State. With this one exception, the impact of the phos- phate mining sector is very significant for the economy of Florida. More than 85 percent of the value of the mining sector's 1976 purchases, as estimated in table B-5, were purchased from manufacturers in Florida. Including taxes and labor, these purchases amounted to about $376,226,000. The significant mining sector inputs representing products bought from Florida firms are contract work and services and electrical services. These inputs were estimated at approxi- mately $97,669,000 and $66,941,000, respectively, in 1976. In addition, wage payments by the mining industry have a significant impact on the central Florida region. PHOSPHATIC FERTILIZERS SECTOR PURCHASES The phosphatic fertilizers sector of the Florida phosphate complex has a relatively smaller impact on the Florida econ- omy than does the mining sector. This is because the fertilizer sector obtains all of its sulfur and anhydrous ammonia, which are major purchased inputs for this sector, from sources out- side the State. Sulfur, obtained primarily from the Gulf Coast area and Mexico, is used to produce sulfuric acid, which is consumed internally in the production of fertilizer chemicals. Anhydrous ammonia is used to make most of the solid forms of nitrogenous fertilizers. Approximately 60 percent of all the sector's purchases were made in Florida in 1976, based on the data given in table B- 6. The estimated value of these purchases was about $292,957,000. The most significant purchase was phosphate Table B-6.— Estimated value of purchases (total and Florida only) by the fertilizer chemcials sector of the Florida phosphate complex, 1976 1 2 SIC 3 Value of all purchases, 4 thousands Value of Florida purchases, thousands Phosphate rock 1475 1477 26 28 29 30 32 33 34 35 36 37 NAp 4911 4924 NAp NAp NAp NAp $106,552.0 127,922.8 181.1 56,445.4 10,323.2 1 ,267.8 362.2 2,052.6 5,795.5 10,323.2 2,958.1 301.8 35,919.8 25,777.7 2,656.3 17,144.9 65,199.0 16,420.5 8,270.6 $106,552.0 Sulfur Paper and allied products 172.0 Chemicals and allied products 5 Petroleum refining and related industries 29,351.6 Rubber and miscellaneous plastic products Stone, clay, glass, and concrete products Primary metal industries 1,217.1 253.5 1,539.4 Fabricated metal products Machinery, except electrical 5,273.9 6,813.3 Electrical and electronic machinery Transportation equipment 2,544.0 301.8 Other supplies and parts Electric services Natural gas distribution Contract work and services Labor Sales tax 4,669.6 25,777.7 2.656.3 15,944.8 65,199.0 16,420.5 Property tax 8,270.6 Total 495,874.5 292,957.1 NAp Not applicable. 1 Based on data gathered through a Bureau of Mines survey and interviews by Florida State University personnel. 2 The estimates presented are based on an output value of $603,694,000 for the Florida fertilizer chemicals sector. This output value was estimated from U.S. Department of Commerce, Bureau of the Census, data. 3 Standard Industrial Classification. 4 The total value of purchases from each industry (or labor purchased, or tax paid, where applicable) was obtained by multiplying the applicable input requirement per unit of output by the estimated value of fertilizer chemicals output for Florida ($603,694,000). 5 A major item in this category is ammonia. 54 Table B-7. -Estimated value of purchases (total and Florida only) by the industrial chemicals sector of the Florida phosphate complex, 1976 1 2 SIC 3 Value of all purchases," thousands Value of Florida purchases, thousands Phosphate rock 1475 1466 24 26 28 29 30 33 34 35 36 37 NAp 4911 4924 NAp NAp NAp NAp $4,654.6 170.6 18.1 5.2 31.0 439.4 56.9 3,778.5 77.5 245.5 682.3 12.9 2,266.6 5,455.8 343.8 237.8 3,078.1 129.2 2,620.7 $4,654.6 Silica Lumber and wood products, except furniture Paper and allied products 18.1 5.2 Chemicals and allied products Petroleum refining and related Industries .. Rubber and Miscellaneous plastic products Primary metal industries ... Fabricated metal products . ... 2.8 Machinery, except electrical Electrical and electronic machinery 7.4 682.3 Transportation equipment Other supplies Electrical supplies Natural gas distribution Contract work and services Labor Sales tax .. .. _ NA 5,455.8 343.8 237.8 3,078.1 129.2 Residual Total 24,304.5 14,615.1 NA Not available. NAp Not applicable. 1 Based on data gathered through a Bureau of Mines survey and interviews by Florida State University personnel. 2 The estimates presented are based on an output value of $25,844,450 for the Florida industrial chemicals sector. This value was estimated from wage and salary data for the sector. 3 Standard Industrial Classification. 4 The total value of purchases for each industry (or labor purchased, or tax paid, where applicable) was obtained by multiplying the applicable input requirement per unit of output by the estimated value of industrial chemicals output for Florida ($603,694,000). rock, which was valued at $106,552,000. Altogether, $29,352,000 worth of chemical products were purchased from Florida manufacturers as inputs to the phosphatic fertilizers sector. This was over half the value of all chemicals pur- chased as inputs by the sector. The sector purchased about $25,777,000 worth of electricity in Florida in 1976, reflecting its extensive use of electrical machinery. Wage and salary payments to Florida residents were es- timated at approximately $65,199,000. INDUSTRIAL CHEMICALS SECTOR PURCHASES The industrial chemicals sector has the smallest impact on the State of any of the three sectors studied. The value of total Florida output from th ; s sector was estimated at $25,844,450 for 1976, with elemental phosphorus accounting for most of the sector's production and sales. About 60 per- cent of the sector's purchases originated in Florida in 1976, as indicated by the data in table B-7. This amounted to an expenditure in Florida of $14,615,100. The relative impact of the industrial chemicals sector on Florida is about the same as that of the phosphatic fertilizers sector but is considerably less than that of the mining sector. The major Florida purchases of the industrial chemicals sector were electrical services, phosphate rock, and labor. These three categories alone amounted to about 90 percent of all the sector's purchases from Florida. The industrial chemicals sector is the most energy-intensive of the three sectors, because of its use of electric furnaces in the man- ufacture of elemental phosphorus. Inputs this sector obtains from outside the State include petroleum products, coke, and silica. Distribution of Sales MINING SECTOR Estimates of the distribution of mining sector sales by Flor- ida firms are given in table B-8 for 1 976. About 52 percent of the 35,834,000 metric tons of phosphate rock sold from Florida plants was used within the State in the production of Table B-8.— Estimates of the distribution of sales by the mining sector of the Florida phosphate complex, 1976 1 Market Quantity sold, thousand metric tons Percent of total Fetilizer chemicals sector: Florida __ Rest of United States 18,404 8,807 ( 3 ) 8,275 52 25 Industrial chemicals sector: 2 Florida Exports ( 4 ) 23 Total ____ 35,800 100 ' Based on data obtained from a Bureau of Mines survey; interviews by Florida State University personnel; the Ports of Jacksonville, Tampa, and Boca Grande; and the Florida Phosphate Council. 2 Data for the rest of the United States were not available for this sector. 3 Less than 500,000 metric tons. " Less than 1 percent. 55 Table B-9.— Estimates of the distribution of sales by the fertilizer and industrial chemicals sectors of the Florida phosphate complex, by product line, 1976 Product Quantity sold, thousand metric tons 223.2 987.0 1 772 NA 395.0 '2,819.8 .3 Domestic sales (Florida and United States): Sulfuric acid Phosphoric acid _ Superphosphates and other fertilizer materials Phosphorus Export sales: Sulfuric acid Phosphoric acid Superphosphates and other fertilizer materials Phosphorus NA Not available. ' Exports and domestic shipments of superphosphates and other fertilizer materials exceeded Florida production by 601 ,000 metric tons. This reflected a drawdown of inventories and may have also resulted in part from differences in data classification. Sources: U.S. Department of Commerce, Bureau of the Census: and Port Authorities of Tampa, Boca Grande, and Jacksonville. fertilizer chemicals. About 25 percent of this total went to other States for further processing, and about 23 percent was exported. A very small portion of the mining sector's output was used in the production of industrial chemical" The per- centages shown in table B-8 reflect tonnages sold and not the value of sales. Since export prices are considerably higher than the domestic price of phosphate rock, a distribution ac- cording to sales value would be significantly different 4han the distribution shown in this table. The largest importers of Florida phosphate rock are Bel- gium, Brazil, Canada, Japan, Iran, the Republic of Korea, Mexico, and the Netherlands. In addition, France, India, and Poland import significant amounts of Florida rock. Most of Florida's exported phosphate rock tonnage is shipped from the Port of Tampa. FERTILIZER AND INDUSTRIAL CHEMICALS SECTORS The preponderance of sales by these sectors are sales of agricultural chemicals. Most of the fertilizer chemicals are sold for export. In 1976 nearly 2,820,000 million metric tons of superphosphates and other fertilizer materials were ex- ported (table B-9). Brazil, France, India, Italy, and Poland are all major importers of Florida fertilizer chemicals. Phosphoric acid is the primary product sold domestically by the Florida fertilizer and industrial chemicals sectors. It is used in both agricultural and industrial activities. The two sectors' sales of phosphoric acid in 1 976 amounted to 987,01 7 metric tons. Large tonnages of both phosphoric and sulfuric acid are produced and used internally in the Florida phos- phate complex and are therefore not included in table B-9, which shows only interfirm sales. A major portion of the 223,1 68 metric tons of sulfuric acid sold in the United States in 1976 represented byproduct sales by Florida plants primarily en- gaged in phosphoric acid production. 56 APPENDIX C— AGRICULTURAL FORWARD LINKAGE 1 Precise knowledge of the total value of agricultural products which can be attributed to phosphatic fertilizer use requires information on the contribution of the fertilizer input with all other inputs held constant. This information is needed at two stages of production: (a) farm receipts and (b) retail outlet receipts. We attempted to solve this problem in the following way. First, through the use of production function theory in con- junction with a very large sample of experimental data, we estimated the marginal contribution of phosphatic fertilizer to the value of four important crops. Although the experimental data are more than 1 years old (D. B. Ibach and J. R. Adams, 1968), the crop yield functions developed from the data gave yield results for 1976 that were in the most important case close to actual 1976 farm-gate prices of the four major crops in order to obtain estimates of additional value added to the product. Crop yield estimates were developed for major crops in each state by parts of the 99 agricultural subregions (ASR's) in the United States for 1964 (D. B. Ibach and J. R. Adams, 1968). The yield curves indicate yields at different rates of application of the nutrient to which the yield response is great- est, usually nitrogen. However, the yield curve could be re- estimated in terms of the yield response of phosphorus be- cause the applications of each nutrient were not at fixed ratios. The following method is used. The estimated yield function (in terms of nitrogen) is Y = M - AR X , o: where Y = bushels per acre; M = maximum potential yield, A = the coefficient of R x , R x = the exponential yield function. Given an initial sample value of R x , say R x 1 , successive val- ues of R x are derived by multiplying R x 1 by the relative fer- tilizer application rates; i.e., N + P + K in selected application N + P + K in initial application (2) The amount of P (phosphorus oxide) per unit of x(Q ) is n P i = 1 Q D (3) where the quantity of phosphate applied in each sample is summed across all samples and x = exponent in yield func- tion at the observation in question. Therefore, Q p is the amount of phosphate per unit of the yield exponent. The value of Q p , can be viewed as the marginal input of phosphorus at the ith observation. The value of the yield (Y) at the imme- diately preceding observation minus the yield at the ith ob- servation is the marginal yield. The ratio of the marginal yield (AY,) to the marginal phosphorus application (Q p ,) is the mar- ginal product of phosphorus application at the ith observation, or MP„. = AY Q n , (4) The average product can be found by the following formula Y, AP " = Q P .,-x, (5) for the ith observation. Six crops account for about 82% of the U.S. agricultural consumption of phosphatic fertilizer. They are grain corn, wheat, cotton, soybeans, hay and pasture, oats, and barley. Fertilizer application data are available only on corn, wheat, cotton, and soybeans. Applications of phosphate on these four major crops accounted for 62% of total phosphatic fer- tilizer used in agriculture in 1976. Yield functions with respect to phosphorus for corn, wheat, cotton, and soybeans were estimated for the leading pro- ducing states from all ASR's in these states: Iowa corn, Kan- sas wheat, Texas upland cotton, and Illinois soybeans. Av- erage and marginal products were calculated as described above. It was found that 1976 phosphorus application rates placed production near the peak of the 1 964 yield curves for each crop. Therefore, only marginal products were used to calculate production values. The following assumptions are invoked: (1) The slope of the 1976 yield curves approximate those of 1964; (2) As the greatest production of each crop takes place in the selected state, it is assumed that the yield curve slope applies to all harvested lands; (3) Farmers received the average price on each crop in 1976. The farm-gate value of that part of each crop that could be attributed to phosphatic fertilizer application was calculated as follows: Phos- Total phorus acres value of receiving crop P 2 5 Average P 2 5 ap- plication Marginal x product x P.O. Average crop price, 1976 The values used appear in table C-1 ; and the estimated 1976 total crop values related to phosphate fertilizer appear in table C-2. Some $1 .8 billion of agricultural crop value can be directly traced to the use of phosphatic fertilizers in 1976. By far the greatest share of the total value is found in applications to the corn crop: some 65% of the value of the four crops is found in corn yields and some 22% in wheat yields. How accurate are estimates derived from 1964 yield data? The data base, while dated, is very rich in the sense that a Table C-1 .—Estimated marginal products, phosphatic fertilizer application rates, and average crop prices, 1976 Crop Marginal product per acre, bushels p 2 o 5 application rate, pounds Average price Corn All wheat 0.112 .107 '1.22 .003 66.7 37.2 52.1 42.3 $2.49 3.14 Cotton (upland) Soybeans .575 5.58 'Chapter from reference 6. Pounds. 57 Table C-2.— Estimated crop value attributed to the use of phosphatic fertilizer, 1972 Crop Values Percent of total Corn Wheat Cotton Soybeans $1,189,945,636 406,140,058 220,624,569 9,847,237 65 22 12 1 Total .... 1,826,557,500 100 Tabic C-4.— Uses of corn as final product, 1975-76 Product The jsand bushels Percent of total Animal feed 3,558,400 400,800 71,100 19,100 87.8 Direct food 9.9 Alcoholic beverages Seed 1.8 .5 Total 4,049,400 100.0 large number of observations were amassed over very di- verse soil and weather conditions in each state. However, it is possible that either the yield curves have since shifted up or down and/or the slope of the yield curves changed. Parallel shifts in the yield curves would not alter our marginal product findings. The accuracy of the results can be assessed by comparing predicted 1976 yields from the 1964 yield curve with actual 1976 yields. This comparison is presented in table C-3. For the most important crop, grain corn, the yields are almost identical. The yields for soybeans are not greatly divergent. However, the yield differences for wheat and cotton (upland) are substantial. We believe that the wheat yield curve shifted downward in 1976, leaving marginal products (in terms of phosphorus application) relatively unchanged. The average wheat yield in 1964 is close to the 1976 average yield. In the case of cotton it is possible that the yield-curve slope has changed in addition to the yield curve shifting upward; we cannot be certain. If all of the increase in the 1 976 cotton yield compared with 1964 is a result of an increase in marginal products unas- sociated with phosphorus, the total phosphorus value of the crop should be reduced by $1 09,429,780, which is 6% of the estimated total value of the four crops. Recall that the total value of $1 .8 billion underestimates production due to phosphatic fertilizers since the four crops considered account for only 62% of total phosphatic fertilizer used in agriculture in 1976. This is true provided that the marginal physical product of phosphatic fertilizers related to the excluded crops is positive. The estimated crops value of phosphatic fertilizer is only the "first round" impact from its application. Corn, wheat, and soybeans are further processed into food for both human and farm animal consumption. In turn, beef cattle, dairy cows, pigs, and poultry are consumed by persons, at the retail level. Cotton is processed as fiber into cloth which is used to pro- duce clothing. Of the four crops, the most important in initial value (as we see in table C-2) is grain corn. We are able to trace the phosphorus-related value of com all the way to the meat Tabic C-3.— Comparison of predicted and actual crop yields, 1976 Table C-5. — Estimated value added by phosphatic fertilizers to dairy and meat products, 1976 Crop Yield predicted at 1976 P 2 5 application rate, bushels Actual 1976 yield, bushels Percent of predicted yield actually realized Grain corn 94.5 49.4 '310.2 36.4 87.4 30.3 '464.0 25.6 92.5 All wheat 61.3 Cotton (upland) Soybeans 149.6 70.3 Product Value added Beef $601,251,800 Pork 313,288,190 Milk 12,825,034 Broilers and turkeys 734,771 Total 928,099,795 Table C-6 — Total estimated Phosphorus-produced retail Value of major related final products, 1976 Product Phosphorus-produced value Crops __ — - Dairy and meat products $1,826,557,500 928,099,795 Cotton clothing 211,799,560 Total - - 2,966,456,855 Pounds. market in the grocery store. The mark-ups on cotton are very straightforward, and we are able to derive a retail value for phosphorus-related cotton output. However, wheat and soy- beans are more difficult to trace than even corn. Of these, soybeans are relatively unimportant in magnitude and wheat is much less significant than corn. In any case, given time and budget constraints we are unable to supply the retail values of phosphorus-related wheat and soybeans output. The final product use of com is varied. Its uses in the 1975-76 market year are detailed in table C-4. By far, corn's greatest value is indirect, through the feeding of livestock and poultry that later is processed as human food. Nearly 90% of corn is used for this purpose. Therefore, we will estimate its value as beef, pork, poultry, and milk. During the 1975-76 market year corn was fed to animals as either a concentrate or directly as field corn. We applied the following procedure to the valuation of corn-fed beef, dairy cows (for milk), and poultry: (1) All grain corn concentrate was converted to bushels of corn; (2) The amount of corn per pound of animal was estimated; (3) The total pounds of meat (or milk) attributable to the phosphorus-related amount of corn was computed; (4) The meat (or milk) poundage related to phosphorus was multiplied by the average retail price of the meat or milk. The values are reported in table C-5. It is emphasized that this is a very rough estimate of these values. Raw cotton fiber was marked up by 48% at the textile mill in 1976. If we further assume that wholesale and retail mark- ups total 100% for cotton clothing, the value-added or the final product related to phosphorus is $21 1 ,799,560. These estimated values are summed in table C-6. The total product value is nearly $3 billion. 58 APPENDIX D.— A REGIONAL ECONOMIC IMPACT SCENARIO OF ASSUMED DECLINES IN MINERAL PRODUCTION FOR THE PHOSPHATE ROCK MINING INDUSTRY IN FLORIDA Background The U.S. phosphate industry is presently stable, as is the position of U.S. phosphate rock and its derivative products in world markets. A review of U.S. phosphate rock mining and processing with respect to regional economic impact suggests that the continued viability of the phosphate industry in Florida will be influenced by the existing industry conditions listed below. These conditions are the basis for the scenario which is presented later in this appendix. 1. The United States currently mines and processes 40 percent of the world's phosphate rock. 2. The State of Florida in 1978 accounted for 80 percent of the U.S. production of phosphate rock. 3. Florida produced about one-third of the world supply of phosphate rock in 1978. 4. The real costs of new investment capital for the phos- phate industry have been increasing by 6 percent per year, while the real prices of phosphate-related products have been falling since 1975. 5. Florida's high-quality reserves in Polk and Hillsborough Counties are being depleted and are expected to be largely exhausted by the end of the century. 6. Environmental regulations and competition for water and energy in the central Florida mining region have not encour- aged new mine development. 7. Technologically oriented productivity increases are lag- ging, i.e., there is a lack of new technology for concentrating low-quality, high-impurity phosphate ore deposits. 8. The present transportation system for handling phos- phate rock and related products between the central Florida region and the Port of Tampa appears to be adequate, but with future increases in output, it is expected that this trans- portation system will become a restricting factor. 9. Phosphate rock and derivative products are internation- ally traded commodities. The competitive position of Florida resources may decline as higher cost mines replace older, depleted low-cost mines. This could possibly limit the incen- tive to expand Florida's phosphate rock mining capacity. Based upon these conditions, and an assumption of de- clining production, the scenario which follows is intended as a projection of the economic profile of the Florida phosphate industry for 1990. Currently, approximately 20 phosphate rock mines are operating in Florida, producing approximately 40 million metric tons of rock per year. It is assumed in the scenario that Florida production of phosphate rock will reach a peak in 1985, and maintain the peak level until roughly 1987, and decline thereafter. The scenario considers the ef- fects of a decline in output from 1987 to 1990, but the year 1990 is highlighted. METHODOLOGY After the factors which may restrict growth are identified, a scenario is suggested that could represent the market sit- uation in 1 990. From this scenario, a likely set of employment, income, and fiscal impacts are identified. These impacts are based on an interindustry input-output (l-O) table adapted for the State of Florida (17). From the l-O table, a set of type I and type II income and employment multipliers were derived, along with a multiplier that identifies the magnitude of changes in both direct and indirect output (19). The output multipliers for the phosphate industry measure the sum of direct and indirect requirements from all sectors needed to deliver one additional dollar of phosphate industry output to final demand (consumers). These multipliers were derived by summing the entries in the column of phosphate industry data in the Leontief inverse matrix table, 1 which showed the direct and indirect requirements per unit (one dollar) of final demand for each sector. The type I income multiplier expresses the ratio of the direct plus the indirect income change to the direct income change resulting from a unit increase in final demand for the phos- phate industry. While the type II multiplier is the ratio of the direct, indirect and induced income change due to a unit increase in final demand. The type II multiplier takes into account the repercussionary effects of secondary rounds of consumer spending in addition to the direct and indirect in- terindustry effects. The employment multiplier is analogous to the type I in- come multiplier and is the ratio of the direct plus indirect employment change to the direct employment change. Sim- ilarly, the employment multiplier is parallel to the type II in- come multiplier, it measures the ratio of the direct, indirect and induced employment change to the direct employment change. The fiscal impact on the state for 1 990 was based on tax rates for years that information was readily available and valued in 1977 dollars. Assumptions The following assumptions were made for calculation pur- poses: 1 . The market price of phosphate rock is expected to reflect the real costs of new investment capital, production cost, and inflation. From a supplier's point of view, a higher selling price is justified when there is an increase in the cost of production. On the demand side (from the consumer's point of view), a price increase is acceptable only when there is a real short- age of phosphate rock. For example, if the demand for phos- phate rock is greater than the quantity supplied, a price in- crease is justified in order to allocate resources efficiently. 2. The proportion of phosphate rock equivalent available for export is a function of the level of domestic production and domestic price, foreign demand, and relative interna- tional price. 3. Technology and productivity are expected to be gen- erally stable for the next decade. No radical breakthroughs in technology or significant increases in productivity are an- ticipated. The assumption is made that any technological innovation that would increase productivity in the next decade will be offset as the richer ores are depleted and ores of lower grade with more impurities are mined. 1 The Leontief inverse matrix table was derived from a direct requirements I- O table prepared for the State of Florida. 59 4. The present number of employees per million tons of output, as factor inputs, will approximate the employment utilization rate for the 1981-90 decade. 5. The reserve position of phosphate rock will vary directly with the inflation-adjusted price and any changes in tech- nology that take place in the next 1 years. 6. The transportation system that exists in Florida at the present time — mainly the railroad and trucking system— is typical of the system that will exist there in 1990. 7. As a result of inflation and increasing costs, the valuation of phosphate rock for State severence tax purposes (which is based on operating costs) is expected to increase. An increase in this tax would be viewed by the industry as a cost and would be passed on to the consumer in the form of higher prices. Analytical Strengths and Weaknesses The strength of the type of analysis used in this scenario is its usefulness in identifying the factors that must be con- sidered in order to approximate future conditions based on existing identified trends. The shortcoming of this type of analysis, however, is its assumption that all relevant factors, other than those for which changes are stipulated, will remain unaltered. In all likelihood, even if the predictions of this scen- ario hold up, the pricing structure of the market will be altered in response to changes in supply. Scenario for 1990 In this scenario, probable economic conditions are as- sumed which could by the end of this decade inhibit the long- term growth that has been characteristic of the Florida phos- phate industry. Specifically, it is the growth of the industry's new and replacement productive capacity that is expected to be limited by future economic constraints, according to this scenario. Consequently, the scenario assumes that produc- tion by the Florida phosphate industry will be declining by the end of the decade. The scenario describes the projected regional impact that the assumed decline in production would have on the State of Florida and also projects the value of the lost output (phos- phate rock and fertilizer products) that would result. The prob- able employment, income, and fiscal impacts that capacity reductions would have for the year 1990 are also analyzed. ASSUMED LIMITS TO GROWTH The assumed limits to the industry's capacity growth have to do with the price of phosphate rock, capital costs, ore extraction considerations, government regulation, and the adequacy of transportation between the Florida phosphate district and the Port of Tampa. In addition to these constraints, lags in capacity growth are also expected to result from the depletion of reserves in operating mines. Price Probably the most important of the assumed limits to ca- pacity growth will be the price of phosphate rock. At the present time, it appears that the price of phosphate rock is stable, but all indications suggest that the price will increase in the future. If the price does increase, it is likely that this would weaken the competitive position of Florida and other U.S. phosphate rock in the wond market. Capital Costs It has been estimated by the Bureau that real capital costs of the phosphate industry are increasing by 6 percent a year. If the market price of phosphate rock does not keep pace with escalating capital costs, investment will likely be dis- couraged. Ore Extraction Considerations The location and quality of phosphate ore are major factors in evaluating the costs of extraction. Compared with previ- ously mined deposits, some new deposits have deeper ov- erburdens, thicker matrices, lower pebble-to-feed ratios, lower grade ore compositions, and higher levels of impurities. It is expected that these factors will result in increased production costs and delays in development. Further delays and additional costs are expected to arise from the development of commensurate technology for han- dling the ore bodies. Through new technology it may be pos- sible to extract more phosphate from the matrix, but this technology has yet to be developed. Government Regulation The Florida phosphate industry is under the authority of numerous Federal, State, county, and district agencies and regulations. Regulation by these agencies can result in eco- nomic impacts for the industry. In the next decade, environ- mental regulations, in particular, may lead to economic im- pacts, both in terms of delays in development of new mines and increased costs. These delays and cost increases may in turn adversely affect expansion of the industry's productive capacity, either directly or indirectly. From 5 to 7 years may elapse between the time a firm decides to mine at a specific location and the time that ap- proval for mining is received. The process leading to approval to mine begins with a Development of Regional Impact (DRI) application. This is a document prepared by the mining com- pany that details proposed construction, mining, and plant operations. The DRI application details the impact of the pro- posed mining on housing, roads, water resources, air quality, etc. It is reviewed by local, regional, and State bodies. If the DRI is approved, the company may then apply for mining permits from the regulatory agencies. A list of agencies from which permits must be obtained is provided in table D-1 . After approval of a DRI, each mining operation is subject to regulation by Federal agencies, including the Environ- mental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA), Mining Enforcement and Safety Administration (MESA), and the U.S. Geological Survey (USGS). In addition, phosphate operations in Polk and Hills- borough Counties are subject to the authority of the following State, county, and district agencies and regulations: 1 . Florida Department of Natural Resources 2. County Protective Development Regulation 3. County Lime Rock Mining Ordinance 4. County Zoning Ordinance 5. County Building Code 6. County Health Department 7. County Environmental Protection Act 8. Southwest Florida Water Management District 60 TABLE D-1.— Mining and processing permits and approvals Permit 1 Agency FEDERAL Ambient Air Quality (CAA) Emission Standards (CAA) Pre-Construction Review and Approval (CAA) Water Quality (CWA, NPDES) Dredge and Fill permit (NPDES) .... Environmental Impact Statement (NEPA) U.S. Environmental Protection Agency. Do. Do. Do. U.S. Army Corps of Engineers. Council of Environmental Quality and responsible agency. STATE Development of Regional Impact ... Division of State Planning (through Regional Planning Council). Air Quality (FAWPCA): Department of Environmental Reg- ulation. Permits to construct Do. Permits to operate Do. Permits to maintain Do. Permits to expand Do. Permits to modify Do. Water Quality (FAWPCA): Do. Industrial Waste Water Do. Dredge and fill Do. Drainage well permit Do. Potable Water Supplies (FSDWA) .. Do. Dam Construction Do. Construction of Wells Water Management District. Consumption Water Use Do. Works of the District Do. Management and Storage of Surface Do. Waters Licensing of Radioactive Material ... Department of Health and Reha- bilitative Services. Reclamation Department of Natural Resources. LOCAL Zoning Operating (Mining Ordinance) Master Plan approval Development Order Building permit Pollution Control Well Drilling (County government). Do. Do. Do. Do. Do. Do. 1 Abbreviations shown in this column are identified as follows: Federal: CAA, Clean Air Act; CWA-NPDES, Clean Water Act-National Pollutant Dis- charge Elimination System; NEPA, National Environmental Policy Act; State: FAWPCA, Florida Air and Water Pollution Control Act; FSWDA, Florida Safe Drinking Water Act. 9. Florida Department of Environmental Regulation As mining progresses into other counties, similar ordinances, codes, and regulations may also be adopted by those coun- ties. Transportation Another possible constraint on capacity growth is the un- certainty of the continued development of an adequate trans- portation system for phosphate rock and related products. The rail and truck transportation corridor between the central Florida phosphate district and the Port of Tampa is presently operating near capacity. The major portion of the total rail traffic in the corridor is comprised of trains carrying phosphate rock, phosphate prod- ucts, and/or related products. Rail is the primary mode for high-volume movements of dry phosphate rock from bene- ficiation plants to shipping ports and from beneficiation plants to chemical plants (7). In 1977 rail traffic in the corridor nan- Table D-2. — Estimated tonnage of truck shipments between Tampa and phosphate plants, 1977. Product Total shipments, short tons Loads per day Tampa to phosphate plants: Fuel oils, Nos. 5 and 6 '4,400,000 3,500,000 165,000 145,000 NA 2,000,000 1 ,400,000 825,000 187,000 120 Sulfur, molten Ammonia, anhydrous Caustic soda 450 32 20 Diesel fuels NA Phosphate rock plants to Tampa: Phosphate rock Triple superphosphate and diammonium phosphate Phosphoric acid Defluorinated phosphate 260 148 110 27 NA Not available. 1 Barrels. died more than 14 million short tons of phosphate products for international trade and another 9 million short tons for the domestic market. The volume of phosphate and other rail traffic is so large, however, that it significantly contributes to motor vehicle traffic congestion. The railroad crosses a major highway at least three times on its route from the mining district to the Port of Tampa. As a result, trains crossing the highway cause motor vehicle traffic congestion at any time of day, 7 days a week. There are as many as 10 trains daily, and each causes a 15-minute delay, so there can be delays totaling 2 1 /2 hours each day at each crossing. Trucks also use this transportation corridor to haul phos- phate rock and related products. In 1 977 the trucking industry hauled approximately 2 million short tons of phosphate rock to the Port of Tampa, as shown in table D-2. The same trucks took back to the phosphate district 3.5 million short tons of liquid sulfur; 4.4 million short tons (combined) of diesel fuel, fuel oil for flotation, gasoline, and kerosene; and other items (6). 2 ASSUMPTION OF DECLINING PRODUCTION The assumption is made in this scenario that phosphate rock production in Florida will increase from 40 million metric tons in 1979 to approximately 55 million metric tons per year in the 1 985-87 period. Expansion of existing mines and planned new mines are expected to account for the increase. How- ever, it is further assumed that production will decline after 1987, falling off to 47 million metric tons in 1990. At the present time, only a few companies are known to be planning the introduction of replacement capacity to offset this antic- ipated decline in production. This means that a net reduction in output of approximately 8.8 million metric tons can be expected between 1987 and 1990. This loss of output would amount to 1 6 percent of the projected annual production for the 1985-87 period. EFFECTS OF DECLINING PRODUCTION The impact of the previously described assumed bottle- necks to capacity expansion and utilization and the projected production decline of 8.8 million metric tons of phosphate rock between 1 987 and 1 990 is projected below for the year 1990. A capacity utilization rate of 90 percent is projected. It 2 Also based on Tampa Port Authority data and other data. 61 is assumed that the decline in production will have a similar direct effect on the manufacturing of phosphate fertilizer and related products. Direct and Indirect Output Based on interindustry input-output multipliers that have been developed for the Bureau for regional impact use (17, 36) the following measurements of the Florida phosphate industry's direct and indirect output are expected in 1 990 (with estimates given in million 1977 dollars): Mining benefication Fertilizer manufacturing Combined Direct output' 196 116 209 162 2 405 Indirect output 277 Total 312 371 682 1 Output is valued at 1977 prices and a weighted average of domestic and export product. 2 Output has been adjusted for doublecounting of value added. Based solely on these projections, it is projected that the industry's direct output (sales) will decline by approximately $405 million by 1990, on an annual basis. The total effect of the projected production decline, however, would be greater than $405 million. In addition to sales by the phosphate in- dustry, sales of goods and services to the industry by its suppliers (or second-level effects) must also be included. In turn, third-level suppliers' sales (those necessitated by phos- phate industry activity to second-level suppliers) must also be included. In addition to the output effect, further reper- cussions would be felt throughout the Florida economy. The total direct and indirect output loss during 1990 is esitmated to be $682 million. Furthermore, it is likely that a similar sit- uation will exist in 1991. Employment and Income Employment and income would also be affected by a de- cline in phosphate production. An estimate of employment associated with the projected decline in production, as de- scribed above, has been calculated as follows for 1990: Number of jobs Direct 1 2,000 Indirect 1,800 Induced 4,000 Total 7,800 1 The assumption is made that the employment effect would weigh equally on the mining and benefication and the fertilizer proc- essing industries. The total employment effect of the reduction in capacity would be the loss of approximately 7,800 jobs. Since the phosphate industry's employees are among the highest paid in the State, the loss of these jobs would result in a significant income loss. It is estimated that a total employment income of $74 million will be lost in 1 990 due to restricted capacity growth of the Florida phosphate industry. This $74 million in projected lost income, which was previously included in the total output figure of $682 million, is broken down as follows, in million 1977 dollars: Direct income 26 Indirect Income 19 Induced income 29 Total 74 Taxes Along with the income effect, it is projected that a corre- sponding tax revenue or fiscal impact will be felt at all levels of Florida government. Based on the amount of 1 976 property taxes paid by the phosphate industry, it is estimated that the State will lose approximately $6 million in property taxes from •he industry in 1990. This tax loss and other projected tax losses for 1990 are shown below, in million 1977 dollars. State property taxes 6.0 State corporate income tax .6 State severence tax 10.0 Ad valorem county tax .8 Total 17.4 The State corporate income tax loss is estimated to be $600,000, based on the State corporate income tax the in- dustry paid in 1976. The loss in State severence tax is es- timated at approximately $10.0 million — which is a very con- servative estimate — based on the 1977 severence tax rate of $1 .27 per metric ton. 3 The ad valorem county tax loss is estimated at $794,000, which is based on the approximate 1977-78 tax paid by the industry. It is estimated that the total loss of Florida tax revenues as a result of the projected de- cline in phosphate production will be $1 7.4 million for the year 1990(6, 22). Possible Benefits of Production Delays A discussion of this scenario would not be complete without some mention of the possible beneficial effects that delays in phosphate rock production could have. Delays in produc- tion would provide technological innovation time for seeking solutions to the many problems involved in recovering larger quantities of lower grade phosphate from the matrix and pos- sibly shortening the time required to reclaim land for other useful purposes. Production delays would also extend the life of reserves. In addition, some land that might otherwise be used for mining could possibly be released for other uses as a result of delays in production; these other uses might include agricultural, residential, commercial, or recreational uses. SUMMARY AND CONCLUSIONS It is assumed that the capacity growth of the Florida phos- phate industry will be restricted by the end of this decade as a result of the depletion of high-grade reserves and also because of certain economic, environmental, regulatory, technological, and transportation constraints. As a result of this restricted growth, the following effects, relative to the Florida phosphate industry, are projected for the year 1990: 4 3 This severance tax rate was applied to 10 percent of the value of the phos- phate rock at the point of severance. This tax applies only in Florida (11). 4 All values are in 1977 dollars. 62 1. There will be a loss in direct output of 8.8 million metric 3. The income loss due to restricted capacity (which is tons of phosphate rock and 2.6 million metric tons of phos- included in the value of output described above) will total phate fertilizer with a combined value of $405 million. To- approximately $74 million. gether with a commensurate $277 million loss of output in 4. It is estimated that the State of Florida will lose $17.4 secondary and tertiary industries, the total projected loss of million in tax revenues. output is $682 million. If the restrictions to capacity growth were to persist beyond 2. The total employment effect, including direct, indirect, 1990, the above effects would be expected to continue for and induced employment, will be the loss of 7,800 jobs. successive years. *U S GOVERNMENT PRINTING OFFICE: 1981 351-518/8603 QTi, * ."•. ,<3 v/» - ^Ifiil? • A>*^. 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