Why Are Business Agreements Important?
Regardless of whether manure will be land applied for crop production, composted for use in nurseries, or used to generate methane, if the manure moves out of the business where it was produced, a business arrangement has been used. Business arrangements need two willing participants, a way that they can meet, agreed on terms and price, and a document spelling out expectations and responsibilities.
Local Arrangements for Manure Marketing
Often the manure producer will merchandise manure locally by contacting crop producing neighbors that need a source of nutrients. Even among neighbors it is important to get the agreement in writing to assure that both parties understand the responsibilities, application rates and manure price. This sample form for a manure agreement provide a framework for negotiations between buyers and sellers of manure. In addition to negotiating application rates and prices, it is also important for the livestock producer to secure the land for manure application as part of his/her manure management plan. An easement is a tool for legally securing land for manure application. The easement defines the rights and terms of the agreement and it “goes with the land” such that if the land is sold, the livestock producer still has a right to apply manure to the land. Here are two publications about manure easements and agreements.
Marketing Manure Over a Larger Area
If the local supply and demand for nutrients are such that the manure producer needs to consider a broader geographic area he may then look to other methods of reaching manure buyers. These methods may include brokerage services or market finder services. Manure brokerage services are fairly common in poultry sectors because firms often specialize in litter removal and bedding replacement as a service to the building owner. These firms then merchandise the litter to land owners or tenants as fertilizer and/or soil amendment. Some states or regions are also establishing market finder websites for manure buyers and sellers. Brokers are often frequent users of these sites, but not exclusively. Examples include:
If regions have a manure surplus and manure must be transported further it is often necessary to reduce the moisture of the manure to reduce transport costs. One program, the Texas Commission on Environmental Quality, offers a Composted Manure Incentive Project.
The EPA and USDA are encouraging market based incentive programs to help improve water quality in agriculture by developing a Water Quality Credit Trading Agreement. EPA has a website with information about water quality trading, FAQs, and a map of existing programs and an online presentation. One example of environmental credit trading is in the Chesapeake Bay region including an example of nutrient trading for agriculture.
Nutrient trading programs are complex and must involve parties with excess nutrients and individuals that can make environmental improvements at lower cost than the excess nutrient parties. However, if well functioning markets for nutrients do not remove enough nutrients from a watershed, water quality trading credits may be a viable option. Often the value of manure nutrients as fertilizer is a sufficient incentive to encourage offsite movement of manure. It may be necessary to help fledgling markets evolve by getting buyers and sellers together, but typically profit minded farmers or service providers will put manure where it has the greatest economic value.
Page authors: John D. Lawrence, Iowa State University, and Raymond E. Massey, University of Missouri
Page reviewers: Kelly Zering, North Carolina State University and Josh B. Payne, Oklahoma State University