When both fuel and fertilizer prices started moving upward, many crop and livestock producers became more interested in manure bartering. Kevin Erb, an economist with the University of Wisconsin Extension Environmental Resources Center, says manure bartering helps more evenly distribute manure nutrients to fields with lower fertility that might be located farther from a livestock facility. “Higher fertilizer prices make bartering more feasible,” he relates. The trend toward livestock producers networking with crop producers to barter manure has led states like Michigan and Illinois to create an online list of manure producers seeking to provide manure, as well as cash grain farmers who are looking for the crop nutrients manure has to offer. Illinois co-ops are also serving as brokers for manure exchange.
Erb says Wisconsin producers tend to exchange manure for cash, feed, or services, or may do a “Dutch treat” type of bartering. The Dutch treat system may be used when one or both farmers have land closer to another farm’s manure source. Erb says this situation commonly occurs when both producers have owned or rented land across a busy road or next to the neighbor’s barn. Each producer may agree to haul a set amount of manure to the other’s property, which is actually located closer, thus saving time and wear and tear on equipment. Both producers are able to benefit from manure’s nutrients.
Erb cited an example where two farmers were able to save two miles each way by using the Dutch treat bartering system. They were applying three loads per acre on a 20-acre field, thus saving 240 total miles and 10 hours of labor for each farmer. “The corn field was planted one day earlier as a result,” he adds.
A manure-for-feed barter system occurs when a cash grain producer agrees to accept a certain amount of manure from the livestock producer as part of a contract to produce feed. The rates, time of application and field selection are all spelled out in the contract.
With manure-for-cash barters, the livestock producer provides the manure for a set price per ton or per thousand gallons. The price is usually determined by the nitrogen content of the manure, and is more common with poultry and swine farms than with dairies.
Erb says the manure-for-services trade involves the manure recipient providing a set amount of services, such as hoof trimming, feed hauling, or tillage, in exchange for the manure. “One benefit of this type of exchange is that, if the dairyman can contract with a dependable neighbor with the right equipment, the dairy can avoid investing in that tool,” Erb explains. Any manure exchange or barter can have income tax implications, and should be double-checked with an accountant or tax attorney.
A written contract is essential with any type of manure exchange. Erb encourages producers to have the contract reviewed by both farms’ attorneys. Key factors pertaining to environmental responsibility, manure sampling, application guidelines, recordkeeping responsibility, tax implications and contingency plans if it is too wet to apply, are among the details that should be included in the contract. Because of potential income tax implications, contract language should be approved by an accountant or attorney.
Erb suggests successful manure exchanges usually start by involving both farms’ nutrient management plan writer or crop consultants. “Their knowledge of manure rates, soil conditions and other factors will make them a key player in any successful agreement,” he concludes.