Winter 2006

Value of Manure Nutrients

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By Kelvin Leibold and Tom Olsen, Farm Management Specialists, Iowa State University Extension

The change in the size of livestock operations and increasing fertilizer prices have resulted in increased interest in valuing manure and using it as a crop nutrient.  Manure, especially deep pit liquid swine manure, is widely accepted as a viable source of organic nutrients. Its use as a fertilizer replacement has increased the interest in putting a value on the use of manure.  In part, this interest has supported the growth of the livestock industry in recent years.

Component Pricing

The most common method of valuing fertilizer is component pricing. The manure is sampled and tested to determine the nutrient content. Then this analysis is used to determine the value based on commercial fertilizer prices. A typical swine finishing manure might test 50-35-25 pounds of nitrogen (N), phosphorus (as P2O5), and potassium  (as K20) per 1,000 gallons. 

If the manure was injected with minimal losses and the nitrogen was readily available a 3,000 gallon rate would provide 140 units of nitrogen per acre. If nitrogen was valued at $0.28 a pound there would be $39 of N value.  In addition, 105 pounds of P2O5, valued at $0.26 per pound, would equal $27 per acre. You would also receive 75 pounds of K20 valued at $0.22 per pound would bring the total to about $83 per acre. In addition, the manure would contain other micronutrients  and the solids in manure could contribute to increasing soil organic matter.  This method may not take into account nitrogen losses and crop use.  If the soil where the manure is applied has very high phosphorus or potassium levels, the application of additional fertilizer may not provide any additional yield increases.

Bulk Commodity

Another method used to price manure is to price it as a bulk commodity where you have sellers and buyers.  If you are in an area that has an abundance of supply and limited demand it will drive the price down.  If demand outstrips supply the price will increase until it balances out with the demand. The nutrients would have a different value depending on the location and local situation. Transportation and distribution costs become a factor in negotiating a price.  If there is an over abundance of manure in one area and the livestock producers are faced with high transportation costs to move it out of the area, they may be willing to reduce the price if they can avoid significant transportation costs.

Transportation Costs

Transportation costs can be broken down into to general categories. The first is commercial or custom hauling.  Iowa has developed a very significant and important industry around commercial hauling for both liquid and dry manure. Commercial haulers usually base their rates on a per gallon basis, with a variety of premiums and discounts.  Premiums are based on distance, rates and set up fees to name a few.

If you use $.01 per gallon as a base rate a producer might spend $30 per acre to get manure applied. Even if there was a surcharge of $.001 per mile for going each extra mile it would only add $3 or $6 to the cost of going an extra mile or two. Comparing that cost with the $83 of potential value in the manure explains why some grain farmers are interested in constructing new swine finishing facilities.

Some producers may decide to haul their own manure. This could be a crop producer who wants to haul someone else’s manure to his own farm or it could be a livestock producer. If the farmer already has a tractor that is adequate for pulling an applicator there are additional opportunities for savings.  If producers are interested in calculating their own costs they can download a spreadsheet (http://www.extension.iastate.edu/agdm/crops/xls/a3-29machcostcalc.xls) that will help them calculate the fixed and variable costs of operating machinery.  As the spreadsheet demonstrates, a person who uses a tractor that they already are using in their crop operation can lower the fixed costs and overall costs of hauling manure.

Limitations

Some of the concerns with using manure are compaction from application, uniformity of the product, uniformity of application, fixed analysis, impact on planting date, increased weed pressure or increased disease pressure. The “net present value” of applying phosphorus and potassium on very high testing soils may not equal the cost of the freight. Manure is not always a uniform product. Even from year to year we are seeing differences in manure nutrient analyses because of changing swine diets that include phytase, dried distillers grains and synthetic amino acids. These rations tend to have lower nutrient analysis making them less value on a per 1,000 gallon basis. This is also increasing the cost of application per unit of fertilizer. This highlights the importance of having and using a good manure analysis program.

Valuing Manure

Liquid ManureAs a general rule we don’t sell liquid swine manure in Iowa.  More frequently we are trying to negotiate for the reimbursement of the cost of hauling. When dealing with liquid swine manure most of the hog operators are receiving between $0 and $20 per acre to offset the cost of hauling. A few are having to pay someone to take the manure while others are receiving over $20 per acre, either as cash or by covering the hauling charges.  This may change as fertilizer costs increase. There are some spreadsheets available to help calculate the value of manure as a fertilizer. One of the products is the ISU Pork Calculator.  The order form is available at http://www.ipic.iastate.edu/information/MNVorderform.pdf. The spreadsheet compares the value of commercial fertilizers with manure.  It also estimates the acres needed.  It includes the Iowa P-Index formulas and summary reports. There also is an ISU Extension spreadsheet that can be downloaded at http://www.extension.iastate.edu/agdm/livestock/xls/b1-65manurecalculator.xls. Another manure calculator spreadsheet is available to download from the University of Minnesota at: http://swroc.coafes.umn.edu/Bob/koehler_main_page.html.

Conclusion

Manure has a lot of valuable nutrients. It can be very cost effective to haul where needed.  A producer needs to know the quantity of manure available, the nutrient analysis of the manure, the crop needs, the current soil test results and the handling and application costs. The use of manure may result in increased or decreased yields when compared to traditional fertilizers depending on any one of a number of reasons. Crop producers need to predict how well they can manage manure as a fertilizer sources and what the overall impact will be over a number of years. If they can, they will be better able to determine the value of the manure in their farming operations.

 

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