The Advantage of Manure

Stanley Buman
Agren, Inc.

The Livestock Industry

The trend of concentrating livestock into larger and larger units has produced an incredible volume of manure. Fifty years ago, farmers in Iowa had a few cows, hogs, and maybe chickens on their farms. In today's agriculture, where thousands of cattle and hogs are raised together, large amounts of feed are imported to an operation. Therefore, large amounts of manure need to be exported.

The livestock industry plays a major role in Iowa's economy. Cumulatively, the hog, cattle, and poultry industries employ about 28,000 people directly in livestock production, an additional 23,000 in livestock processing, and 108,000 in service and retail activities. Directly and indirectly, these three major livestock sectors employ an estimated 160,000 Iowans and generate $5.2 billion of personal income and $5.72 billion of value added products to the Iowa economy. (Iowa Pork Producer, June 1997.)

Livestock operations produce more than just meat and jobs. They also produce nitrogen, phosphorus, and potassium in animal manure. These nutrients can be important by-products when effectively managed and utilized for field crop production. By properly recycling these nutrients, a producer can reduce an operation's reliance on energy-intensive commercial fertilizer for crop production. Manure that is properly managed and effectively applied presents little hazard to surface water or ground water and improves soil tilth. Manure is an asset rather than a liability for Iowa.

Most Iowa farmers view manure as a waste and feel that it is something that needs to be "gotten rid of'. Instead of viewing manure as a waste, livestock producers and grain farmers need to view manure as a product that can be substituted for commercial fertilizer; an economic resource. In order to be fully utilized as a fertilizer, manure needs to be exported from those who have excess and imported by those who can properly utilize it. Unfortunately, the one-on-one technical expertise for proper manure management is significantly lacking in Iowa today. A manure brokering service can provide the one-on-one assistance to better manage manure.

Agren has recently received a grant through the Iowa Department of Economic Development to start a "Value-added" manure brokering service. This service is being designed to help those livestock producers who have excess manure transport the manure to those grain farmers who can utilize the manure as fertilizer. In most cases, livestock producers are willing to give their manure away if the grain farmer is willing to pay the cost of hauling. Agren will broker manure for those livestock producers who have excess manure (exporters) by finding grain farmers who can utilize the manure (importers). The grain farmer will be assessed hauling and application charges, plus a brokering fee.

This arrangement is a win-win situation for the importer, exporter, and the environment. The livestock producer benefits by having empty storage pits, the grain farmer benefits by receiving nutrient inputs at a lower cost, and the environment benefits from the responsible application of nutrients.

In 1996, Tom Buman started a small pilot manure-brokering project while employed by USDA's Natural Resources Conservation Service (NRCS). Due to a small operating budget and personnel shortage, only a limited program could be developed. In organizing the model for this early manure-brokering program, Buman researched the existence and success of other manure brokering programs throughout the United States. There were some limited manure brokering services developed but none were to the extent needed. The coordinators of the programs considered their manure brokering programs to be less successful than they had hoped.

In initiating the pilot manure-brokering project, Buman conducted a survey of all Carroll County landowners and farm operators to determine the level of interest in a manure-brokering program. Of the 68 people who responded to the questionnaire, 51 farmers said they would be interested in receiving, or importing manure, while 17 livestock producers said they would be willing to provide, or export manure. The names and addresses of the importers and exporters were published in a brochure, and shared with all interested parties. It was left up to the individuals to contact one another.

Although there was excellent response to the initial survey, we have no knowledge of any exchange of manure. It is our feeling that the lack of action on either the importer's or the exporter's side was due to the lack of coordination and technical assistance. Passive approaches to manure brokering have been largely unsuccessful.

To fully implement a successful manure-brokering program, we have determined that the program coordinator must take an active role in bringing together exporters and importers. In addition, the coordinator must provide the technical assistance in order to insure proper nutrient crediting and proper manure application methods.

In Iowa, during 1996, there were 24,000,000 hogs marketed (Iowa Pork Producers Association) and 2,400,000 cattle fed (Iowa Cattlemen's Association). Iowa ranks first in the nation in hog production and fifth in cattle production. (Iowa's Rank in Agriculture)

Western Iowa is known for its high concentration of cattle, hogs and cropland. Carroll County is a leader in Iowa's livestock industry, marketing the third highest number of cattle and the sixth highest number of hogs in the state. This concentration of livestock indicates that a substantial source of manure exists.

The Carroll Soil and Water Conservation District has determined that the manure produced yearly in Carroll County is estimated to be worth $5.7 million, based on fertility value. However, it has also been estimated that 75-80% of this manure is mismanaged. This represents an enormous loss of potential profits and damage to the environment. Reasons that farmers do not properly utilize manure include the following:

1. The nutrient content of manure is too inconsistent.
2. Application methods are too inaccurate to properly credit manure.
3. Using manure is too much bother. Farmers do not feel it is worth their time.
4. Individuals do not trust the fertility value of manure. They are concerned that their
5. crop yields will suffer.
6. Distribution of manure is not equal. Some individuals have more manure than they can effectively use, while others could benefit by importing manure.
7. There is a lack of agronomic expertise in the agricultural community to make recommendations to those producers who want to use manure to replace commercial fertilizer.

*(See Iowa State University Extension Pamphlet Pm-1628/August 1995.)

The livestock industry has continued to consolidate its operations over the last several years. More large confinements are being constructed to take advantage of mechanization and economies of scale, ultimately providing more profit to the producer. This will increase the need for some type of manure management program to accommodate the increased amount of manure that is produced in these facilities. "Mismanaged" manure can impair the quality of the state's water, air and soil. Agren has developed an approach that will benefit the livestock producer and grain farmer, as well as the environment. Continued consolidation ensures that Agren's manure management program will be needed now and in the future.

We are expanding our current business to include a manure brokering service. By using manure, a farmer can reduce the amount spent on fertilizer, decrease the purchase of commercial fertilizer, and help improve the quality of water in the watershed. We will coordinate a program that will match manure exporters with importers.

Many steps are involved in the coordination of this manure-brokering program.

1. The program coordinator will contact large hog and cattle producers in Western Iowa to determine where manure is available for export.
2. The program coordinator will contact grain farmers within a two to three mile area of the livestock facility, in order to broker the manure. Special emphasis will be placed on locating individuals close to the source of manure to reduce transportation costs.
3. The program coordinator will develop a manure management plan, utilizing soil testing and manure testing, to determine the correct agronomic amount of manure to apply to the cropped fields.
4. The program coordinator will develop a "manure application agreement" between the importer and exporter.
5. The program coordinator will work with trained commercial applicators or the livestock producers, to professionally remove, transport, and apply manure to the fields at the recommended rates.
6. The coordinator will ensure correct nutrient application through the use of ISU's late spring soil nitrate test and follow-up with the end-of-the-season corn stalk test.

The main competitor of manure, used to meet the nutrient needs of agricultural crops, is commercial fertilizer. A farmer typically purchases commercial fertilizer for a cost of $60 per acre, assuming a corn-soybean rotation. This fertilizer is applied every other year and supplies the nutrient needs of both crops. The nitrogen fertilizer is applied for the year in which the corn is planted.

Manure can be utilized to replace the need of commercial fertilizer. The manure would be applied in the fall or spring before planting the corn crop. Basing the application rate on the nitrogen needs of the corn crop, there would also be adequate nutrients available for the soybean crop.

An average 2000-head livestock facility generates 820,000 gallons of manure per year. By using standard "manure nutrient" book values for these calculations, a producer would apply about 3500 gallons of manure to fertilize one acre of land. Therefore, 235 acres of land are needed to utilize the manure from one facility. Since the soybean crop does not require added nitrogen fertilizer, the manure will only be applied for the corn crop (every other year in a corn-soybean rotation). Ultimately, 470 acres of land would be needed for manure application per large facility.

Transportation costs are critical to the profitability of the program. In each case, the coordinator will attempt to locate importers in close proximity to the livestock facilities for application of the manure. Custom applicators are typically paid $25 per acre (or $0.007/gallon) for manure application along with an agitation fee and mileage charge for hauling the manure.

Agren's strategy is to broker the manure to the importer for the cost of transportation and our agronomic fee. If the total cost is $40 per acre, the importer would save $20/acre that would be realized every second year. Assuming a 470-acre operation and applying manure to 235 acres each year, a savings of $4700 would be realized.

The importer will actually be receiving $78/acre worth of manure for a cost of $40/acre. The levels of phosphorus and potassium in the manure are higher than the amounts needed by the crop. These nutrients are stable in the soil and will build fertility levels for future use. (Care must be taken not to build the phosphorus levels too high.)

The livestock producer will not receive money for the manure, but will benefit by having an empty lagoon for the next year's storage. Also, the manure will have been applied in an environmentally responsible manner and meet any regulation requirements.

Most critical to the success of any business is its ability to make a profit. Those factors that affect the profitability of manure brokering are as follows:

1. The availability of manure and farmland.
2. The distances that manure will need to be transported for application on farmland.
3. The farmer's ability to cut out the "middleman" and work directly with the animal producer.
4. Contaminated land, water, air or poor crop production as a result of using manure.

To reduce the effect of these risks Agren has done the following:

1. Surveyed land owners and animal producers in the area to determine their level of interest. Has received much publicity from industry publications promoting the benefits of manure brokering.
2. Began to map out the area in Carroll County to determine probable distances between producers that have already shown interest and potential farmland.
3. A contract signed by both parties will somewhat inhibit this from occurring. While this may happen occasionally, the parties involved typically need someone else involved communicating, coordinating, and guiding the process. The research from three Universities, involved in manure brokering programs, substantiate this reasoning.
4. The coordinator of the program is a professional agronomist and recommendations will be based on the needs of the growing crop. Manure samples will be analyzed for nutrient content and recommendations will be made based on actual nutrient content instead of book values. The coordinator will train the custom applicators to apply the manure in an environmentally and agronomically correct manner.

Agren, Inc. was established for the purpose of assisting agricultural businesses, organizations, and agencies in developing and implementing environmentally sound initiatives. Agren works with both the public and private sectors, assisting organizations in designing and managing programs where agricultural issues impact the environment. Agren offers a wide variety of services that are customized to address the individual needs of its clients.

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