This growing interest in the nutrient value of hog manure prompted researchers at the Drake University Agricultural Law Center to conduct an on line survey to learn whether contractual agreements are being drafted to protect both parties.

Results of a 2007-2008 study showed only 23 of the 61 pork producers completing the survey had a contractual manure agreement — about half were written, half were verbal. Only a couple put a dollar value on the manure.

Survey participants represented more than 30,000 sows and 1.17 million finishing hogs, from all regions in the state.

“Our goal was to identify types of decisions hog farmers are going to make in the next 12 months and provide them with legal tools to help make those decisions,” explains Neil Hamilton, professor of law and director of Drake's Agricultural Law Center.

A significant trend in the survey reports: “Hog manure has gone from being treated as a cost to being seen as a significant component of many operations' cash flows. As the price of corn and the cost of production rise, primarily the cost of commercial nutrients, the value of hog manure rises as well.”

That interest has resulted in a growing number of crop farmers becoming interested in either raising hogs or entering into agreements that would gain them access to hog manure.

In response, Drake's Agricultural Law Center developed a 43-page Manure Agreement Decision Making Tool, www.law.drake.edu/centers/agLaw/docs/manureAgreements.pdf.

The document presents the characteristics of a legally binding agreement. Simply stated, “A manure agreement is between at least two parties where one party has manure and the other party has land for application. The party with the manure may be an individual, family corporation, or other legal entity that owns an Animal Feeding Operation (AFO).”

Two types of agreements include:

• A “manure contract” is the sale of manure through a legally binding document, and

• A “manure easement” allows someone to apply manure to the land of another, and it may include provisions for paying for that use.

Negotiable Items

Easements can be combined with contracts to provide flexibility concerning land access while negotiating contract renewal.

Authors of the tool reinforce that legally binding agreements are always negotiable, and they caution that the unwillingness of one party to negotiate may be a forerunner of future problems. Furthermore, all agreements should be incorporated into a written document because oral modifications and verbal agreements are difficult to enforce.

Elements of a thorough contract are compensation for manure; guarantees of application, manure type and quality; application method and compensation, if applicable; and duration of the contract. The adjoining sidebar offers some additional questions to consider when developing a manure contract.

Contracts should specify the minimum and maximum amounts of manure to be applied or indicate if no minimum is guaranteed. It should also state whether the producer is under any obligation to continually provide manure during the term of the contract, and easements should allow for enough acres to ensure the producer is able to apply manure under all circumstances.

Suppliers of manure may want to include a contract clause that states there is no warranty in regard to the quality of manure or the resultant crop yields. On the other hand, crop producers may want to specify some nutrient standards, especially if they are relying on the manure as part of their soil fertility plan.

Some more abstract elements of a contract may address industry changes affecting a landowners' desire to apply manure to their property and a hog producer's need for land to apply manure. Details of the agreement should protect both parties.

Attitudes Change

Parties involved in an agreement should negotiate all foreseeable issues before the document is signed.

On a cautionary note, Drake University officials note the manure agreement decision-making tool is not intended to provide legal advice, so individuals should consult an attorney licensed to practice law in their state before entering into any written contract related to manure.

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