Low commodity prices abound. What can livestock producers and crop farmers do collectively to improve their bottom line?
Offsetting crop fertilizer costs with livestock manure can be a win-win situation for both sides, says Stan Buman, co-owner of Agren Inc. The small Carroll, IA, firm works to bring the two groups together, locating neighbors as close together as possible to keep down costs and speed the application process.
"We are really trying to help out the livestock producer," says Buman, "especially those who have too much manure for their own operation. Or, it may be a case where they've been applying manure for many years and their fertility levels are getting very high and it would probably be beneficial for them not to apply manure to their farms."
Manure Brokering The service Buman's company provides is called manure brokering. Goals are to break farmers' views of livestock manure as a waste product and educate them on proper manure management.
"We are not buying manure. We are not selling manure. We are just trying to get the neighbors (crop farmers) to take the livestock producer's manure and pay for the hauling costs," explains Buman. The crop farmer gains from receiving nutrient inputs at a lower cost, the livestock producer benefits by not having to pay for application of manure on the neighbor's fields and the environment gains from responsible application of manure nutrients, he notes.
In Carroll County, IA, alone, a heavily populated livestock area, annual manure production is estimated to be worth a minimum of $5.3 million, yet 75-80% of this manure is mismanaged, according to Buman.
Agren, which exists to keep agriculture and the environment operating in harmony, believes there is a growing need for proper manure management, fueled by increased livestock production and environmental concerns. For pork producers, the issue often stems simply from expanding pig production without a corresponding addition to cropland, he says.
The Price Of Manure One way to rectify this is to share manure with a neighbor - at a price favorable to both sides. Crop farmers typically pay $60/acre for commercial fertilizer in a corn-soybean rotation, explains Buman. You can expect to pay at least $40/acre to a custom hauler for manure agitation, pumping and application. Based on that price, the crop farmer would save $20/acre ($60 minus $40) on manure application costs every second year. The levels of phosphorus and potassium in the manure are higher than the amounts needed by the crop. These nutrients are stable in the soil and will build fertility levels for future use, he adds.
The livestock producer won't make any money, but if the crop farmer agrees to pay a $40/acre charge for custom hauling, the livestock producer saves that cost, notes Buman. Sometimes the cost is split between the two parties.
Often, well-manured fields don't need a full complement of manure. These fields are often high in levels of phosphorus and potassium. "The livestock producer might be further ahead if a neighbor is willing to pay for manure to just go in and buy commercial nitrogen, something fields need each year," says Buman. At a cost of about $20 for 125 lb. of nitrogen/acre, he/she still could be money ahead.
Test Before Applying Before application, it is most important to have your manure broker do soil fertility and manure tests for application compatibility and maximum value, points out Maggie Jones, Blue Earth Agronomics, Lake Crystal, MN.
It's also very important to have the manure analyzed. In the case of liquid hog manure, samples are collected as the pit is pumped. Test results from the previous year are usually used for this year's analysis, he says. Jones, a crop consultant, stresses the importance of carefully testing soil types for the amounts of manure they can handle and basing application on crop nutrient needs. Records must also be carefully maintained to track crop performance.
Manure Agreement Is a contract really necessary in manure brokering? "I think I could sell any farmer on the idea of getting free manure," observes Michael Schmitt, extension soils scientist, University of Minnesota. "But generally what gets omitted are the negatives of getting free manure for your farm." For instance, when they are going to spread manure it could be raining and the farmer could end up with a big mess, compaction or clods. The problem with getting something "free" is that it is often treated that way. And that has been the case with manure, emphasizes Buman.
"If they put the manure on right, they could probably avoid almost all commercial fertilizer," states Buman.
As testament to the value of manure, Schmitt has summarized several projects over the past 10 years and concluded that manure provides a 7% yield advantage compared to unlimited fertilizer application. But the benefits go beyond the nutrient content of manure, including improving water-holding capacity and microbial activity.
Even though a manure contract should be a win-win situation for both livestock and crop farmers, Schmitt cautions each case must be evaluated individually. "Long-term agreements do provide some benefits agronomically, in that the benefits of manure often are cumulative, meaning the impact on soil structure and infiltration aren't going to happen overnight."
Some states are requiring an easement to be part of your manure management plan, says Kimberly Hanson, Midwest Environmental Management, Ackley, IA. "Basically, the easement is a signed document that is notarized, provides details on whether there is going to be any cost involved for either side, timing of applications, how the manure is going to be applied and any liabilities."
It used to be producers in Iowa would not sign manure contracts because they didn't want to be tied to anything. Low commodity prices have sure changed that mentality, Hanson says.
The Minnesota Association of Farm Managers has developed a manure contract form. For more information, contact Ward Nefstead, Department of Applied Economics, University of Minnesota, (612) 625-7228. See related manure application story on page 23.
Management consultant Leonard Meador, Rossville, IN, says there are a multitude of reasons why a crop farmer or even a pork producer might want to consider hiring a custom manure applicator.
The two biggest reasons would be timeliness and equipment. Producers don't often have the money to buy the best application equipment. Whereas, custom applicators can afford to spend the money and then spread that cost out over a number of acres, says Meador, affiliated with Animal Environment Specialists Inc. Using several large rigs at once, custom applicators are able to make short work of your application needs.
A third reason might be the use of precision application methods. The applicator develops a grid of exactly where and how much manure to apply per acre. "There are a few producers starting to use global positioning to record where manure is put in a field," says Meador.
There are also special circumstances which might call for use of a custom applicator, suggests Meador. One reason is if your equipment is primarily geared to surface application, and there is an area of land that is socially sensitive, you might consider using a custom applicator to inject manure.
A second reason might be for manure removal from lagoons or from large storage containments when they become overrun with solids. A custom applicator has the equipment and expertise to agitate and clean out those solids. This could be part of a yearly lagoon checkup, he offers.
Ben Puck, a commercial manure applicator for 20 years, is encouraged that agriculture is finally seeing that livestock manure contains a lot of valuable crop nutrients.
He says the strength of his Manning, IA, business is the ability to spread consistently and uniformly at low manure rates requested by crop farmers, 3,000-5,000 gal./acre. "We are basically set up for high-value, low-volume manure application," he explains.
For those interested in using a custom applicator, Meador advises formulating a contract based on your manure production budget. That should take into account how much manure you are producing and fields available.
Then negotiate a price-per-gallon charge with a hauler. Take into account the type of equipment he uses and what your goals are for your crops. "Make sure there is no misunderstanding how it is going to be applied, where it is going to be applied or when it is going to be applied," says Meador.
Price ranges for a per-gallon charge are anywhere from 0.6 cents to 1 cents. Expect to pay additional transportation charges for hauling manure, he explains.
Puck says some applicators charge more for injection than surface application, set separate charges for agitation, pumping out and application.
Puck, who serves several western Iowa counties, expects to apply 70 million gallons of liquid hog manure this year. His biggest beef: customers who think that cheapest is always best when it comes to custom haulers.
In his case, he broadcasts manure using 2,250-gal. trucks, disking manure into the soil.
If there are concerns and questions about hiring a custom hauler, Meador advises asking for a client history. You might also want to check with your local natural resources officials to make sure there have been no application violations.
And don't be afraid to ask the hauler what he/she offers that's better than the other custom applicators in the area, he stresses.