With profit margins on market hogs shrinking and commercial fertilizer prices bouncing around, Christensen Farms is capitalizing on the value of another commodity: manure.
“Who would have thought we could sell manure, and that it would be a hot commodity?” asks Dan Noreen, vice president of business development for Christensen Farms. Based in Sleepy Eye, MN, the company consists of 75,000 sows, with farrow-to-finish operations in Minnesota, Iowa and Nebraska.
Noreen estimates the company began recouping the manure pumping, hauling and application costs at their company-owned sites, including sow farms, nurseries and wean-to-finish barns, in 1997. Prior to that, Christensen Farms gave manure away.
“We found early on that there was very little experience with manure in the country, so we gave it away. We were paying for someone to take our manure and they got the benefit from it,” he explains. “As the margins got tighter, we just couldn't give away the valuable byproduct.”
Technological advances, including the use of geographic information systems (GIS) have helped to establish a value for the manure, he says.
“Technology has allowed us to compete with commercial fertilizer,” he says. “Now, with what we know about the [manure] nutrients, and with better application equipment, we can apply it more precisely.”
Once a barn site is identified for construction, Christensen Farms negotiates with local crop producers to use their cropland for manure application. Over the last 10 years, the agreements have changed. At first, the company paid for the hauling. Now, the crop farmer covers the cost of hauling and application of the manure.
For example, the agreement may allow the crop producer to buy the manure for a percentage of the value of its nitrogen, phosphorus and potassium. This price is based on his local commercial fertilizer price and the cost of application. The length of the agreement varies.
At many of the sites, the company is recovering between 50% and 60% of the nutrient value of manure. The ultimate goal is to recover 100% of the nutrient value. “We have to be able to create value for the byproduct,” Noreen says.
Christensen Farms employees three, on-staff agronomists to help crop producers understand the nutrient value in manure. “Education is the key to creating value,” Noreen adds.
Agronomist Dan Schmitz's responsibilities include managing the manure handling at company-owned sites. That includes assisting with permitting of facilities, developing manure management plans with cooperating crop farmers, working with farm managers to control the volume and quality of manure, insuring environmental compliance and identifying services related to manure management.
Schmitz's involvement with crop producers begins when a producer expresses interest in receiving manure from a Christensen Farms' site.
A manure management plan is developed for the farm based on soil fertility, expected manure nutrient production and the production goals of the crop producer. Using that information, a manure agreement is drawn up between the company and the crop producer.
This is all done before excavation on a new site begins, he assures.
Christensen Farms also identifies a local commercial applicator who has the right equipment for the job, whether it's a tank hauler or an umbilical hose system. Sometimes the hauler is a nearby producer who does custom work on the side.
Schmitz also does manure and soil sampling, recommends application rates and does spot checks on custom applicators who haul and apply the nutrients.
“Local custom haulers often know the neighbors, understand local conditions and how the farmer wants the nutrients applied,” Schmitz says.
The company works with 20 different commercial applicators; most work on multiple Christensen Farms sites.
After harvest and manure application, company agronomists review the records with the crop farmer.
“We report back with a farm visit and an invoice of manure costs, so they feel comfortable with what was done,” he says. “We build value into manure. It's not just the nutrients, but also expert advice.”
Christensen Farms agronomist Marsha Van Laere coordinates the company's GIS data, including field boundaries, soil fertility, environmentally sensitive areas, farming practices, crop information and manure nutrient analysis.
“Our goal is to have all fields where we apply manure mapped, and to use that information to help the producer,” Schmitz says. “The value of the manure is delivered with information.”
In order to show crop producers the value of using manure on their fields, Christensen Farms, in cooperation with Gary Malzer, University of Minnesota soil fertility specialist, set up a test plot on 16 acres next to the company feedmill, truck shop and offices.
In the fall of 1998, manure from a finishing barn was applied in replicated strips at five different levels, including:
Corn was grown on the test plot in 1999, soybeans in 2000. Then, to test the residual effects on yield and grain quality, corn was again grown in 2001 (no additional manure was added).
Manure application rates at crop yields are shown in Table 1.
| Rate, gal./acre | ||||||
|---|---|---|---|---|---|---|
| 0 | 2,000 | 4,000 | 6,000 | 8,000 | Fertilizer | |
| 1999, bu./acre | 99 | 168 | 182 | 193 | 187 | 168 |
| 2000,* bu./acre | 38.9 | 49.6 | 51.1 | 51.1 | 50 | NA |
| 2001,* bu./acre | 126 | 137 | 138 | 144 | 138 | NA |
| 1999 and 2001, corn; 2000, soybeans. | ||||||
| ˆUniversity fertilizer recommendation | ||||||
| *No manure applied, 2001 corn yields averaged over fertilizer treatments. | ||||||
| NA=Not measured | ||||||
Glen Christensen, a principal owner in Christensen Farms, manages the crop side of the family's farm operation. He has been using field plots to evaluate management practices including seed selection, planting rates and manure effects.
To maximize the yield potential of the farm, 22-in. rows are used. Data collected with a Global Positioning System (GPS)-guided yield monitor from farm and test plots over the past four years have confirmed yield increases of 9 to 13 bu./acre for corn and 3 to 6 bu./acre for soybeans, over land fertilized with commercial fertilizer.
“The reality is that the manure has value — public and private data proves that,” Christensen says. “What's reassuring to me is the interest from non-livestock producers in the manure's value. It grows every season.”
Higher fertilizer costs in the 2001 growing season pushed interest in manure to even higher levels.
“There are farm sites where I have to turn away people asking for manure; there just wasn't any more to be had,” Schmitz says.
The field days also get the producers, of both pigs and corn, to think about how their commodities are connected.
“We specialize in producing pigs, but not necessarily in growing crops,” adds Noreen. “We help to create synergy with our corn growers.”
Contract growers and crop farmers who sell corn to the feedmill are invited to field days that include educational seminars on topics of interest to both crop and livestock growers.
The company needs those corn growers. Christensen Farms buys the 12 million bu. of corn it processes each year at the Sleepy Eye feedmill. The mill serves all of the Minnesota farms, and most of the company and contract farms in Iowa. The Nebraska farms, purchased recently from National Farms, are served by another mill in that state.
Ultimately, Schmitz has two goals: to help Christensen Farms realize the full value of manure by delivering its nutrient value to crop producers, and help crop producers manage their corn and soybean crops in the most environmentally friendly way.
“As we build value in the manure, we are helping producers optimize the return from the manure and ensuring environmental stewardship. Ultimately, that will ensure our ability to do business in that neighborhood in the future,” Schmitz concludes.