Manure Management for Water Quality: Costs to Animal Feeding Operations of Applying Manure Nutrients to Land
by Marc Ribaudo
, Noel Gollehon, Marcel Aillery
, Jonathan Kaplan, Robert Johansson, Jean Agapoff, Lee Christensen, Vince Breneman
, and Mark Peters
Agricultural Economic Report No. (AER-824) 97 pp, June 2003
U.S. farmers are world leaders in the production of animal
products. But in supplying households with hamburgers, pork chops,
and ice cream, livestock and poultry farms also generate more than
350 million tons of manure that must be disposed of every year.
When used as a fertilizer, livestock and poultry manure can provide
valuable organic material and nutrients for crop and pasture
growth. However, those same nutrients-nitrogen and phosphorus-can
degrade water quality if they are overapplied to land and enter
water resources through runoff or leaching. A shift in the
livestock and poultry industry over the past several decades toward
fewer, larger operations and toward regional concentration has
prompted public concern over the use and disposal of animal
What Is the Issue?
Animal feeding operations identified as CAFOs (concentrated
animal feeding operations, generally the largest) under the Clean
Water Act are considered a point source of water pollution. As
such, they are required to obtain a permit and show that they are
not discharging waste into surface waters. In 2003, EPA further
required that each CAFO develop and implement a nutrient management
plan. Manure spread on land (the primary disposal method) must not
be applied at greater than agronomic rates, or rates that
oversupply nutrients to crops or other vegetation. In addition to
these new requirements for CAFOs, USDA's stated goal is that all
animal feeding operations develop and implement technically sound,
economically feasible, and site-specific nutrient management
Farmers are concerned that meeting a plan's requirements
increases the costs of managing manure - developing a nutrient
management plan, recordkeeping, testing the nutrient content of
manure and of soil receiving manure, and possibly transporting and
applying manure to more land. In this report, we examine how much
costs increase and how net returns and prices adjust as a result.
If animal operations are overapplying manure nutrients, the cost of
moving manure to additional land can become a major expense. The
availability of nearby land off the farm for spreading manure
becomes a major concern for animal operations without enough land
of their own.
How Was the Study Conducted?
We use survey data for hogs and dairy to estimate the
short-term, farm-level implications of applying
manure to land according to a nutrient management plan across U.S.
regions. This analysis best captures the interactions between a
farm's resource base and manure disposal decisions, including how
much land livestock farms would require beyond what they currently
control, as well as the cost of hauling manure to this land. Both
nitrogen and phosphorus-based nutrient standards are assessed.
In some areas of the country, animal operations have become
concentrated and land availability for spreading manure is
insufficient. A regional model for minimizing
manure transportation and spreading costs is developed and used to
examine how the competition for land on which to spread manure
influences the costs of spreading manure.
The impacts of a national policy are felt across regions, and
these impacts can be transferred across the
economy through the market system. We assess the broader
impacts of improved manure management on the welfare of U.S.
producers and consumers with a model of the U.S. agricultural
sector. We estimate the impacts of meeting nutrient application
plans on agricultural prices, crop and animal production, and the
geographic distribution of production.
What Did the Study Find?
Meeting nutrient application standards will require CAFOs to
spread their manure over a much larger land base than they are
currently using, and most will need to move their manure off the
farm. For example, only 18 percent of large hog farms and 23
percent of large dairies are currently applying manure on enough
cropland to meet a nitrogen nutrient plan. Even if large hog farms
spread manure over their entire land base, only 20-50 percent
operate enough land to meet land application standards, depending
on whether a nitrogen- or phosphorus-based plan is to be met.
Similar results would be expected for beef and poultry.
Total livestock/poultry farms' annual net income could decline
by more than $1 billion (around 3 percent), but the precise outcome
depends greatly on the extent to which cropland operators are
willing to substitute manure for commercial fertilizers, and the
degree to which revenue from sales of higher priced animal products
mitigates increases in production costs.
Competition for land on which to spread manure could be severe
in regions with high concentrations of animals. Animal feeding
operations in 2 to 5 percent of U.S. counties produce more manure
nutrients than can be absorbed by total cropland and pasture in
each county. Those counties are primarily in North Carolina, States
surrounding the Chesapeake Bay (Virginia, Maryland, and Delaware),
Southeastern States (such as Georgia, Alabama, and Arkansas), and
in California. Operations in those regions would have to compete
for land if all manure is to be spread at agronomic rates. This
could extend travel and raise costs.
Crop producers' willingness to accept manure is a very important
determinant of manure spreading costs. In all analyses, costs
decrease when more crop operators are willing to use manure. A
number of factors impede greater use of manure, including uncertain
nutrient content, soil compaction associated with heavy manure
application machinery, and odor. Research on how these impediments
might be overcome, education assistance on the benefits of using
manure, and financial assistance for crop farmers using more manure
could reduce farmers' manure management costs and secure better
The costs of complying with manure management requirements could
instigate structural and geographical shifts in the livestock and
poultry sectors. Our analysis indicates that the highest per-unit
costs for meeting a nutrient-based manure management plan are often
borne by the largest operations. Sectors such as swine and poultry
have seen a significant move toward integration, the use of
production contracts, and larger farms, primarily because of the
efficiencies these structural changes bring. The impacts of manure
management costs on the potential benefits from this structure
could influence whether such trends continue, whether smaller
operations (non-CAFOs) not affected by current regulations become
more competitive, and the degree to which location will be
considered in expansion decisions.