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Manure Management for Water Quality: Cost to Animal
Feeding Operations of Applying Manure Nutrients to Land
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), 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 manure.
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 plans.
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 water quality.
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.
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