Planning to sell manure this fall? Tom Deters, marketing manager for FS Total Livestock Services, has some tips to make the transaction easier for the seller and the buyer.
Agitate and analyze
“One of the things about manure is that there is a lot of variation in nutrients, even within the pit,” says Deters, based in Effingham, IL.
He suggests taking multiple samples to ensure a good representative sample of the product you are selling. “You'll want to agitate and take a sample just as you are getting ready to haul, take a sample during hauling and maybe, depending on how big the unit is, obtain a sample at the end, too.”
Send the samples to a reputable laboratory and have them analyzed for nitrogen, potash and phosphorus. Then calculate the average of the nutrient values from that source. “You can then convert it into dollars and cents based on the nutrients,” Deters says.
Be realistic about value
Deters recommends calculating the value of the manure on a “per 1,000-gallon” basis, using the nutrient values from the laboratory and comparing them to the value of commercial fertilizer with a similar nutrient profile.
The “per-acre value” can be calculated using the buyer's intended application rate. The cost of applying the manure must be subtracted to establish a net value/acre, he reminds.
Sellers of manure must realize that supply and demand are big factors in striking the exact price. “If you have only 40 acres (that could receive the manure), you don't have as much demand as if you have 4,000 acres right next to your building,” he says. “Pricing is really a supply and demand issue.”
Determine hauling and application methods
Know how the manure will be hauled and applied before you finalize a deal, Deters says. You'll need to use a certified applicator to apply the manure, plus a tanker or dragline to get it to the field. If you don't have the appropriate equipment or a certified applicator in your organization, you'll want to develop a plan for who will be doing the hauling and applying.
Spell out delivery window
Manure sellers and buyers each face time constraints for when the manure should change hands. As the seller, you must empty your pit at the appropriate time in order to maintain pig flow. Your buyer must work within Mother Nature's timetable.
“Crop farmers have a short window from harvest until the time when the ground is too wet and they have to worry about compaction,” says Deters.
He recommends drafting a formal sales agreement that spells out who or what will dictate the delivery/application date. For example, as the seller, you may want to include a “drop dead” date when your pit must be emptied. “The buyer has to understand that he may have to come at a time that is less than ideal because you have to get rid of the product,” Deters says. By the same token, the buyer may want to include a “not before” date that you'll have to work within.
Deters says having a third party involved in the transaction can help keep harmony. His company often acts as a facilitator between livestock producers and crop growers in manure transactions. “Sometimes it is easier for us to monitor what's happening on both sides,” he says.
For more information, contact Deters at [email protected].