New Twists to Manure Agreements

The increase in the value of manure and the increase in pork producer input costs have led some to consider additional terms in manure agreements that reflect the changing economics. Examples include:

• Terms that require the crop producer to guarantee that the pork producer will have access to corn produced by the crop producer on the land that receives the manure. This clause could set the price for the corn or could simply state that the pork producer is guaranteed the right to purchase the corn at market price.

• A requirement that the crop producer pay for input costs that may rise as the fertilizer value of the manure rises. In addition to feed costs, LP gas for the hog unit, manure sampling, nutrient management plan preparation and soil testing are examples of additional expenses that the pork producer may want to require the crop producer to pay all or part of as compensation for the manure.

• Crop producers may want to include a requirement that the pork producer not implement any management practices or technology that would reduce the fertilizer value of the manure. This type of clause needs to be carefully considered by the pork producer, as it may limit what the producer can do to implement new odor control or other environmentally desired practices.

As with all other contractual agreements, when both parties fully understand the written agreement, then the contractual relationship is much more likely to benefit both parties without disputes later on.

And as in the case of all legal agreements, both parties should work with individual legal counsel to address their particular circumstances.

Considerations for Entering a Manure Agreement

A pork producer who is considering entering into a manure application agreement should consider the following factors:

• Procedures for removal and application of manure from the production facility in compliance with state and federal requirements for manure storage and application.

• Cost of removal and application of manure.

• Sale value of manure based on the crop nutrient value.

• Terms in a long-term manure agreement that allow for recouping as much of the value of the manure as possible over the length of the agreement.

• Potential nuisance and other legal liability from the application of manure.

Crop Considerations

A crop producer entering into a manure application agreement should consider:

• Soil nutrient levels and nutrient requirements of crops.

• Nutrient content of the manure to be applied. Some crop producers are concerned future technological advances in rations and manure treatment designed to reduce odor may lower the fertilizer value of the manure.

• Cost of organic nutrients compared with nutrients from commercial fertilizer.

• Potential soil compaction from application of manure.

• Potential for increased soil erosion due to possible reduction in crop residue from the manure application.

• Possibility of nuisance and other legal liability from application of manure.
  — Eldon McAfee