Brumm: The Economics of Pig Manure

By Mike Brumm

Last week I did the math on how much manure is captured each year in typical grow-finish facilities. Today I’d like to do the math regarding the expected value of this manure as a fertilizer resource when injected in the fall following removal from the storage pit.

While the analysis of the amount of nitrogen, phosphorus and potassium per thousand gallons can vary quite a bit depending on the amounts of ddgs, wheat midds, synthetic amino acids and enzymes included in the diets, the amount of wasted water also impacts the composition. For today’s blog I’m going to use manure that has a laboratory analysis of 50 lbs of nitrogen, 35 pounds of phosphate (P2O5) and 25 pounds of potassium (K2O) per one thousand gallons of manure. We’ll assume this is the average analysis of the samples collected during the pumping and application of the manure to cropland.

This past week, USDA Market News reported in NW_GR210 that the average fertilizer costs in Iowa were $595/ton for anhydrous ammonia ($0.36/lb N), $485/ton for MAP or Monoammonium Phosphate ($0.39 per lb P205) and $360/ton for potash ($0.30/lb K20). I’m going to use $0.015/gal as the cost to agitate, transport and inject the liquid manure on a producer’s cropland.

Lets’ use the 400,000 gallons of manure that we generate each year from a 1248 head permitted facility as the starting point. With the 50-35-25 lb/1000 gal analysis, this manure contains 20,000 lb of nitrogen, 14,000 lb of P2O5 and 10,000 lb of K2O. At the above prices, this has a value before land application of $14,400. Another way of stating the value is $39.15 per 1000 gallons based on the nitrogen, phosphorus and potassium content.

Land application costs $6,000 leaving a net value of $8,400. At 1248 pig spaces and 2.7 groups of pigs per year in the facility, this becomes a net value of $6.73 per space or $2.49 per pig placed.

This value doesn’t include any credit for micro-nutrients such as sulphur or zinc or organic matter credits. The final value may change over the winter months depending on soil temperature at the time of injection as warmer soil temperatures result in more nitrification or bacterial conversion of the ammonium nitrogen to nitrate nitrogen which has a higher risk of being leached from the soil with spring rains.

With typical grow-finish contracts paying $36/space/year, the net of $6.73 per space for the manure is like getting almost a 20% bonus. This bonus is a very big factor in the decision by corn and soybean farmers to invest in contract pig facilities because it represents how much less they have to expend on commercial fertilizers for their corn and soybeans.

Yes – pigs smell like money. Now you know how much money you’re smelling when you drive by a site doing land application of the manure.

Source: MNPork