Last summer, ammonia fertilizer was $420/ton, and in late January it was $787/ton: an 87% increase in six months.
While visiting a client in northeast Nebraska in December, he said, “Let me show you the ‘Miracle of Manure.’” He has swine animal waste he has applied on his land for years and other land where he has only applied commercial fertilizer, as it’s too far away to apply manure. On comparable soils, irrigated and dryland, there was a noticeable difference in yield where animal waste had been applied over a number of years. The yield difference was 20-25-bu. higher yields for corn and about an 11-bu. yield difference for soybeans, from 59- to 70-bu. average differences.
This coupled with the cost savings, even after application costs, brings the total bottom-line difference of increased yield and reduced cost to conservatively $150/acre.
This also helps pay for high-priced land, as the net present value of $150 over 25 years at a 3% discount rate is $2,611/acre. Having animal waste that can be economically applied and done correctly is a competitive advantage.
As Warren Buffet says, a sound business with a competitive advantage can be compared to a castle with a moat around it. The larger the moat, the better the protection. The larger your competitive advantage, the more profitable and sustainable you will be.
I did some analysis of several manure nutrient analysis of our wean-to-finish hog barns as well as a number of our clients’. On average the nutrient analysis was 41.3 lbs. nitrogen (N) (first-year availability), 26.7 lbs. phosphorus (P) and 32.9 lbs. potash (K).
With today’s fertilizer prices of 48¢/unit of N, 76¢/unit of P and 48¢/unit of K, this has an equivalent value of $55.76/1,000 gal.
If 3,200 gal. are applied, the value is $178.43/acre. Application costs could amount to a fourth of that value but the net is still significant.
If grain prices stay high and fertilizer follows grain prices, this value could be even more significant.
The trace minerals in the manure are an added bonus, yet very valuable. Reports from growers also indicated soil organic matter increased over time with continued animal-waste applications, and increased organic matter adds to the nutrient and water-holding capacity of the soil.
I was growing up on our eastern Iowa grain and livestock farm in the mid-1960s. When you do the math, this makes me old! We raised hogs with, then, state of the art Cargill open-front buildings. The manure-management plans and practices used now far surpass those we used in the mid-1960s. The manure was not contained, so heavy rain washed part of it away. It was not stored as we do today where nutrients are preserved, and it was not applied with applicators as we do today to retain maximum nutrient value.
Coincidentally, the hogs were very uncomfortable during winter days and nights. The sustainable systems we have today better protect our environment as well as the animals.