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Extension > Agriculture > Dairy Extension > Manure > What's manure worth?

What's manure worth?

William F. Lazarus, Extension Economist; Jose A. Hernandez, Extension Educator; and Les Everett, Education Coordinator, University of Minnesota Extension
March 10, 2012

A new web-based tool developed by Dr. William F. Lazarus, Extension Economist and Professor in the Department of Applied Economics, is now available. The web-based calculator http://z.umn.edu/manurevalue may be used to compare the economic value of manure from alternative manure application rates and methods. The value is based on crop nutrient needs for a specific field and crop rotation, fertilizer prices, manure hauling costs, manure type, and application method. In addition to assisting with management of current livestock and crop operations, the calculator can be useful in budgeting new facilities or evaluation of contract production through estimating the effect of manure and manure management on cash flow. The calculations can also assist crop and livestock producers in estimating the value of manure that may be transferred or sold from one entity to another.

Livestock producers face uncertain markets and narrow margins. This situation motivates growers to optimize production methods, utilizing all resources including manure. In addition, increases in the price of commercial fertilizer experienced since 2009, has heightened interest in the use of livestock manure for supplying crop nutrients and has significantly increased the value of manure as a nutrient source.

Manure, when managed properly, can be an important asset to crop and livestock operations. However, if manure is mismanaged, it can become an environmental liability. In recent years, more farmers have been considering the contribution of manure value to cash flow in livestock operation budgets, and seeking an appropriate market value in exchange situations between livestock producers and crop producers. More crop producers also appear to be seeking manure as a major nutrient source, either by purchasing from a livestock producer or by adding livestock to their operations.

Determining the economic value of the nutrients in livestock manure can be tricky. Nutrients in commercial fertilizer are acquired by paying for the nutrients and a small application charge. With manure you, in effect, "acquire" nutrients by paying for the cost of application—even if you already have ownership of the manure in a storage structure.

Additionally, commercial fertilizer supplies the amount and ratio of nutrients you need or ordered. With manure, you get the amount and ratio of nutrients that it contains, which complicates the determination of a value. Even when a rate that supplies the correct amount of nitrogen is applied, the amount of phosphorous and potash applied may not match what you would have purchased commercially, and amounts applied above crop need probably have no value. In the past, manure application costs often exceeded the value of the nutrients applied. Now, in many situations, the nutrient value in the manure exceeds the cost of application.

A formula that estimates manure value can be described by: Net Economic Impact of Manure = Value of Year 1 Fertilizer & Application Costs Replaced + Residual Value (Mostly Year 2 if any) +/- Non-NPK Yield Response - Manure Application Costs.

Manure value can be calculated on a per acre applied basis, per unit of weight or volume, per storage unit, or per operation. The value will vary widely, influenced by factors such as the amount of N, P and K required per acre by the crop, manure nutrient concentration in the manure, application rate and potential yield response attributed to manure beyond N-P-K application, and application cost per ton or gallon. The same manure in terms of nutrient concentration can have widely differing value depending on crop need and accuracy of application.

A Basic Example

A dairy farmer with a 100-cow operation produces about 1,000,000 gallons per year of liquid manure with the following nutrient content: 28 lb N, 12 lb P, and 22 lb K per 1,000 gal. The farmer has 150 acres available for fall manure application. The intended crop is Corn, in a Corn-Corn-Soybean rotation. The crop nutrient needs are: 140-40-40. The estimated manure application rate for that manure assuming broadcast application with incorporation within 12 hours of application is 9,100 gallons per acre. The farmer, however, was not able to incorporate the manure in all the fields. He incorporated 50 acres within 12 hours of application, 50 acres 24 hours after application, and 50 acres that he was not able to incorporate at all. The chart below shows the net return of the manure calculated using the "Value of Manure" worksheet.


Incorporation

<12 hr

12-96 hr

Without

Crop Need

140-40-40

140-40-41

140-40-42

Manure Test

28-12-22

28-12-22

28-12-22

App. Rate, gal/acre

9100

9100

9100

App. Cost/Gal., $

 $     0.0125

 $     0.0125

 $     0.0125

Yield Impact, $/acre

 $       20.00

 $       20.00

 $       20.00

Avail. N Applied, lb/acre

140

102

51

Avail. P Applied, lb/acre

87

87

87

Acres Covered

110

110

110

Net Return

$ 5,192

$1,636

-$2,003

Spreadsheet Steps

  1. Determine the Value of Nutrients Needed for First Year Crop Production
  2. Calculate the Value of Required Nutrients That Are Applied With Manure (for First Year Crop Production)
  3. Calculate the Value of Applied Nutrients That Will Replace Second Year
  4. Adjust For Yield or Other Factors
  5. Subtract Application Costs
  6. Calculate Total Net Value of Manure Application Per Acre, Per 1000 Gallons, Per Animal, or for Facility or Operation

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