Economics of Conventional Dairy Manure Management in North Central Texas

Manure management costs are a substantial component of overall costs on a modern dairy farm. Due to the slim margins of contemporary milk production operations, dairies are under constant pressure to increase milking herd sizes to take advantage of size economies that enable them to compete in the global marketplace. This study provides a current assessment of manure management and overall costs and returns on four standard sizes of dairies typical of the southern Great Plains, particularly north central Texas. The study is necessitated by the fact that the changing economic landscape has resulted in substantial changes in manure management practices. This study also forms the basis for additional analyses that will explore alternative value-added options for dairy manure management. We utilize the Farm-level Economic Model to holistically simulate the costs and returns of four representative dairy herd sizes—small (300 cows), medium (720 cows), large (1500 cows), and very large (5000 cows). Based on prevailing assumptions about land areas farmed and farm management practices, we find that dairy farms require between 0.18 and 0.4 ha/cow to manage manure based on crop nitrogen uptake rates, versus 0.67 to 0.95 ha/cow for crop phosphorus uptake rates. Manure application costs alone range from USD 55/cow (USD 225/ha) to USD 115/cow (USD 300/ha) depending on dairy size, but some of these costs are offset by fertilizer cost savings. Proportion of manure hauled offsite ranges from 9% to 67% for phosphorus-based applications, depending on herd size, and net incomes per cow are reduced by USD 60 to USD 100 (USD 4.33 to USD 8.27 per Mg of milk) if manure is applied based on phosphorus uptake rates as compared to nitrogen uptake rates of receiving crops. Generating a broad array of economically viable value-added product options from dairy manure would enable farmers to be more competitive in a market characterized by thin margins.