Challenges and Opportunities for a Manure Market in Iowa

By Christopher C. Pudenz and Lee L. Schulz

Manure, which is produced as a joint product with the live-weight of animals and animal products (Roka and Hoag 1996; Ritz 2016), has long been utilized as fertilizer for crops and as a soil amendment (MacDonald et al. 2009). Utilizing manure for fertilizer is an efficient and potentially revenue-generating use of what otherwise would be a waste product. Additionally, given that a variety of livestock species and many operations produce manure, it serves as a source of fertilizer that is largely resilient to international shocks that have plagued the commercial fertilizer market.

Iowa ranks first in total corn production in the United States and consequently has a large need for fertilizer (USDA-NASS 2022). Iowa also produces a lot of manure, as it leads the United States in egg production, has the second-most hog operations, the largest hog inventory, the most cattle feedlots, and the fourth-largest cattle-on-feed inventory (table 1).

Iowa’s major production and use of manure provides opportunities for complementarities between row-crop and livestock production. A 2014 survey reveals that 98% of Iowa cattle feedlot operations apply the manure they produce to cropland they own or manage (Schulz 2014); and, nationally, 76% of hog farms in 2009 applied manure on their own farm (Key et al. 2011). There does not appear to be robust trade for manure in Iowa, which is not surprising given the survey findings. Most Iowa cattle feedlots indicate they do not sell their manure (Schulz 2014); and, nationally, only 5% of hog farms sell manure (Key et al. 2011). Earlier studies reveal that only 5% of US dairy farms and 16% of US hog farms remove manure from their operations, and any manure markets that do exist tend to be highly localized (MacDonald et al. 2009). However, in an economic environment where demand outpaces commercial nutrient supplies, and sustainability practices are front-of-mind, is a larger market for manure economically viable? And, if not, what are the roadblocks to viability?

How much fertilizer does Iowa livestock produce?

Any market requires both buyers and sellers. It is not possible to know, with absolute precision, the supply of manure in Iowa, but it is possible to estimate potential supply and potential demand. According to estimates utilizing data from the 2012 Census of Agriculture, manure could supply about 30% of Iowa’s nitrogen and phosphorus fertilizer needs (Anderson 2014). These estimates account for livestock populations, manure nutrient availability, and crop nutrient-assimilative capacity.

Farms that have both livestock and crops already utilize much of the potential manure supply. In fact, estimates using corn and soybean acreage in 2012 indicate that approximately 17% of Iowa’s farmable acres received manure (Anderson 2014). In 2006, only 5% of total planted acreage received manure in the United States (MacDonald et al. 2009). However, it is possible that some of the farms are over-applying manure for the sake of disposal, and thus it could be spread on far more cropland acres (MacDonald et al. 2009). Even so, many farms might not be looking to sell any of their manure—99% of Iowa cattle feedlots indicate they have enough land to utilize the manure produced by their operations (Schulz 2014).

Shocks and trends in the livestock industry can further reduce the amount of manure that might be available. Specifically, as of June 3, the 2022 outbreak of the highly pathogenic avian influenza (HPAI) virus had affected more than 13 million birds in commercial and backyard flocks in Iowa (USDA-APHIS 2022). This reduced flock size decreases the amount of poultry manure produced in the state. The beef cattle industry is three years into the downturn of the current cattle inventory cycle and the spike in costs has been a leading factor in swine industry contraction. When livestock inventories decline so too does the manure co-product.

Opportunities and challenges

The combination of livestock and crop production in Iowa provides a unique agricultural system that leads to economic advantages from complementary production, but using livestock manure as a substitute for commercial fertilizer presents several opportunities and challenges. Table 2 highlights some of these opportunities—the highest ranked reason is because it adds to soil organic matter, and the second-highest ranked reason is that cattle feedlot manure is a good source of phosphorous.
 

The fertilizer value of manure depends on nutrient concentration, and nutrient concentration varies according to animal species, animal genetics, production management and facility type, and the details of manure collection, bedding, storage, handling, and agitation for land application (Sawyer and Mallarino 2016). Similar factors influence the total amount of manure produced by livestock (Iowa DNR 2021). Roughly 77% of fed cattle in Iowa are finished in an open lot, while only 4% are finished in a building with a slatted floor or deep pit (Schulz 2014). Open feedlots tend to have relatively low costs for manure handling, but they also have relatively low nutrient capture and value (Euken et al. 2015). By comparison, more than 90% of swine sites, and 99% of all pigs are housed in facilities with no outside access (USDA 2015). This means that manure from hog operations will be more consistent in plant-available nutrient content than manure from cattle feedlots. As table 3 shows, unpredictable nutrient availability is a leading reason why Iowa cattle feedlot operators think crop farmers are reluctant to use manure for fertilizer.
 

Even when exact nutrient values of manure are determined, it is important to keep in mind that not all nutrients are available for plant use right way, if ever. On the other hand, commercial fertilizers (e.g., anhydrous ammonia) contain nutrients that are ready for immediate use by crops (Sawyer and Mallarino 2016). Phosphorous and potassium contained in animal manure are estimated to be 100% available for plants (eventually), but only 30%–50% of nitrogen from beef and dairy cattle manure (solid or liquid) is available in the first year after application (Sawyer and Mallarino 2016). An additional 10% of the nitrogen is available in the second year, and 5% in the third, but not all nitrogen becomes available even as time progresses. Further reducing the effectiveness of cattle manure as a source of nitrogen is volatilization, which leads to a 15%–30% loss of nitrogen for solid manure applied using broadcast methods with no incorporation. Immediate incorporation reduces this nitrogen loss to 5% or less, but only 20% of Iowa feedlots use this practice (Schulz 2014). Furthermore, no feedlot operators that transfer manure off their farms include incorporation of the manure within 24 hours (Schulz 2014).

A number of issues related to transportation and application of manure also hinder development of a manure market. In 2006, for example, over half of US harvested crops were on farms with no livestock production, and manure can be expensive to transport even short distances (MacDonald et al. 2009). Further complicating the matter is that 48% of Iowa cattle feedlots that sell manure charge for their manure by unit volume, weight, or load, which does not account for transportation costs (Schulz 2014).

Figure 1 depicts the density of cattle and calves, hogs and pigs, and corn production in Iowa according to the 2017 Census of Agriculture and highlights the importance of manure transportation costs. Cattle production is concentrated in the northwest and northeast corners of the state. Hogs and pigs are mostly located in the northern half of the state with a large production region in the southeastern corner. By comparison, corn production is much more prevalent and uniformly distributed across the state. Even with elevated commercial fertilizer prices, not all corn acreage is located close enough to livestock operations for manure to be an economically viable fertilizer source when considering transportation costs.

In regard to application issues, table 3 shows that compaction from manure application is the highest-ranked reason for crop producers being reluctant to use feedlot manure for fertilizer. At the same time, only 4% of Iowa cattle feedlots that transferred manure off their operations in 2014 provided tillage to address compaction from manure application (Schulz 2014). Manure application also requires specialized equipment and equipment operators, which subjects manure sellers to machinery and labor markets and associated challenges. All told, manure is an important but imperfect substitute for commercial fertilizer.

Moving forward

Considering these challenges, Iowa’s livestock producers and crop farmers may have to adjust practices for a statewide manure market to develop. Nearly 43% of cattle feedlot survey respondents who transferred manure off their farm did not partner with anyone to do so, though partnerships between livestock producers and crop farmers, crop consultants, fertilizer dealers, and organic product brokers are possible (Schulz 2014). Livestock producers could also consider adopting agronomic services such as manure analysis, soil testing, and measurement of application rate, among others. This would make their manure more marketable and alleviate crop farmer concerns about using manure as fertilizer. Finally, there may be an opportunity for a so-called “market maker” to enter the scene and facilitate manure transfers.

References

Euken, R., B. Doran, C. Clark, S. Shouse, S. Ellis, D.D. Loy, and L.L. Schulz. 2015. “Beef Feedlot Systems Manual.” Iowa State University Extension and Outreach PM1867.

Iowa DNR. 2021. “Manure Management Plan Form: Appendix A.” Iowa Department of Natural Resources.

Key, N., W.D. McBride, M. Ribaudo, and S. Sneeringer. 2011. “Trends and Developments in Hog Manure Management: 1998-2009.” USDA-ERS Economic Information Bulletin No. (EIB-81).

MacDonald, J.M., M.O. Ribaudo, M.J. Livingston, J. Beckman, and W. Huang. 2009. “Manure Use for Fertilizer and for Energy: Report to Congress.” USDA-ERS Administrative Publication No. (AP-037).

Ritz, C.W. 2016. “Maximizing Poultry Manure Use through Nutrient Management Planning.” University of Georgia Extension Bulletin 1245.

Roka, F.M., and D.L. Hoag. 1996. “Manure Value and Liveweight Swine Decisions.” Journal of Agricultural and Applied Economics 28(1): 193–202.

Saywer, J., and A. Mallarino. 2016. “Using Manure Nutrients for Crop Production.” Iowa State University Extension and Outreach PMR1003.

Schulz, L.L. 2014. “Iowa Beef Center 2014 Feedlot Operator Survey.” Iowa State University Extension and Outreach IBC102.

USDA-APHIS. 2015. “Swine 2012 Part I: Baseline Reference of Swine Health and Management in the United States, 2012” USDA–APHIS–VS, CEAH. Fort Collins, CO #663.0814.

USDA-APHIS. 2022. “2022 Confirmations of Highly Pathogenic Avian Influenza in Commercial and Backyard Flocks.” U.S. Department of Agriculture, Animal and Plant Health Inspection Service.

USDA-NASS. 2022. “Crop Production 2021 Summary (January 2022).” U.S. Department of Agriculture, National Agricultural Statistics Service.

Suggested citation:

Pudenz, C.C. and L. Schulz. 2022. "Challenges and Opportunities for a Manure Market in Iowa." Agricultural Policy Review, Spring 2022. Center for Agricultural and Rural Development, Iowa State University. Available at www.card.iastate.edu/ag_policy_review/article/?a=141.