Cashing in on Manure's Value

Hog manure: a new cash crop?

Until recently, Bob Johnson hadn't calculated the exact value of liquid manure generated at his family's farrow-to-finish hog operation.

But with anhydrous ammonia selling for more than $500/ton, it was clear that every drop held real value for the family's 2,000-acre grain farming operation near DeKalb, IL.

When Johnson finally penciled out the value of the three million gallons applied annually, he came up with a value of $24,500 for the nitrogen (N) alone, at a 160-lb./acre rate. The value about doubles when he figures in phosphorus and potassium. With a $50,000 fertilizer savings, “pig manure doesn't smell near as bad as it once did,” he jokes.

There are costs with handling liquid manure, Johnson quickly points out. They bought a semi tanker to haul manure to nearby fields. One tractor is delegated on manure application days, plus one or two employees to apply it.

“Intrinsically, we know we are well ahead of the game,” he says.

Johnson's not alone in his appreciation for the value of hog manure. In fact, it's become a hot commodity with grain farmers who are now willing to buy, trade or contract for manure, or even build new barns to gain access to this alternative to petroleum-based fertilizer.

Calculating the Value

Kari Keller-Steele, JBS United's environmental director, based in Rushville, IN, has definitely seen an increase in demand for manure in recent years.

“Input costs for traditional grain farming have skyrocketed in the past five years, and that has forced people to look at things differently,” she says.

To help JBS United's customers put a value on liquid manure, Keller-Steele has designed a spreadsheet that calculates a value per 1,000 gallons, which then translates to a per-acre value. (Table 1.) Prices are based on what a farmer would pay for a commercial fertilizer with a comparable nutrient profile.

Keller-Steele says the spreadsheet helps barn owners and crop farmers reach an agreement that is beneficial to both.

She says an approach that works well is when the barn owner uses the spreadsheet to establish a value, and then offers the manure at a discount of one-third to one-half the total value.

Manure as a Cash Crop

Discounts for liquid manure vs. commercial fertilizer are usually expected, according to Keller-Steele, because nitrogen is highly volatile.

“Application of manure isn't as exact as a commercial fertilizer. Nitrogen in manure can't be guaranteed 100%,” she explains.

Timing of application, load-out from the pit and application method all have an impact on how much nitrogen remains intact and available.

Keller-Steele says more nitrogen is available to crops, especially corn, when manure is applied in the spring. And, whether manure has gone directly from the pit to the field impacts nitrogen levels, too. Injecting manure is also better than topical application.

“All of those factors increase the likelihood you'll realize the full value of the nitrogen,” she adds.

No Nitrogen Worries

Kent Buckert, a contract hog grower near Warsaw, IL, has taken the worry about available nitrogen out of his manure deals. He sells what's generated in his two 960-head facilities once a year, alternating between two different grain farmers with fields within a half mile of the barns. Buckert sets the price based on the value of phosphorus and potassium, and then gives the nitrogen away for free.

“I'm happy if my manure is gone,” he says, “And the farmers are happy to get the free nitrogen and a fertilizer with organic activity.”

To come up with values for phosphorus and potassium, Buckert collects two samples from each pit and sends them to two different labs for analysis. Then he uses a self-designed spreadsheet to calculate the pounds of phosphorus and potassium per 1,000 gallons and a value per acre for each nutrient.

Buckert last sold phosphorus for $49.06 per acre and potassium for $39.93 per acre. (See calculations on page 16.)

More than Dollars Ahead

Five years ago, northern Illinois farmer Kim Huntley wanted to diversify his operation beyond his 3,200 acres in corn and soybeans. He built two 2,000-head, wean-to-finish buildings — his first foray into confinement hog management. The two buildings pump out about one million gallons of manure annually. The manure is custom injected on 450 acres that Huntley farms nearby.

Originally, he considered the organic fertilizer from the buildings was nothing more than a perk for his farming enterprise. He was quite pleased and surprised to see an immediate, positive response in plant health and yield on the acres injected with manure.

“The plants just seemed to get off to a faster, healthier start and yield was better,” says Huntley. He tracked 10-12% better yields in a field where manure was applied compared to a nearby field that received commercial fertilizer.

Huntley no longer purchases potassium or phosphorus for land where manure is applied. He purchases no commercial nitrogen during the first application year, and buys only one-third to one-half the amount needed for the crop the next year, because organic nitrogen continues to break down and provide usable nitrogen.

Huntley takes special care to match application rates with plant needs. “You have to apply it at agronomic rates,” he emphasizes.

Last year he actually gave surplus manure to a neighbor because he didn't want to over-apply it to his land nearby, nor did he want to transport liquid manure over the road. He prefers to pump manure no more than three quarters of a mile.

Huntley is in the process of constructing a new 4,800-head confinement facility amidst land he farms four miles from his original site. Obtaining more manure was a major motivation for the expansion, which should provide fertilizer for about 600 acres of cropland, applying manure to 200 acres/year in a three-year rotation.

“At first I was looking at the manure as something extra, but in essence, the manure is just as viable of an enterprise as the hogs,” suggests Huntley.

Manure Management at Your Fingertips

Determining manure application rates, keeping track of stormwater conditions, or preparing for a regulatory inspection will be simplified with a new service from JBS United, Sheridan, IN and Hestia Software, Seattle, WA.

The new service, called Assured, offers complete manure management planning assistance, on-farm reporting and data recording through Dell hand-held technology, plus other resource management and environmental compliance applications.

The service, designed for swine, poultry and dairy producers, was initially introduced to Indiana and Illinois pork producers at the 2006 World Pork Expo. Plans are to expand to Iowa, Ohio, Michigan and other states shortly.

Kari Keller-Steele, JBS United's director of environmental services, says the trademarked program streamlines data collection and provides useful, on-the-go reports.

For example, Assured allows growers to instantly compare a barn's manure test results with soil tests and agronomic goals in a target field. It also provides an easy method of recording daily, weekly or monthly compliance tasks or agronomic events.

Information such as actual acres applied, whether water lines were checked on a specific day or the equipment used to inject the manure can be recorded on the hand-held device. This information is then transmitted (via a phone or computer data line) into Assured's database for that grower, stored and retrieved for management decision-making.

“Our goal is to bring growers a simple and accurate way to stay compliant with state and federal regulations,” says Keller-Steele.

The service costs $1,700 the first year, including the hand-held device, and $1,200 each year thereafter. For more information, contact 765-938-2125, extension 25 or e-mail: [email protected]. Click on the Web site: jbsunited.com/products.environment.
— Karen Bernick

Illinois contract hog grower Kent Buckert uses these calculations to set the price of manure he sells. He charges only for the phosphorus and potassium and gives the nitrogen away for free.