Abstract
A budgeting model was developed to estimate the cost of retailing dry bulk fertilizer, liquid bulk fertilizer, anhydrous ammonia, and pesticides for three sizes of facilities. Estimates were obtained of the cost to upgrade each of the model plants to comply with Indiana`s recently enacted regulations on the handling and storage of fertilizers and pesticides. In addition, various strategies (increasing price and increasing volume) that dealers might employ to rationalize these investments were assessed. Results suggest that there are significant scale economies associated with the regulations and that smaller plants will have a more difficult time rationalizing the investment than larger plants. Dealers will need to consider a range of strategies to offset the increase in annual operating costs resulting from these environmental investments.
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