Manure Management for Water Quality: Costs 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 Chapter 1–Introduction Livestock and poultry manure can provide valuable sion affecting the potential for contamination of water organic material and nutrients for crop and pasture resources by manure nutrients (Mulla et al., 1999). growth. However, nutrients contained in animal manure can degrade water quality if they are over- Recent policies and programs for increasing the effi- applied to land and enter water resources through cient use of nutrients and protecting water quality from runoff or leaching. The nutrients of greatest water nutrient runoff all emphasize the importance of proper- quality concern are nitrogen and phosphorus. Animal ly handling animal manure. The Unified Strategy for waste is a source of both. Animal Feeding Operations, jointly developed by the U.S. Department of Agriculture (USDA) and the A shift in the livestock and poultry industry over the Environmental Protection Agency (EPA) in 1999, past several decades toward fewer, larger operations states: “Land application is the most common, and has prompted public concern over the use and disposal usually most desirable method of utilizing manure of animal manure. Manure lagoon spills in North because of the value of the nutrients and organic mat- Carolina and pfiesteria piscicida outbreaks in North ter. Land application should be planned to ensure that Carolina and Maryland have raised public concerns the proper amounts of all nutrients are applied in a about the way manure is stored and handled. In way that does not cause harm to the environment or to response, State and Federal environmental protection public health. Land application in accordance with a authorities now require that manure be handled and comprehensive nutrient management plan (CNMP) applied to land so as to minimize runoff and leaching. should minimize water quality and public health risk” However, such restrictions affect livestock and poultry (USDA-EPA, 1999, pp. 8-9). A goal of the Unified production costs. Strategy is that all animal feeding operations—regard- less of size—voluntarily adopt CNMPs for managing Producing feed on the farm, once a mainstay of animal their nutrient resources, including both commercial production, is becoming rare. As animal operations fertilizer and animal manure. grow larger, they increasingly buy feed from outside the farm. This is reflected in the reduced amount of However, rules promulgated in 2003 by EPA are available cropland per animal on livestock and poultry designed to change the way animal operations are han- farms (Gollehon et al., 2001). Nevertheless, land appli- dled under the Clean Water Act. Under the new regula- cation is still the predominant method for disposing of tions, “concentrated animal feeding operations” manure and recycling its nutrient and organic content (CAFOs) would be required to meet nutrient applica- (USDA-EPA, 1999). Concerns have consequently aris- tion standards as defined in a nutrient management en that crops and other vegetation are not fully assimi- plan. The plan would become a part of the National lating nutrients in manure, and that excess nutrients Pollutant Discharge Elimination System (NPDES) per- are increasingly likely to degrade nearby water mits that all CAFOs need in order to operate. resources. The land application rate—the quantity of Violations of the permit are subject to fines and/or manure spread on an acre of land—is believed to be facility closure. the single most important manure management deci- USDA/Economic Research Service Manure Management for Water Quality • 1 Implementation of nutrient standards for manure appli- Scope of Analysis cation will raise manure management costs for many farms. At the farm level, their implementation will, in many cases, require operators to find additional land As with all research, the strengths and limitations of this analysis are framed by the study objectives and reflect- on which to spread manure and to absorb the cost of ed in the study’s scope, methodology, and analytic transporting and applying animal manure to this land. assumptions. While motivated by Federal policy provi- If land off the farm is required, animal operations may sions first proposed in 1999, our study is not intended as incur additional rental payments or disposal fees. In a direct examination of either EPA’s new CAFO regula- most cases, though, the animal operation pays only the tions or USDA’s nutrient management policies. Rather, cost of hauling and applying manure. the study provides an independent analysis of a key pro- vision of these and other Federal and State animal waste In some areas of the country, large concentrations of initiatives—the land application of manure at agronomic confined animals would strain the ability of any indi- rates. The study examines the costs and feasibility of vidual CAFO to secure adequate land locally for reliance on land application for manure disposal and the spreading manure. The competition for land would effect of key factors (including policy provisions) on likely elevate waste-handling costs since some opera- these costs. tors would be forced to transport manure over longer distances for disposal. The willingness of crop produc- The study includes three analytic components—farm- ers to accept animal manure from livestock and poul- level, regional, and national analysis—to address a try operations will also determine land supply and range of issues pertinent to the land application question hauling distance. High transportation costs regionally (see table, p. 4). Each of these analyses focuses on could encourage the development and expansion of issues best evaluated at its respective scale. The farm- alternative uses of manure, such as for commercial fer- level analysis examines onfarm technical choice and tilizer or energy production. High manure management costs at the producer level for hauling manure to the costs could, under certain circumstances, induce ani- minimum amount of land needed to assimilate manure mal operations to spread out geographically, to relo- nutrients. The regional analysis focuses on off-farm cate to areas with more abundant land, or to reduce competition for land to spread surplus manure, using the herd size. Chesapeake Bay region as a case study. The sectorwide analysis addresses potential long-term structural adjust- Implementation of new requirements on animal waste ments at the national level and ultimate costs to con- management could affect not only producers, but con- sumers and producers. sumers as well. A substantial spike in waste manage- ment costs could result in regional shifts in animal While there are many differences in the scale, scope of production and increased prices for animal products analysis, economic variables, and assumptions about and certain feedgrains and other crops. various facets of the animal industry, there are several unifying elements. Crop producer willingness to accept manure and its influence on producer costs is critical Objectives throughout the range of analyses. Our treatment of Previous studies have suggested that restrictions on nutrient application standards, the primary policy tool, manure management similar to the ones promulgated adheres to a strict definition of the standards through- by EPA will increase the costs of manure management. out the study. Finally, the cost coefficients used to char- Systematic analyses across the different animal sectors acterize the nutrient management policies, as well as would help to identify critical issues arising from the physical coefficients used to convert animal num- implementation of the new rules. We present a multidi- bers to manure nutrients, are consistent among the three mensional framework, based on farm-level, regional, analyses. and sectorwide analyses (see box, “Scope of Analysis”). The different scales are important because each addresses a different set of issues or rules across farm types, regions, and a range of values questions.The interactions between the resource base for key policy variables. We specifically address com- and manure management are best examined at the petition for land on which to spread manure, an issue farm level. However, the impacts of a national policy that has not been addressed in the literature, as well as are felt across regions, and these impacts can be trans- the willingness of landowners to accept manure. ferred across the economy through the market system. We use the most comprehensive data available to pro- Chapter 2 reviews some of the structural changes that vide a fuller understanding of the costs of the new have occurred in the livestock and poultry sectors, ani- mal agriculture’s impact on water quality, State and 2 • Manure Management for Water Quality USDA/Economic Research Service Scope of Analysis Item Farm-level model Regional model National model (Chapter 3) (Chapter 4) (Chapter 5) Analytic focus Land required for Land required for National price, manure spreading, manure spreading, production, and and cost of hauling and cost of hauling welfare impacts Geographic scope Multistate regions Chesapeake Bay National Watershed Unit of analysis Farm County/subcounty USDA Farm Regions Species considered Swine, dairy Swine, dairy, poultry, Swine, dairy, poultry, feedlot beef all beef Manure system types Lagoon, slurry,