Transport Issues in Using Litter as a Nutrient Source
Farm Business Management Update, August 2000
By Jim Pease
The Poultry Waste Management Program initiated by House Bill 1207 in 1999 required that a poultry waste transportation study be conducted. A study was conducted by Beth Ann Pelletier, Dr. David Kenyon, and Dr. Jim Pease to examine the economic feasibility of litter transport, and the potential for a cost-share program to encourage shipment from litter-rich regions. The technical report associated with this study containing the data reported above can be found at http://www.vaes.vt.edu/research/publications/index.html in August 2000 (B. A. Pelletier, J. W. Pease, and D. Kenyon. Economic Analysis of Virginia Poultry Litter Transportation, Virginia Agricultural Experiment Station Bulletin).
Based on Census of Agriculture data from 1997 and standard litter nutrient analysis, total litter production in Virginia is approximately 323,000 tons of broiler litter and 234,000 tons of turkey litter. (Table 1 reports Virginia poultry litter production by region.) Although this tonnage seems like a lot of litter, at least 3.7 million acres in Virginia could benefit from litter nutrients and other qualities. Even applied on a phosphate basis, nearly 1.8 million tons would be required to fertilize Virginia crop/hay/pasture acres. Yet, litter is not nearly so widely used as a nutrient source in Virginia. Clearly, transportation costs and other concerns of potential users are extremely important in determining adoption.
|Table 1. Virginia Poultry Litter Nutrient Production by Region, 19971|
|Source: 1997 Census of Agriculture, Virginia Tech Manure Testing Laboratory|
1 Estimates are conservative due to census reporting disclosure requirements.
How the Study Was Conducted
Crop/hay/pasture nutrient needs by county were estimated using soil productivity groups and Virginia Soil Testing Laboratory results. Nitrogen needs were based on crop and soil productivity group. Phosphate needs were based on soil test results and the greater of crop agronomic recommendation or crop nutrient uptake. Commercial nutrient budgets were taken from Virginia Cooperative Extension enterprise budgets. Litter removal, assembly, storage, testing, loading, application, and brokerage costs were updated from an earlier study. Costs for subsidizing transport of litter to counties outside the Shenandoah Valley according to crop, hay, and pasture nutrient needs were estimated. To examine potential user concerns about litter as a nutrient source, four focus groups were organized and user perspectives of advantages and disadvantages were documented.
The major concerns expressed by members of the focus groups were
To estimate breakeven fertilization costs between commercial fertilizer and litter applications, the cost savings from fertilization with litter were divided by an estimated transport cost of $0.11/ton/mile. Average cost savings from fertilization of corn with litter were $12.20 per acre (less transport costs), indicating a breakeven transport distance of 111 miles from Harrisonburg. Breakeven distances for other crops, hay, and pasture ranged from 65 miles to 246 miles. Assuming that litter was applied on a phosphorus basis to 50 percent of corn, wheat, and barley acres, and 10 percent of hay and pasture acres within the breakeven radius, 206,000 tons would be required, and a potential fertilization savings of $1.36 million would be generated. To stimulate adoption of litter by new users, a litter transport subsidy program was outlined and evaluated with the following assumptions:
Table 2 indicates litter production and crop/hay/pasture potential use by region, assuming 100 percent adoption. The analysis was conducted only for the Shenandoah Valley region, since surpluses are of most concern in that region. Table 3 indicates potential litter transport and associated cost subsidy. The Shenandoah Valley has a litter surplus on a phosphorus basis of 267 thousand tons. Relying only on land application for waste disposal and assuming that all litter is applied on a phosphorus basis, litter would need to be shipped somewhat more than 150 miles from Harrisonburg. The 100 percent cost-share transportation subsidy needed for such a program would require funding of approximately $2.2 million per year. For a more modest program intending to subsidize shipment of 100 thousand tons, program subsidy costs would be approximately $275 thousand.
|Table 2. Poultry Litter Production and Potential Use by Region, 19971|
|Region||Poultry Litter Produced2 (tons)||Poultry Litter Needed for Crops3 (tons)|
|1 Use within poultry production counties of the region. Crop/hay/pasture needs estimated on phosphorus-need basis.|
2 Summed tons of broiler and turkey litter.
3 Suitable crops include corn, wheat, barley, hay, and pasture. Assumes 100% adoption.
|Table 3. Potential of Subsidized Litter Transport by Mileage Zone1|
|Miles from Harrisonburg||Poultry Litter Transported to Mileage Zone2||Cumulative Litter Transported||Transport Cost to Mileage Zone3||Cumulative Transport Cost||Average Transport Subsidy in Mileage Zone||Average Cumulative TransportSubsidy|
|('000 tons)||('000 tons)||($'000)||($'000)||($/ton)||($/ton)|
|1 Assumes litter transport subsidy program paying 100% of transport cost over 25 miles from Harrisonburg with assumed adoption rates of 50% of suitable corn, wheat and barley, and 10% of hay and pasture acreage in each county.|
2 Litter needs are greater of P2O5 recommendation or crop removal rates.
2 Subsidy for each zone based on $.11 per ton-mile and the distance of each city/county seat from Harrisonburg, Va.
If poultry-producing farms must apply litter on a phosphorus basis, unarguably more litter will be for sale. In regions of intense poultry production and limited land application alternatives, litter prices will likely be lower, unless new litter markets become available. A litter transport subsidy program effectively increases the demand for litter by farmer-users who are seeking cost-effective fertilization of crops, hay, and pasture, and thus supports the litter sale price received by the grower. Other litter use alternatives, such as granulation for land application and for sale in non-farm markets, also will support litter prices. Absent information on land availability and phosphorus use potential on poultry-producing farms, however, it is impossible to tell whether such programs will balance the price-decreasing effect of phosphorus-based nutrient management plans.
A related study (Pelletier, B. and D. Kenyon. Poultry Litter for Corn Exchange Program for Virginia, Virginia Cooperative Extension Bulletin 448-246/REAP R048, Rural Economic Analysis Program, Blacksburg, Va.: Virginia Tech) examined the potential for a grain-for-litter exchange program between grain producers in eastern Virginia and poultry integrators in the Shenandoah Valley. Virginia poultry integrators import more than 40 million bushels of corn per year from outside the state, yet approximately 23 million bushels are produced within 200 miles of Harrisonburg. The following points indicate the conclusions of their study:
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