Managing Animal Residuals for Economic Gain

Remarks by Bruce I. Knight, Chief Natural Resources Conservation Service at the Animal Residuals Conference: Alternative Technologies, Approaches and Biosecurity, Arlington, VA
November 3, 2003

Thank you, Tom (Christensen), and thank you, Ted (Payseur). And thank you, Commissioner Rudgers, for your kind words about the Natural Resources Conservation Service. Good morning, everyone. It is wonderful to see so many people here today to explore ways to capture the potential value of animal residuals.

It is a pleasure to share the podium this morning with Commissioner Rudgers. We are lucky to have the interest and support of such a strong leader in our efforts to find and develop markets for animal residuals. I would like add my thanks to the U.S. Department of Energy, the U.S. Environmental Protection Agency, and the Water Environment Federation for joining with the Natural Resources Conservation Service in sponsoring this conference.

As you have already heard, this is the fifth in a series of animal residuals conferences. The first one was in Crystal City four years ago. My first conference as Chief of NRCS was the Anaerobic Digester Summit in June in Raleigh. Each year, there is more interest in market-based opportunities for managing animal residuals, and new participants come to the conference.

Animal residuals play a role in the Administration’s Climate Change Strategy. The President has committed the United States to participate in voluntary greenhouse gas registry improvements. He specifically requested Secretary Veneman to develop accounting rules and guidelines for crediting sequestration projects in consultation with EPA and the Department of Energy.

This year alone has seen much progress:

In January, EPA announced its new voluntary Water Quality Trading Policy. USDA provided input to EPA on this policy.

This spring, USDA established an interagency Environmental Credit Trading Workgroup to help develop a USDA Environmental Credit Trading policy to provide guidance across USDA agencies on their roles as enablers of voluntary credit trading. This USDA policy will seek to enable market approaches that provide an opportunity for farmers and ranchers to generate income for actions that benefit the environment. The goal of the USDA Workgroup is to have a draft policy, ready for review within USDA by December 2003.

In July, USDA, EPA, and others cosponsored a national forum in Chicago to promote and exchange information on water quality credit trading.

This year, USDA is also holding a series of case study dialogues in Washington, DC, highlighting active credit trading projects from the perspectives of buyers, sellers, and aggregators. The purpose of these dialogues is to gain insight from organizations that have been involved in establishing different environmental credit trading markets, as USDA prepares its Environmental Credit Trading Policy.

The USDA Environmental Credit Trading Work Group is charged with establishing these dialogues, as well as facilitating the development of the USDA Environmental Credit Trading Policy. The dialogues are by invitation, but there is a public session prior to each one. The two remaining public sessions are November 20 – Iowa Farm Bureau Wetlands Banking Case Study – and December 11 – Winrock International-Carbon Sequestration

We sent out flyers and notices to individuals and organizations that might be interested in environmental credit trading. There was so much interest, we are thinking of having more of these open sessions.

This year, we also began working with several partners, including EPA, to facilitate a environmental credit trading pilot within a large watershed. The trading pilot, which will be in the Ohio Basin, will demonstrate the importance of establishing a working watershed partnership among local industries, farmers, nongovernmental organizations, local governments, State jurisdictions, and Federal agencies.

A key to the active involvement of individual farmers will be the inclusion in the watershed partnership of local soil and water conservation districts, multi-county Resource Conservation and Development Councils, commodity and livestock organizations, and other representatives of the local agricultural and natural resource conservation community.

The pilot will use a variety of funding sources and will provide the greatest benefits to agriculture in areas having the greatest potential water quality and air quality benefits.

Each year, there is more to report on the conservation front. The fact that this week’s conference is devoted mainly to case studies shows that solutions are emerging for complex challenges. The good news today is that we are rapidly moving beyond the world of good ideas to the world of practical solutions.


National Animal Agriculture Conservation Framework

I want to start out today with a brief commercial for the draft National Animal Agriculture Conservation Framework released by the U.S. Department of Agriculture in September. The draft national framework has four objectives: to help producers meet environmental regulatory requirements; to assist in implementing flexible, results-based multimedia solutions; To promote innovation and market-based opportunities; and to share knowledge and increase accountability.

Strategies in the framework include focusing public conservation assistance on locally identified priorities, strengthening current markets and fostering development of new ones, and developing and verifying alternative technologies and tools.

Secretary Veneman has said that the “framework emphasizes the importance of a public-private partnership to promote environmental stewardship in animal agriculture,” and she has committed the Department of Agriculture to “working with all interested parities to develop and implement approaches to help the nation’s livestock and poultry producers meet today’s needs.”

I hope many of you took the opportunity to comment on the draft framework. The comment period closed October 27, and we are now sorting through the comments. We anticipate completing the National Framework early in 2004.

The framework grew out of the priority set by the 2002 farm bill on meeting the conservation needs of the livestock and poultry industries. I met with national livestock and poultry association leaders in January 2003 and committed to working with them and other partners in meeting the conservation challenges facing animal agriculture producers.

I asked the NRCS State Conservationists and Directors of the Caribbean and Pacific Basin Areas to work with their State Technical Committees to develop draft State and Area Frameworks for meeting this challenge, and to provide input for the National Framework.

The frameworks at all levels are intended to help strengthen the partnership effort to assist livestock and poultry producers, improve their environmental performance, and address applicable regulatory requirements over the next 10 to 15 years, while maintaining economically viable operations.


Progress in Managing Animal Residuals

This morning I would also like to say a few words about each of the major topics we will be covering this week: alternative technologies, value-added options, animal manure as fertilizer, and financing farm waste management.
Alternative Technologies
One of the most exciting alternative technologies is anaerobic digesters, as we discussed in Raleigh earlier this year.

The Chino Basin in California represents a great success for digester technology. The Basin has a concentration of 270 dairies with more than 350,000 dairy animals producing close to one million tons of manure annually. The dairies are a $1 billion industry and provide 25 percent of California’s milk production.

The project includes an anaerobic digester, considerable concrete storage basins, and flood control works to divert clean water around the facility and the cooperating dairy facilities.

The Chino Basin Project is presently designed to handle 225 tons of manure per day or the waste from 6,250 milk cows. The gas captured from the digester is used to generate enough electricity (400 kilowatts) to power the Chino 1 Desalter, which provides for municipal water supply to 20,000 families in the area. The solids produced in the waste management process are composted and converted to a value added product that is marketed nationally. The project not only addresses water quality concerns normally associated with animal operations, but green house gas emissions, which are more and more becoming a key issue.

The project sponsors are Inland Empire Utilities Agency (a Southern California based water utility and watershed manager) and the California Milk Producer’s Council (a local dairy industry trade group). The waste system management on the project is being handled by Synagro (a residuals management company).

This is a good example of an innovative community solution to address alternatives to traditional land application of manure that provides a win-win solution for the producer and the environment.


Value Added Options

Not only are anaerobic digesters an exciting technology, they are also a great value added option. The biogas produced during digestion may be used to generate energy or may be flared off to the atmosphere if insufficient biogas is produced to make energy generation feasible or economical.

Barnham Farms near Zebulon, North Carolina, uses a digester to produce electricity which powers much of the swine operation. Heat from the generator is captured and used to produce hot water that is used in farm production activities. Effluent from the digester flow is used to fertilize plant and vegetable species in a greenhouse adjacent to the wine production facilities. Many of you toured this farm last June as a part of the Anaerobic Digester Summit.

In another value added application, the Bosque River Dairy Manure Composting Project removes animal waste from the North Bosque River watershed, which is the major supplier of drinking water for the city of Waco, Texas. The goal of this project is to remove at least 50 percent of manure nutrients from the watershed by making compost that can be sold to farmers and landscapers in other areas. As of last January, the project had removed over 500 thousand tons of dairy manure from the watershed.


Animal Manure as Fertilizer

Confined animal operations in the United States produce manure containing over 3 billion pounds of recoverable nitrogen and 1.4 billion pounds of recoverable phosphorus, along with other nutrients. That is one reason why fertilizer products will remain an important part of managing animal residuals.

Perdue Poultry and AgriRecycle started a production facility in Delaware in 2001, transforming poultry litter into commercial fertilizer. This facility provides an environmentally sound alternative for sustainable poultry production and is just one example showing industry’s growing commitment to environmental stewardship. The Perdue AgriRecycle process begins on many poultry farms on the Delmarva Peninsula, where surplus poultry litter is loaded into specially designed, sealed trucks for transport to the pellet plant. The trucks are unloaded inside the plant, where a negative-air system prevents dust and odor from escaping to the environment. Special filters and scrubbers ensure that the air leaving the plant is cleaner than the outside air.

Harmony Products and Cargill, Inc., have a joint venture project in the Harrisonburg, Virginia, area in which turkey litter from the surrounding area is manufactured into a series of fertilizer products. By augmenting the nutrients found in the litter with the additional nutrients needed for a specific use, Harmony Products is able to offer a line of fertilizer products for lawns, gardens, and turf applications. This year, Harmony Products sold more than 9,000 tons of turkey litter-based fertilizer from this plant in the Shenandoah Valley.


Financing Farm Waste Management

One of the big questions in managing animal residuals is, “What does it all cost?”

NRCS recently released the publication titled: “Costs Associated with Development and Implementation of Comprehensive Nutrient Management Plans”, the result of a two-year study.

The report estimates that 257,000 farms and ranches are covered by USDA’s expectation that all animal feeding operations would voluntarily develop and implement Comprehensive Nutrient Management Plans (CNMPs). The total estimated cost to install the practices that make up these CNMPs is $17 billion, and the cost of technical professionals to design the practices and help the producer install them would be $2 billion. This represents an average cost to plan and implement a CNMP of about $76,000, including technical assistance.

To put this into perspective, this represents the equivalent of the conservation provisions of two 2002 farm bills. Keep in mind that the current farm bill is focused on numerous natural resource issues, not just AFO concerns. It is currently estimated that about $2 billion of the current farm bill will be applied towards CNMP-related efforts over the next five years.

A lot of people still see manure as waste. This is a mind set that needs to change. These 257,000 AFOs produce 3 billion pounds of nitrogen and 1.4 billion pounds of phosphorus per year. These quantities of nutrients would be sufficient to meet the crop nutrient needs on over 18 million acres. Conservatively, that’s the equivalent of $1 billion of fertilizer.

However, the study shows there are about 250 counties in the United States that do not have enough crop and pasture land to utilize all the nutrient produced by animal feeding operations in those counties through land application of manure. This presents some challenges for finding cost-effective alternatives to traditional methods of manure utilization. Overcoming some of the road blocks that currently exist to pursuing these needed alternatives, will be addressed at this Conference.


Future Needs

Beyond the need for money to finance improvements in animal residuals management, there are a host of other questions we need to answer.

Many natural resource problems span geographic areas and property lines, requiring regional or community-based solutions. How can NRCS and its many partners encourage landowners to join forces to begin addressing regional or community-based natural resource problems? What social, economic, and technical assistance resources are necessary to support the development of regional solutions? Currently, NRCS conservation funds generally flow to individual producers. What other financial resources do States and Federal agencies have available to support regional solutions? What more can the Federal and State government do to help build markets for animal residual products?

There are also a number animal residuals issues that need more research, including pathogens found in animal residuals – now they contribute to the health and welfare of the nation, its population, and to security issues; pharmaceuticals found in animal residuals – whether they contribute to increased resistance by disease producing organisms; and air quality – the effects of odor, airborne chemical compounds, and pathogens on the health and lifestyle of neighbors of animal operations.

And, finally, we need better technology transfer with regard to animal residuals, including performance standards to measure what technology works and what does not, a technology verification system to make sure that technologies that are introduced really do perform, and
additional conservation practice standards and technical notes, as new practices and technology are developed, to assist in educating producers and ensuring quality performance.

But even with all these open questions, research needs, and technology transfer challenges, we are still in an exciting time for turning a significant environmental challenge into an equally significant opportunity – as this week’s conference will demonstrate.

The Department of Agriculture and the Natural Resources Conservation Service look forward to working with all interested parties in this effort.

Thank You.