Purpose
The overall objectives of this research are to describe the current linkages among participants in the dairy manure compost supply chains in the Pacific Northwest (PNW) states of ID, OR, and WA and to provide analytical insights into the challenges and opportunities for enhancing manure compost marketability and usage in the different regions. Obtaining an enhanced understanding of these market dynamics is necessary for explaining why and how dairy compost quality varies and for identifying strategies for establishing and/or strengthening linkages among market participants. Improving dairy compost quality and increasing usage among crop producers is important for achieving sustainable environmental quality and agricultural business profitability in all PNW states.
What Did We Do?
Our analysis builds on the underlying concept that is outlined in Extension bulletins and other references from universities in the PNW (e.g., Chen et al. 2011), which emphasize that developing good quality dairy manure-based compost requires achieving a proper Carbon (C) to Nitrogen (N) ratio (C:N) of about 30:1. It is common that supplemental C is needed to increase the C:N balance in dairy manure-based compost to that magnitude. There are various sources of supplemental C used by PNW compost producers, but the most common are cereals (barley and wheat) straw, corn stalks/silage, sawdust, and wood chips.
We created Figure 1 to describe, with several assumptions, the major participants in the PNW dairy compost supply chains and the nature of their typical interactions with each other. The main participants include dairies, compost businesses, logging businesses, cereals farms, laboratory testers, and silage farmers. We next implemented data-driven analyses to determine if and the extent to which the linkages among the dairy compost supply chain participants differ across PNW states, based on the structure of the dairy and other aligned industries (e.g., logging) in each state. The principal objective of the analyses was to quantify the relative spatial concentration of the dairy industries, which has implications for business profitability and policy-driven incentives for implementing the composting process. We used a couple of different measures of dairy market concentration for comparison. The first is the Herfindahl-Hirschman Index (HHI), which is a statistical measure of industry concentration (Rhoades, 1993). We applied the calculation of the HHI in a manner that is different than is typically done such that the obtained values represent differences in the spatial concentration of the dairy industries in ID, OR, and WA. We supplemented the HHI values with calculations of the ratios of dairy cow inventories to cropland acreage. Lastly, to obtain insights about the relative strengths of linkages among potential dairy compost supply chain entities, we estimated the correlation between county level dairy cow inventories, cropland acreage, and the numbers of other entities (e.g., logging businesses) for each state.
What Have We Learned?
The estimated HHI values in our context could range from close to about 100, which would reflect an even distribution of dairy cows among all counties in a state, to 10,000, which would imply that all dairy cows are in a single county. Our estimated HHI values based on 2022 data from the USDA Census of Agriculture were 1,378 for ID, 2,307 for OR, and 2,082 for WA. Thus, by the HHI measure, the dairy industries in OR and WA are more spatially concentrated than that in ID. However, by the ratio of dairy cow inventory to cropland acreage measure, all states have counties with relatively high concentrations of dairy cows, but to different extents across states. Additionally, estimates from the correlation analysis at the county level show a positive relationship between dairy cow inventories and cropland acreage for all states (statistically significant at the 5% confidence level for OR). A negative, but not statistically significant, relationship was found between the number of logging businesses and dairy cows in all states, but the magnitude was largest in ID. Thus, it is more common that counties have both dairy cows and logging businesses in a county in OR and WA than in ID. These relationships help explain why wood-based amendments with higher C are likely more commonly used in the composting process in OR and WA than in ID, as well as how the associated compost qualities differ across states.
Future Plans
The analyses we have implemented so far are at the county level. We plan to implement additional analyses that include identifying larger multi-county dairy producing regions and compiling more data on the existing supply chain participants, including cropland acreage for other crops (i.e., non-grain and silage) in such regions. This expanded analysis will provide more regionally specific assessments of the differences in dairy compost components/quality among the major dairy producing regions in the PNW.
Authors
Presenting & corresponding author
Patrick Hatzenbuehler, Associate Professor and Extension Specialist – Crop Economics, University of Idaho, phatzenbuehler@uidaho.edu
Additional authors
Srijan Budhathoki, Graduate Student, Washington State University
Mario de Haro-Martí, Extension Educator – Gooding County, University of Idaho
Anthony Simerlink, Extension Educator – Power County, University of Idaho
Additional Information
Idaho Sustainable Agriculture Initiative for Dairy
Acknowledgements
Research funding was provided by USDA-NIFA Sustainable Agricultural Systems Grant No. 2020-69012-31871 and the Idaho Agricultural Experiment Station.
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