CONTACT:
Rick Jones, Engineered Storage Products Company, Inc., rljones@engstorage.com , 815-756-1551; or,
Jon Anderson, OPEN ROADS, janderson@openroads-bgdn.com, 414-227-1000 ext. 4.
Determine and Maximize Manure Value
DES MOINES, Iowa (June 7, 2007) – Don’t call it waste… The increasing cost of commercial fertilizer has created a heightened demand for hog manure, a product once considered to be “waste”. Now more than ever, producers are encouraged to maximize its value.
New methodology involved in making a dollar value determination of manure value was presented by Bob Koehler, University of Minnesota, Extension educator, during the Environmental Information Center session at World Pork Expo. Sponsored by Engineered Storage Products Company, manufacturers of Slurrystore® systems, Koehler introduced management strategies to maximize manure value and provided a formula for determining its economic value.
“Research shows manure can improve crop yields. I’ve seen university trials that show a 7- to 10-bushel per acre increase in corn from hog manure versus commercial fertilizer. There is definitely a growing market for manure as a commercial fertilizer replacement,” said Koehler. “More producers are seeking an appropriate market value in sales to crop producers and considering the contribution of manure value to cash flow in livestock operation budgets.”
Koehler helps area farmers determine manure prices. The key to determining manure value, according to Koehler, is to adhere to sound economic principles. He follows a four-step pricing formula:
Net economic impact of manure (usually on a per acre basis) = the value of Year 1 fertilizer and application costs + residual value (mostly Year 2, if any) + or – yield response or other benefits or costs – manure application costs.
“Usually working on a per acre basis, we first determine the fertilizer costs that the manure will replace,” said Koehler. “We look at nitrogen (N), phosphorus (P) and potassium (K), and in some cases micro nutrients, and then also any application costs associated with applying these nutrients in a commercial fertilizer form. Next, if a farmer would have purchased more fertilizer in Year 2 that is replaced by the manure application, we value potential residual credits for the next year.”
The third step is to look at potential yield response due to manure. Koehler told the audience that farmers need to determine if yield impacts beyond what can be attributed to N, P and K should be expected. He also mentioned other factors such as tillage or weed control costs. “We add the value of any increases in yield. Then we determine if the farmer might save money from a reduction in tillage costs because the manure application equipment provided it. Also, did the farmer incur greater weed control costs? There are many, many variables, but fertilizer replacement and yield response are usually the major contributors to value.”
The last part of the formula is determining manure application costs. Does the farm own the equipment or do they need to hire a commercial applicator? In either case, ownership costs, fuel, labor, repairs, etc., and logistics such as distance to the fields, access and topography can effect application costs. “The application rate is usually higher per unit at lower rates but often lower rates increase efficiency of nutrient use, resulting in a net economic gain. Over-application has a large negative impact on net value because it drives up application costs per acre to apply nutrients that are not needed,” added Koehler.
“The net value can be expressed in a number of ways,” said Koehler. “We use a ‘Manurwkst’ spreadsheet to calculate the economic impact on a per acre basis. Dividing the total gallons (or tons) of manure available by the per-acre application rate gives us the total acres applied. Then, we take the acres applied times the net impact per acres, resulting in the net impact for the manure producing unit or facility under study. After the impact of the facility or operation is calculated, further analysis can be done by other appropriate units, such as animals produced or animal spaces.”
How to Maximize Manure Value
As part of his presentation, Koehler also provided strategies for maximizing manure value. He told seminar attendees to apply manure to nitrogen-requiring fields and to crops and fields that need more potassium and phosphorus. He suggested incorporating manure at application time to reduce nitrogen volatilization losses and to check manure nutrient concentration, avoiding dilution if possible. In addition, he recommends developing a multi-year set of manure tests for each hog barn to better estimate nutrient levels in manure.
To help reduce manure application costs, Koehler said to avoid over-application. Also, use equipment that has a range of application levels and that can be calibrated to achieve application accuracy.
Seminar sponsor Slurrystore® from Engineered Storage Products Company is located in Dekalb, Illinois. They are the leading manufacturer of glass-fused-to-steel structures in North America, including the well-known Harvestore® and Slurrystore® brands. For more information, please call 815-756-1551.
