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LIBRARY
Layla Michigan State
University

 

This is to certify that the
thesis entitled

Financial Costs and Environmental Outcomes of the Michigan
5 Agriculture Environmental Assurance Program (MAEAP)

presented by
Carrie Lynn Vollmer-Sanders.

has-been accepted towards fulfillment
of the requirements for the

MS. degree in Agricultural Economics

 

 

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2/05 p:/CIRC/DateDue.indd-p.1

 

FINANCIAL COSTS AND ENVIRONMENTAL OUTCOMES OF THE
MICHIGAN AGRICULTURE ENVIRONMENTAL ASSURANCE PROGRAM
(MAEAP)

By

Carrie Lynn VOllmer-Sanders

A THESIS
Submitted to
Michigan State University
in partial fulﬁllment Of the requirements
for the degree of

MASTER OF SCIENCE
Department Of Agricultural Economics

2006

ABSTRACT

FINANCIAL COSTS AND ENVIRONMENTAL OUTCOMES OF THE MICHIGAN
AGRICULTURE ENVIRONMENTAL ASSURANCE PROGRAM (MAEAP)

By

Carrie Lynn Vollmer-Sanders

The Michigan Agriculture Environmental Assurance Program (MAEAP) is a
voluntary program for all sizes and types of Michigan farms. The intent of MAEAP is to
encourage producers to become better environmental stewards by providing producers
tools to make and maintain changes that improve environmental stewardship. The focus
of this study is the livestock system; all comments and conclusions are speciﬁc to that
system. Livestock producers with MAEAP-veriﬁed Operations were interviewed to verify
costs incurred and environmental outcomes achieved as a result of MAEAP veriﬁcation.
In addition, producer motivations for participation in MAEAP were also examined.

The total cost to become MAEAP veriﬁed was 5120.600 of which the average
producer paid $104,423 or $14,709 annually. The average livestock producer received
$16,177 through EQIP cost-share funds to lessen some of the financial burden. Livestock
producers realized an annual cost savings of $2,792 through the use of less commercial
fertilizers. The environmental outcomes were investigated using a cropland phosphorus
mass balance and ﬁeld phosphorus index. After becoming MAEAP veriﬁed, the average
Operation evaluated was in mass balance. The phosphorus index analysis indicated that
the high risk ﬁelds of the high risk farms were, on average, below a risk threshold after
becoming MAEAP veriﬁed. The major motivation to become MAEAP veriﬁed stemmed

from environmental regulations directed at the producer‘s size or type Of farm.

Copynghtby:
CARRIE LYNN VOLLMER-SANDERS

2006

My thesis is dedicated to my husband, sisters, and parents for their love and support and

to those producers I admire, who dedicate their lives to being stewards Of the land.

iv

ACKNOWLEDGEMENTS

With sincere thanks and appreciation I am grateful for my major professor and
committee chair, Dr. Sandra S. Batie, and committee members, Dr. Christopher A. Wolf
and Dr. David K. Beede. They have been supportive and constructive in conducting this
research. Dr. Batie has been a brilliant mentor, and I appreciate all Of her assistance in
helping me organize my professional and personal life. Dr. Wolf has given me insight to
farm business management and has been very helpful in broadening my perspective. I
also would like to thank the MSU Extension in Calhoun County (Natalie and Sharon) and
the MSU Water Institute (Dr. Bartholic and Scott) for their assistance in computing and
understanding the environmental impacts. The Michigan Department of Agriculture and
Michigan Natural Resources Conservation Service have also assisted in developing
interview questions and providing insights about the MAEAP.

The MSU community has been especially helpful in supporting me socially,
professionally, and ﬁnancially. Without the help from Janet Larson. Lisa Schulte, Debbie
Conway. and Ann Robinson, I am afraid I may have been lost in more ways than one.
Dr. Batie, Dr. Kirk Heinze, Mr. Larry Zink, Dr. Eric Crawford, and Dr. David
Schweikhardt helped me set and pursue my professional career goals. The MSU Animal
Industry Coalition and the MSU Elton R. Smith Endowment made it ﬁnancially possible
for me to attend graduate school at Michigan State.

My parents and husband have been extremely supportive of my career aspirations
and motivated me when I was delirious from typing. One statement I have wanted to tell
to my mother for the past 20 months “Yes, mom my paper is ﬁnally ﬁnished!” has come

to fruition today. I truly appreciated your support, even if] did not always express it.

TABLE OF CONTENTS

LIST OF TABLES ............................................................................................................. ix
KEY TO ACRONYMS .................................................................................................... xii
Chapter 1: Introduction ....................................................................................................... 1
1.1 Problem Statement .................................................................................................... 1
1.2 Objectives and Methods ............................................................................................ 4
1.3 Research Propositions ............................................................................................... 7
1.4 Thesis Organization ................................................................................................ 17
Chapter 2: Michigan Agriculture Environmental Assurance Program ............................. 18
2.1 Introduction ............................................................................................................. 18
2.2 Phosphorus in Manure, on Cropland, and in Water ................................................ 19
2.3 Development of MAEAP ........................................................................................ 21
2.4 Regulations Relevant to MAEAP ........................................................................... 23
2.5 Structure of MAEAP ............................................................................................... 24
2.6 Comprehensive Nutrient Management Plan ........................................................... 27
2.7 MAEAP-Veriﬁed Farms ......................................................................................... 28
2.8 Chapter Summary ................................................................................................... 29
Chapter 3: Interview Methods .......................................................................................... 30
3.1 Introduction ............................................................................................................. 30
3.2 Designing the Interview Instrument ........................................................................ 30

3. 2.1 Design and Objectives ..................................................................................... 31
3.2.2 Population and Sampling Method ................................................................... 32

3.3 Data Analysis .......................................................................................................... 33

3. 3.1 Standardizing the Data .................................................................................... 33
3.3.2 Changes C ost Calculations and Assumptions .................................................. 34
3.3.3 Environmental Calculations ............................................................................ 3 7
3.3.4 Reporting the Data ........................................................................................... 40

3.4 Chapter Summary ................................................................................................... 42
Chapter 4: Summary of Interview Results ........................................................................ 43
4.1 Introduction ............................................................................................................. 43
4.2 Operator Characteristics .......................................................................................... 44
4.3 Farm Operation Characteristics .............................................................................. 45

4. 3. 1 Land and Crops ................................................................................................ 45
4.3.2 Animal Units and Manure Sold ........................................................................ 4 7
4.3.3 Animal Density ................................................................................................. 50
4.3.4 Geographic Location ....................................................................................... 52

4.4 Starting the Comprehensive Nutrient Management Plan ........................................ 54

4. 4.1 Motivation to become MAEAP Veriﬁed ........................................................... 54
4.4.2 Agency Assistance ............................................................................................ 56

4.5 Barriers to Implementing the CNMP ...................................................................... 58
4.6 Perceived Environmental Outcomes ....................................................................... 62

vi

4.7 Opinions .................................................................................................................. 63

4.8 Comparison to Allen Krizek‘s Study ...................................................................... 67
4.9 Chapter Summary ................................................................................................... 68
Chapter 5: Financial Consequences of Becoming MAEAP Veriﬁed ............................... 70
5.1 Introduction ............................................................................................................. 70
5.2 Cost of Writing the CNMP ..................................................................................... 71
5.3 Cost of Implementing the Required Management Changes ................................... 74
5.4 Cost of Implementing the Required Capital Investment Changes .......................... 82
5.5 Cost-Share ............................................................................................................... 88
5.6 Total Cost to become MAEAP Veriﬁed ................................................................. 92
5.7 Costs per Geographic Region ................................................................................. 98
5.8 Costs Compared to Gross Farm Revenue ............................................................... 99
5.9 Summary ............................................................................................................... 102
Chapter 6: Environmental Outcomes from MAEAP Veriﬁcation .................................. 104
6.1 Introduction ........................................................................................................... 104
6.2 Limitation of the Environmental Outcome Quantiﬁcation Methods .................... 104
6.3 Changes by Species: Number and Cost ................................................................ 106
6.4 Barnyard Management Changes ........................................................................... 108
6.5 Cropland Phosphorus Mass Balance ..................................................................... 1 10
6.6 Phosphorus Index .................................................................................................. 1 14
6.7 Risk Level Effects on Changes Made ................................................................... 120
6.8 Summary ............................................................................................................... 121
Chapter 7: Proposition Analysis ..................................................................................... 123
7.1 Introduction ........................................................................................................... 123
7.2 Research Propositions ........................................................................................... 123
7.3 Summary ............................................................................................................... 137
Chapter 8: Summary and Conclusions ............................................................................ 139
8.1 Summary ............................................................................................................... 139
8.2 MAEAP’s Effectiveness ....................................................................................... 143
8.3 Policy Enhancement and Development Inﬂuencing MAEAP .............................. 144
8. 3.] Comprehensive Nutrient Management Plan Order and Calculations ........... 145
8. 3. 2 Increased Beneﬁts for MAEAP Verification .................................................. I 46
8. 3. 3 Targeting Finances to Critical Source Areas ................................................ l 46
8. 3.4 Environmental Quality Incentive Program Port/alto .................................... 147
8.3.5 Manifests ........................................................................................................ 148
8.4 Limitations of this Study ....................................................................................... 149
8.5 Recommended Future Research ........................................................................... 151
APPENDIX A: Calculating Animal Units: Following Criteria from Permit MIG 010000
Compared to those criteria of the General Permit MIG 440000 ..................................... 155 .
APPENDIX B: NPDES General Permit (MIG440000) .................................................. 159
APPENDIX C: Plan Writer Cover Letter, Survey, and Results ..................................... 161

vii

Plan Writer Cover Letter ............................................................................................. 162

Plan Writer Survey ...................................................................................................... 164
Plan Writer Results ..................................................................................................... 169
APPENDIX D: MAEAP Adoption Producer Interview Cover Letter, FAQ Page, and
Questionnaire .................................................................................................................. 1 76
MAEAP Adoption Producer Interview Cover Letter ................................................. 177
MAEAP Adoption Producer Interview Frequently Asked Questions ........................ 179
MAEAP Adoption Producer Interview Questionnaire ............................................... 181
APPENDIX E: Comprehensive Nutrient Management Plan Components of the Michigan
Agriculture Environmental Assurance Program (MAEAP) ........................................... 200
APPENDIX F: Phosphorus Index (Michigan Trial) ....................................................... 212
REFERENCES ............................................................................................................... 215

viii

Table 2.1:

Table 4.1:

Table 4.2:

Table 4.3:

Table 4.4:

Table 4.5:

Table 4.6:

Table 4.7:

Table 4.8:

Table 4.9:

LIST OF TABLES

Average Nutrient Values of Grow-Finish (40-250 pounds) Swine Manure... 20

MAEAP-Veriﬁed Producers and Operation Statistics .................................... 43
Operator Characteristics (Age, Education, and Experience) ........................... 44
Acreage for Interviewed Operations ................................................................ 46
Animal Units before Any Manure Sold and Net Animal Units ....................... 49
Animal Density ................................................................................................ 51
Operation Descriptors by First 3 Digits of the Zip Code. Averages ............... 53
Producers Motivation to Become MAEAP Verified ....................................... 55
Resources Used to Write and/or Implement the C NMP .................................. 58
Producer-Identiﬁed Barriers to Implementing Required CNMP Changes ...... 59

Table 4.10: Nutrient Removal (lb/unit of yield) by Several Michigan Field Crops ......... 60

Table 4.1 I: Perceived Environmental Outcomes Due to MAEAP Veriﬁcation .............. 63
Table 4.12: Opinion Statements ........................................................................................ 65
Table 5.1: Average Cost to Write the Comprehensive Nutrient Management Plan ......... 72
Table 5.2: Cost to Write the Comprehensive Nutrient Management Plan by Year .......... 73
Table 5.3: Amount ofTime to become MAEAP Veriﬁed ................................................ 74
Table 5.4: Managerial Changes made due to MAEAP Veriﬁcation ................................ 75
Table 5.5: Average Managerial Change Costs ................... V .............................................. 80
Table 5.6: Percent of Producers to Make Each Capital Investment Change, Average ..... 83
Table 5.7: Average Annual Producer Capital Investment Changes ................................. 85
Table 5.8: Annual Producer Capital Investment Changes Cost Over Time ..................... 86

ix

Table 5.9: Cost-Share Received Compared to Capital Investments Eligible for Cost-Share
................................................................................................................................... 89
Table 5.10: Annual Capital Investment Costs .................................................................. 90
Table 5.1 1: Total Cost-Share per Species, Operation Size, and Verification Categories. 91
Table 5.12: Total and Annual “Producer + Taxpayer” Costs to become MAEAP Veriﬁed
................................................................................................................................... 93
Table 5.13: Total and Annual Producer Average Costs to become MAEAP Veriﬁed ..... 95
Table 5.14: Average Annual Producer Cost per Animal Unit .......................................... 96
Table 5.15: Comparing Writing, Managerial, and Capital Costs of the Total Cost to
Become MAEAP Veriﬁed, Averages ....................................................................... 97
Table 5.16: MAEAP Veriﬁcation Costs per Animal Unit Using the 3-Digit Zip Codes . 99
Table 5.17: Annual Producer Veriﬁcation Costs as Related to Gross Farm Revenue 100
Table 6.1: Number of and Producer’s Cost per Animal Unit per Category Change ...... 107
Table 6.2: Change in Phosphorus Cropland Balance on 25 Operations due to MAEAP
Veriﬁcation ............................................................................................................. 1 13
Table 6.3: Average High Risk Operation P-Index Score ................................................ I 17
Table 6.4: Average Costs Affecting the P-Index Score on 12 High Risk Operations... 119
Table 6.5: Amount and Cost of Changes Made to Become MAEAP Veriﬁed .............. 120
Table 7.1: Costs to Become and Maintain MAEAP Veriﬁcation over Time ................. 131
Table 7.2: Producer’s Annual Changes and Costs made to Become MAEAP Veriﬁed. 134
Table 7.3: Percent of Producers that Identiﬁed Elements of Land Components as a

Barrier to Implementing the CNMP ....................................................................... 135

LIST OF FIGURES

Figure 5.1: Annual Producer Cost as a Percent of Gross Farm Revenue ....................... 102
Figure 7.2: Annual Societal and Producer Cost to Become and Maintain MAEAP
Veriﬁcation over Time ............................................................................................ 132
Figure 7.3: Annual Producer Cost per Animal Unit to Become and Maintain MAEAP
Veriﬁcation over Time ............................................................................................ 133
Figure 7.4: Number of Years to Become MAEAP Veriﬁed in Relation to the Percent of

Acres with a Soil Test Value Above 300 Pounds of Phosphorus per Acre ............ 136

xi

 

AF 0
AU.
CAFO
CNMP
CREP
CRP
CSP
EBI
ECOS
EPA
EQIP
GAAMPs
MAEAP
MARI
MDA
MDEQ
MSU
MSUE
N

N
NASS
NRCS
NREPA
NPDES
P

PPI

r
RUSLE
RUSLE2
TSP
USDA
USDL

KEY TO ACRONYMS

Animal Feeding Operation
Animal Unit
Concentrated Animal Feeding Operation

Comprehensive Nutrient Management Plan

Conservation Reserve Enhancement Program
Conservation Reserve Program

Conservation Security Program

Environmental Beneﬁts Index

Environmental Council of the States

Environmental Protection Agency

Environmental Quality Incentives Program

Generally Accepted Agricultural and Management Practices
Michigan Agriculture Environmental Assurance Program
Manure Application Risk Index

Michigan Department of Agriculture

Michigan Department of Environmental Quality
Michigan State University

Michigan State University Extension

Nitrogen

Sample Size

National Agriculture Statistics Service

Natural Resources Conservation Service

Natural Resources and Environmental Protection Act
National Pollutant Discharge Elimination System
Phosphorus

Producer Price Index

Correlation

Revised Universal Soil Loss Equation, Version 1
Revised Universal Soil Loss Equation, Version 2
Technical Service Provider

United States Department of Agriculture

United States Department of Labor [Bureau of Labor Statistics]

xii

Chapter 1: Introduction

1.1 Problem Statement

Nutrient management has become increasingly important for Michigan livestock
producers. During the last decade, animal feeding operations have become more
consolidated, specialized, and regionally concentrated (Martinez, 1999). This
consolidation and concentration has limited the availability of cropland on which to
spread manure. Recent scientiﬁc studies (e.g., Butler & Coale, 2005 and Das, et al.,
2004) have added to our understanding of the environmental impacts of erosion, runoff,
leaching, and excess nutrients that can come from manure spreading on insufﬁcient
acreage. There are farm practices that can reduce these environmental impacts, but they
all have associated costs. The challenge for producers is to reduce their operation‘s
environmental impact and to manage farm nutrients in an environmentally sound manner,
while at the same time maintaining economic viability.

In 1998, a voluntary program called the Michigan Agriculture Environmental
Assurance Program (MAEAP) was created using the systems approach. The MAEAP
livestock system (referred to in this document as MAEAP) was developed to assist
livestock producers with their nutrient management. The main policy vehicle of the
MAEAP has been the producers” development of a Comprehensive Nutrient Management
Plan (CNMP). The CNMP describes how the management and production practices,
equipment, and structures can be used on the farm operation for the production of
livestock and crops in an environmentally sound way. The objectives of a CNMP are to

protect soil and water quality, obtain beneﬁcial use from animal manure and organic by-

products, and minimize impacts to the environment and public health from animal
feeding operations (MDEQ, 2005).

MAEAP veriﬁcation occurs after the Michigan Department of Agriculture
(MDA) veriﬁes that the farm has an accurate and complete CNMP and that the producer
has implemented or will implement on schedule the pollution prevention practices or
improvements presented in the CNMP. To estimate the effectiveness of MAEAP in
pollution prevention, it is necessary to determine the environmental changes that have
resulted from MAEAP veriﬁcation on speciﬁc operations. To determine the ﬁnancial
impacts, it is necessary to understand the magnitude and incidence of speciﬁc costs
associated with record keeping, plan writing, managerial changes, and capital
investments related to implementing and maintaining MAEAP veriﬁcation.

Since the MAEAP’s inception, there have been three studies that relate to an
evaluation of the MAEAP or the cost of CNMP implementation. Patty Farrell of
Michigan State University evaluated the Farm-A-Syst in a report entitled, “An evaluation
of Michigan Groundwater Stewardship Program’s Residential Program, 2002." Farm-A-
Syst is a segment within the farmstead portion of MAEAP (Farrell, 2002). Farm-A-Syst
addresses groundwater stewardship and farmstead veriﬁcation, but not livestock and
manure management.

Another study was conducted by the United States Department of Agriculture,
Natural Resources Conservation Service (USDA-NRCS, 2003). This study, “Costs
Associated with Development and Implementation of Comprehensive Nutrient
Management Plans" encompassed the entire United States (USDA-NRCS, 2003).

Although the estimated costs of writing and implementing a CNMP were not speciﬁc to

Michigan, the study did give a baseline to compare where Michigan’s costs are relative to
the estimates of the Lake states (Michigan, Wisconsin, and Minnesota) and the rest of the
country. Not all costs included in this research were included in the USDA-NRCS study.

In 2005, Dr. Allen Krizek conducted a mail-survey titled “A Decade of Change in
Manure Management Practices in Michigan” (Krizek, 2005). Dr. Krizek’s study was, in
part, an updating of the Kevin Kirk (1995) study: “Manure Management Practices in
Michigan.” Krizek randomly selected dairy. swine. beef and poultry producers (N = 514);
he surveyed them in the spring of 2005 to determine what manure management practices
were used on their farms and what opinions they had about manure management issues
(Krizek. 2005). Dr. Krizek used the same question set developed for the present study to
observe his study participants’ opinions. Thus, the Krizek study can be an important
comparison for this present study’s results. Of the 514 questionnaires mailed, 245 were
completed and returned. Krizek’s noted his survey responses were biased in that the
sampling of non-respondents revealed they were producers that, on average, practiced
less environmental stewardship than did the respondents. Also, Krizek’s survey
respondents may or may not be involved with MAEAP. It is beneﬁcial to compare the
opinion section of Allen Krizek’s research to the present study‘s results to gain a better
understanding of how MAEAP participants differ from Krizek’s larger sample of
livestock producers that, 1) practice average to above average environmental stewardship
and. 2) who may or may not be involved with MAEAP.

This thesis research is original in that neither farm-level ﬁnancial, nor
environmental impacts associated with MAEAP veriﬁcation were undertaken by previous

evaluations. This thesis research should help to inform the agricultural industry and

governmental agencies about what costs are incurred by veriﬁed operators, what
environmental impact results from MAEAP participation, and what motivates livestock
producers to become veriﬁed in a voluntary, education-based program.

To carefully design this study, several steps were taken to ensure the most
important questions were asked during the personal interviews of the MAEAP-veriﬁed
livestock producers. The certiﬁed CNMP plan writers in Michigan were surveyed in the
fall of 2004, to capture more information on the changes a typical livestock producer
would make to his/her operation to fully implement his/her CNMP. In addition, MAEAP
program administrators were also consulted to obtain some background information on
MAEAP, the process of veriﬁcation. and common questions they received from livestock
producers seeking veriﬁcation.

Becoming MAEAP veriﬁed does several things for a livestock producer. First, it
initiates closer examination by the producer of their manure management practices
through the development of a C NMP. For example, when a CNMP is written for a farm,
the plan accounts for issues the livestock producer may not have considered earlier, such
as manure’s nutrient content, keeping clean water clean, or maintaining records of
applied manure. Second, after adopting the CNMP, those livestock producers who
follow the pollution prevention strategies laid out in the CNMP and/or follow the advice
of MAEAP’s educational programs may be able to reduce the risk of pollution
discharges, nuisance complaints. and lawsuits.

1.2 Objectives and Methods
The objectives of the present study were to identify costs and environmental

outcomes associated with becoming MAEAP veriﬁed and implementing a CNMP. These

objectives were accomplished by ﬁrst personally interviewing 29 MAEAP-veriﬁed
livestock producers on 31 operations. Then, the costs associated with becoming MAEAP
veriﬁed were calculated directly from the interview data. These costs included writing the
CNMP, capital investments', and management changesz. CNMP costs include the costs
of the plan writer and the hours the producer spent collecting the information.

The costs involved with capital investments and management changes were
reported by the livestock producer during the personal interview. These costs were then
annualized or reported as an actual total cost3, in 2004 dollars. The amount a producer
paid out-of-pocket was reported separately from the cost associated with the taxpayer
costs plus (+) private costs. The producer plus taxpayer costs included the costs that were
cost-shared, plus the costs the livestock producer paid out-of-pocket.

Some changes made on an operation associated with fully implementing the
CNMP have associated environmental outcomes such as less phosphorus runoff, keeping
clean water clean, or lowering the phosphorus rate applied to a ﬁeld. In assessing the
environmental outcomes, several factors were considered including: the farm’s proximity
to cold water trout streams, speciﬁc ﬁeld erosion potential, and ﬁeld phosphorus (P) soil
test results. The environmental outcomes were evaluated by considering the operation’s
cropland phosphorus mass balance and the P-Index score of ﬁelds. In addition,

producers’ motivations for becoming MAEAP veriﬁed as well as producers’

 

' Capital investments include equipment to spread manure, machines to transport manure, manure storage,
buildings, roofs, gutters, driveways/berms, drainage, buffers, and grass waterways.

2 Management changes include crop consultant/Technical Service Provider (TSP), manure spreading hours.
supervision hours, recordkeeping, commercial fertilizer purchased, equipment usage, fuel, energy/utilities,
insurance, manure sold, manure testing, soil testing, and feed rations.

3 The total management costs were reported as the present value of an annuity, while the capital investment
costs were listed simply as the actual total cost.

environmental attitudes were identiﬁed. Several survey questions were focused on the
barriers to implementing some of the CNMP strategies.

Ideally, evaluating MAEAP environmental outcomes and cost analysis should
occur using a “with and without” framework rather than a “before and after” framework.
The reason for using the “with and without” approach is that this framework holds
constant those variables that might influence outcomes, whereas the "before and after”
framework does not. For example. consider the phosphorus balance calculation, several
variables that may have inﬂuenced the "before and after” phosphorus balance changes
include regulation changes, additional education, input cost fluctuations (i.e., fuel, feed,
or labor), Environmental Quality Incentive Program (EQIP4) cost—share funding, or
technology advances. These variables are difficult to hold constant overtime for this
study, yet they could have altered the producers’ use of phosphorus or the phosphorus
balance. In addition, a livestock producer could have decided to not purchase a feed
additive because it is not cost shared, whereas manure storage can be cost shared. The
lower out-of—pocket cost perhaps influenced the livestock producer to make a capital
investment change instead of a managerial change. These decisions mean the ﬁnancial
costs calculated with a “with and without” accounting stance differs from the “before and
after” one. Nevertheless, a “before and after” framework will be used to proxy the with-
MAEAP veriﬁcation and without-MAEAP veriﬁcation context, because of difﬁculties of

identifying and estimating these other variables.

 

4 The Environmental Quality Incentives Program (EQIP) was re-authorized by the 2002 Farm Bill to: 1)
Promote agricultural production and environmental quality on private lands, on a voluntary basis using
local, State, tribal, and Federal partnerships to provide ﬂexible technical and ﬁnancial assistance when
complying with regulatory requirements. 2) Encourage environmental enhancement. 3) Stimulate
innovative approaches to leveraging the Federal investment in environmental enhancement and protection,
in conjunction with agricultural production through Conservation Innovation Grants. 4) Promote ground
and surface water conservation on agricultural operations (USDA-NRCS:EQIP, 2005).

There are two methods that will be used to compare the environmental impact of
MAEAP, a cropland phosphorus mass balance and the phosphorus index (P-Index). It
will be assumed that all strategies laid out in the CNMP were fully implemented. On all
surveyed operations in which a CNMP can be collected for this research, the phosphorus
mass balance calculation will be used to evaluate its environmental impact from
becoming MAEAP veriﬁed. The P-Index used for this research is a general P-Index,
developed by several nutrient management professionals in Michigan. The P-Index has
not been adopted by any Michigan governmental agency (i.e., MDA or NRCS) or
MAEAP, but will be a useful tool in determining the change in phosphorus source (e.g.,
commercial or manure phosphorus) and transport (i.e., due to buffers, setbacks, or cover
crops) within a ﬁeld before and after implementing the CNMP recommendations.

1.3 Research Propositions

The producers interviewed for this research were those who voluntarily became
MAEAP veriﬁed and voluntarily agreed to be interviewed. Because only producers who
had sought MAEAP veriﬁcation were interviewed, this study is not a representative
sample of all Michigan livestock producers. However, the Krizek study does provide
some comparisons of ﬁnding for MAEAP producers with his large group of respondents.

Each veriﬁed livestock farm had the same opportunity to become part of this
study as all eligible operations received the same information packet and personal
contact. At the time of the study, the total statistical universe of such producers was all
producers that were veriﬁed by December of 2004 (40) plus those that were scheduled for

2005 veriﬁcation (6).

Due to the small sample size, no formal hypothesis testing will occur. Therefore,
this study was guided by several propositions. Below are nine propositions related to the
motivation for becoming veriﬁed through the MAEAP, economics of becoming MAEAP
veriﬁed, and the environmental impacts of MAEAP-verified farms. The propositions are
accompanied by a brief explanation informing why each proposition is signiﬁcant to this
research.

Proposition 1: The earliest MAEAP adopters, (i.e., those operations verified
in 2002 and 2003) were implementing many of the pollution prevention practices a
CNMP requires prior to becoming veriﬁed, and thus are the low cost adopters.

This proposition assumes that there is a selection bias for voluntary programs.
That is, if all else is held constant. the low-cost adopters will adopt ﬁrst. It is much easier
to become veriﬁed if the farm already is practicing a majority of the CNMP-based
pollution prevention strategies.

A farm location with few changes might be more likely to become MAEAP
veriﬁed earlier, as the producer has an easier implementation schedule and fewer costs
associated with becoming MAEAP veriﬁed than the locations with many changes. Also,
if an operation has many ﬁxed assets that need to be altered, such as manure storage
structure or production barn, it is less likely that operator will seek MAEAP veriﬁcation,
unless the producer assumes he or she will receive adequate technical assistance and cost-

share by being a MAEAP participant.

Proposition 2: Liability risk and the potential for environmental regulation
motivate livestock producers to become MAEAP verified.

Research has shown that livestock producers who have signiﬁcant formal and
informal pressures for pollution prevention from the community are more likely to
pollute less (Alberini & Sergerson, 2002). Early adopters have more interaction with
local and external resources [such as Michigan State University Extension (MSUE) or
Michigan Farm Bureau employees], that strongly encourage the adoption of conservation
practices (Habron, 2004). In the last decade, local community members and the Sierra
Club have increasingly reported farms to the Michigan Department of Environmental
Quality (MDEQ) when the farms have had manure spills or discharges. This monitoring
and subsequent accountability has led to several livestock producers paying a ﬁne for
polluting ground or surface waters. Lawsuits and ﬁnes can be signiﬁcant incentives for
livestock producers to practice more pollution prevention (Srivastava, 2003).

If MAEAP’s voluntary approach fails, the Michigan agricultural industry faces
the threat of having only mandated regulation for environmental practices. Research
suggests that the threat of regulation provokes more livestock producers to participate in
abatement activities to ensure that the more costly mandatory policy is avoided (Alberini
& Sergerson, 2002).

Proposition 3: The costs of becoming MAEAP verified are not proportional
to the income of the farm.

Larger farms generally have been the more likely adopters of technology and
better able to afford technologies that involve substantial initial capital investment, due to

economies of scale (Feder et al., 1985). Farms with larger herds typically generate more

gross revenue than small farms (Wittenberg & Wolf, 2004). The costs associated with
implementing a CNMP in the USDA-NRCS study were greater for the large operations
than for small operations; however, the costs were estimated to be lower on a per animal
unit basis for the large operations (USDA-NRCS, 2003). Therefore, it is expected that a
greater percentage of CAFOs become MAEAP veriﬁed at a lower proportional cost
relative to the gross farm revenue of the AF Os.

Throughout this study, large and small/medium farms are delineated using
deﬁnitions for Concentrated Animal Feeding Operation (CAFO)5 and Animal Feeding
Operation (AFO), respectively. A CAFO is considered a large operation that
houses/produces more than 1,000 animal unitsb at one time. An AFO is deﬁned as a
small or medium operation that houses/produces less than a 1,000 animal units.

Proposition 4: When producers follow the implementation strategies in the
CNMP the result is new fixed assets that are larger than without MAEAP
verification or EQIP cost-share.

Livestock producers may expand their operations to spread the ﬁxed costs over
more animals. Permanent structures require a ﬁxed capital investment that typically is
not transferable in producing another product (species). If an operation did not have

enough manure storage, given the local weather conditions and/or available land for

 

5 CAFO (Concentrated Animal Feeding Operation) is defined by the EPA as a livestock operation that has
animals fed or maintained for a total of 45 or more days in any 12 month period within a place of
conﬁnement that does not sustain vegetation. To calculate 1,000 animal units, the following thresholds for
different animal species is used: 1,000 slaughter or feeder cattle; or 700 mature dairy cattle (whether
milking or dry cows); or 2,500 swine weighing over 55 pounds; or 500 horses; or 10,000 sheep or lambs; or
55,000 turkeys; or 100,000 laying hens or broilers when the facility has unlimited continuous ﬂow watering
systems; or 30,000 laying hens or broilers when facility has liquid manure handling system; or 1,000
animal units from a combination of slaughter steers and heifers, mature dairy cattle, swine over 55 pounds
and sheep (MDEQ, 2005).

6 One animal unit, for example, is the same as 1,000 chickens, 0.7 dairy cows, 1 beef steer, or 2.5 sows.

See Appendix A for more details.

10

spreading manure, MAEAP verification required more manure storage. A general (not
individual) NPDES permit did not allow any operation to have less than six months of
manure storage. The individual NPDES permit allows flexibility to meet the standards
established in the general NPDES permit. considering farm speciﬁc situations. See
Appendix B for more details regarding the general NPDES permit (MIG440000).
Anticipating future size needs, livestock producers that are contemplating future
expansion would be expected to make capital investment improvements at a larger size
than currently necessary. The expansion helps producers achieve economies of scale and
avoid building another structure in the future, if they add animal units for production.
EQIP cost-share funding will assist in financing manure storage. With the assistance of
EQIP cost-share livestock producers can build a larger structure for less money, rather
than implementing one smaller structure now and another smaller structure later in which
they may not receive EQIP cost-share funding. Thus, if the CNMP calls for enhanced
storage, a producer would be expected to build a larger than necessary manure storage
given the operations current livestock numbers.

Proposition 5: The amount of ﬁnancial assistance a livestock producer
receives is correlated positively with the increased amount of capital investments
implemented to prevent pollution.

Positive incentives from the government (i.e., EQIP cost-share funds for capital
investments) are available on a competitive basis. Natural Resources Conservation
Service (NRCS) requires a CNMP for producers to be eligible for cost-share; therefore
MAEAP veriﬁcation acts like certiﬁcation for NRCS. Financial assistance, such as

EQIP, motivates livestock producers to become MAEAP verified and implement capital

investment for pollution prevention strategies. Cost-share reduces the private costs of
abatement, thereby increasing the likelihood that private benefits exceed private costs.
The more capital investments a farm needs to make, the more pressure is put on the
operation’s ﬁnancial position. The financial consequences of becoming MAEAP veriﬁed
may entice livestock producers to seek more cost-share money.

Proposition 6: As MAEAP becomes more established and additional details
and regulations evolve, the average costs to become and maintain MAEAP
verification increase.

When the MAEAP began in 1998, there were few qualified persons that could
write Comprehensive Nutrient lVlanagement Plans (CNMPs) and agency staff had few
materials in place to ease implementing required changes. As plan writers and MAEAP
organizers gained experience, plans and implementation recommendations became more
consistent (Wilford, personal communication. October 2005). When demand for a plan
writer’s services increased and EQIP cost-share for writing CNMPs became more
frequent, C NMPs were no longer written for free and more standardized prices were set
for similar plans. Over time, MAEAP has become more organized, more plan writers
have experience, and the Environmental Protection Agency (EPA), NRCS, and MDEQ
have implemented supplementary policies and regulations. Certain details add to the
strength of the plan, but also increase the writing time, the price of a plan, and the
promptness in implementing required changes.

The time it takes to write a plan also is dependent upon the environmental
practices currently in place on the farm, records previously maintained by the livestock

producer. and farm size. As more livestock producers have their farms MAEAP veriﬁed,

there is a wider variety of operation sizes, detail of records, and environmental conditions
of the operations participating. A broader range of costs associated with developing each
farm’s nutrient management plan and implementing various management and capital
investment changes is expected.

Plan writers may increase their fees over time due to an increase in demand,
increase in certiﬁcation and education requirements, and additional liability insurance.
However, it also is expected that the price of a CNMP will not deviate greatly from what
EQIP will cost-share to have a plan written. The CNMP plan writer would be expected to
reap the benefits of the cost-share dollars by charging at least the minimum price of what
EQIP cost-share will pay. However. the livestock producer does have the option to seek
another plan writer, ask the NRCS to write the CNMP as they contract the plans to a plan
writer with a price cap, or the producers may do more work themselves.

Proposition 7: Most CN MP changes required for MAEAP verification are
linked to management practices rather than capital investments.

Even with the broad range of farms becoming MAEAP veriﬁed, nearly all farms
may need to make changes to management practices; only some farms may be required to
make capital investments. The management changes, such as manure spreading method
and location. recording manure nutrient composition, and manure and soil testing,
changing rations, and commercial fertilizer applications likely outnumber the amount of
capital investments an operator could establish. Research suggests that capital
investment changes typically are easy to identify and thus, will be adopted ﬁrst (Habron,
2004); however, altering an operations” management practices can increase the

producer’s knowledge of the farm, allowing him/her to capitalize on opportunities he/she

l3

might have otherwise overlooked (e.g., additional soil and manure testing could lead to
proper nutrient application rates). Many of the requirements within the CNMP entail
more time to manage the farm even though an operator cannot collect EQIP cost-share
for these managerial changes.

Proposition 8: The largest barrier to becoming MAEAP veriﬁed is the
proximity to suitable, available cropland to spread manure.

Due to the density of animal and human population, crop rotation, and distance to
freshwater, it may be difﬁcult to ensure enough cropland is available for Michigan
livestock producers on which to spread manure. There are several factors that limit an
operator’s access to acreage acceptable for manure spreading.

1. Animal density. This factor. animal density, not only accounts for the animal

 

density on a livestock producers cropland. but also the animal density of that particular
vicinity. Areas that have a large animal density have less cropland available for manure
application as their farming neighbors are more likely to have animals themselves,
leaving fewer extra acres available. The more manure that is spread on the cropland,
ceteris paribus, the higher the nutrient content of the soil and the less manure a livestock
producer can spread before it reaches the soils carrying capacity. Exceeding this capacity
increases the risk of pollution.

2. Population density. The denser the human population, the more acreage is
unavailable for agriculture. A dense population also indicates that more agriculture land
lies on the urban fringe, limiting the days and times to spread manure due to odor
concerns. With a large population encroaching on the rural and suburban areas, there are

more new homes located in or near ﬁelds that receive manure. The denser populated

14

rural areas may have more people unacquainted with livestock production that may have
a larger concern for air quality and odor. Leaving more space around adjacent homes,
free from manure spreading, creates less space and adds more time constraints for
livestock producers to spread manure.

3. Soil testing over 150 pounds per acre (75 parts per million) of phosphorus. In
Michigan, if an Operator takes soil samples. P content will be expressed via lab analysis
as Bray P1 or Mehlich-3 (results are in pounds of P, while recommendations are given in
pounds of P205 per acre). According to GAAIV’IPS, ifa ﬁeld has soil test results over 300
pounds of P per acre, (150 parts per million (ppm)), then phosphorus from any source
cannot be spread on the field (MDA: Right to Farm, 2004). Fields with phosphorus
levels between 150 and 299 pounds of P per acre (75 and 149 ppm) can have phosphorus
applied equal to or less than crop removal rates. Fields with levels below 150 pounds of
P per acre (75 ppm) can have manure spread based on nitrogen recommendations
(Sharpley, et al., 2003).

The most common fields with an excess of phosphorus are likely to be those
ﬁelds closest to the livestock housing and manure storage facilities and with a history of
vegetables or root cr0ps, such as peppers, potatoes, or sugar beets in the crop rotation. If
livestock producers did not correctly account for manure’s nutrient content, the ﬁelds
closest to the livestock housing and storage facilities will become much higher in
phosphorus than other ﬁelds on the farm. It costs less, and is less time consuming, to
spread manure closest to the production site. Accounting for plant uptake of nutrients
correctly is also a concern. When growing vegetables and root crops (e.g., potatoes)

more phosphorus is applied than to say, corn. beans, and wheat because phosphorus

enhances root growth and these crops require more P. If root crops are in the livestock
producer’s planting rotation, more inorganic and commercial phosphorus is likely to be
over-applied relative to crop needs and more phosphorus will remain in the soil for either
the next crop rotation or be displaced by soil erosion. When soil tests indicate higher
phosphorus levels, the cr0p producer has more restrictions on where to spread manure in
order to follow the agronomic rates described in a CNMP. Agronomic rates are set to
reach a yield goal with the optimal amount of nutrients to prevent over-application and
ultimately nutrient runoff and leaching.

4. Proximity to water. h'lichigan is surrounded by four of the five Great Lakes.

 

With 37 watersheds in the Lower Peninsula. many Michigan farms have a river or lake
near their farm (MDEQ, 2005). To become MAEAP veriﬁed, a setback or buffer strip
along all bodies of water must be accounted for when surface spreading manure (injected
manure does not need a setback). A setback or buffer strip may vary in depth and length
depending on the erosion variables (e.g., proximity to ground water, ﬁeld slope, and soil
type) in the ﬁeld, but a consequence is that the amount of available land to spread manure
is decreased.

Proposition 9: More manure is spread according to agronomic needs after a
farm becomes MAEAP veriﬁed than before veriﬁcation.

Some livestock producers spread more manure in close proximity to the livestock
production site, not using the manure for its nutrients, but spreading where it is most
convenient. Applying fertilizer at a rate above that which is required is not an
environmentally sound practice. After a farm becomes MAEAP veriﬁed, the livestock

producer is required to follow the agronomic rates described by the farm’s CNMP. The

16

CNMP is designed to follow scientiﬁc recommendations with regard to application rates,
land conservation practices, and manure storage capacity.
>l< * ’1!

To explore the validity of these nine propositions, data were analyzed from the
producer interviews and the C NM Ps collected from the producers. The ﬁnancial analysis
was conducted using primarily the interview data, while the environmental component
was analyzed using the information within the CNMPs with help from both the Institute
of Water Research at MSU and the MSU Extension in Calhoun County.

1.4 Thesis Organization

The thesis is divided into eight chapters. Chapter 2 provides a general background
about the MAEAP’s history and organization, and steps for veriﬁcation, and an
explanation of the CNMP. Chapter 3 presents the survey design and methods. The
interview ﬁndings are within Chapter 4, which includes discussions on the type of
operations and operators that became MAEAP veriﬁed, the opinion statement results, and
what barriers the operator incurred when seeking veriﬁcation. Chapter 5 gives details
about the ﬁnancial impacts and includes correlations and operator discussion. Chapter 6
explains the results from the phosphorus mass balance and the P-Index. Chapter 7
summarizes the data as they relate to the nine propositions. The last chapter discusses the
ﬁnancial, environmental, and policy implications of the MAEAP and also discusses the

limitations of the study and further research that should be conducted.

Chapter 2: Michigan Agriculture Environmental Assurance Program

2.1 Introduction

An evaluation of MAEAP is assisted by an appreciation of the background, goals,
and steps required of the livestock operators to become MAEAP veriﬁed. The Michigan
Agriculture Environmental Assurance Program Livestock System is a voluntary program
open to any Michigan livestock producer. regardless of size, who agrees to the adoption
and veriﬁcation of specific management practices as part of the CNMP. MAEAP
requirements are designed so that a veriﬁed farm following the CNMP should be
operating in accordance with the Right to Farm Act7, Natural Resource and
Environmental Protection Act (NREPA)8, and the Michigan Groundwater Stewardship
Programg. Also, the producer is required to have an Emergency Action Plan in the event
of a manure spill. An important vehicle to accomplish these objectives is the CNMP.
The intention of the MAEAP is to reduce environmental and legal risks for Michigan
farm operations. An additional attribute is that MAEAP may give some animal feeding

operation (AFO) owners an alternative to government required permits.

 

7 The Michigan Right to Farm Act, P.A. 93, was enacted in 1981 to provide producers who follow its
guidelines and practices with protection from nuisance lawsuits. This state statute authorizes the Michigan
Commission of Agriculture to develop and adopt Generally Accepted Agricultural and Management
Practices (GAAMPs) for farm operations in Michigan. (MDA: Right to Farm, 2004).

Natural Resource and Environmental Protection Act (NREPA) has a dual purpose: to protect water

quality and to regulate waste disposal, controlling pollution in any water, including ground and surface
water (MDA: NREPA, 2004).
9 Michigan Groundwater Stewardship Program’s main objective is to provide information and assessment
tools for pesticide and nitrogen fertilizer users help them identify risks to groundwater associated with their
pesticide and nitrogen fertilizer use practices and to coordinate local, state, and federal resources to help
individuals reduce those risks (MDA: Groundwater Stewardship Program, 2005).

I8

2.2 Phosphorus in Manure, on Cropland, and in Water

The MAEAP should reduce a livestock producer’s environmental and legal risks
because the risk of a pollution dischargelo should be decreased. Michigan livestock
producers may be at risk of having an animal manure discharge into surface and ground
waters, if manure is improperly stored or applied. To help alleviate improper manure
management, the Right to Farm Act identiﬁes and explains the Generally Accepted
Agricultural Management Practices (GAAiVlPs). These voluntary practices provide
uniform statewide standards and are supposed to be based on available technology and
knowledge from scientiﬁc research to identify sound environmental stewardship.
GAAMPs also are referenced in Michigan‘s Natural Resources and Environmental
Protection Act (NREPA), Public Act 451 of 1994, as amended. NREPA is intended to
protect the waters of the state from the release of pollutants in quantities and/or
concentrations that violate established water quality standards (MDA: NREPA, 2004).
The illegal release of pollutants into surface and ground waters from agriculture most
commonly occurs through ﬁeld runoff(\llv’eld, et al., 2001).

Applying manure to fields for crop production and recycling of nutrients can be
an important component of manure management. Agronomists have recognized
manure’s benefits for many years; in 1910. S. W. Fletcher published, "When incorporated
with the soil, manure greatly improves the texture. loosening a heavy compact soil and
binding together a light leachy one: making the soil more crumbly, warmer, more

retentive of moisture, and more conducive to plant growth” (F letcher, 1910). Nutrient

 

'0 A discharge is the release of nutrients. pathogens, manure or polluted storm water into surface waters of
the state (MDEQ, 2005). Waters ofthe state include county drains, ditches, streams, creeks, rivers,
wetlands, lakes and ponds.

l9

recycling can be an agronomic and environmentally sound practice for both short and
long term sustainability of the land.

Manure’s composition. of all livestock species contains a greater amount of
phosphorus, relative to nitrogen. than most plants require. Thus, phosphorus can build up
in the soil, if manure application rates are based solely on the plant‘s nitrogen needs. The
excess nitrogen and phosphorus in or on the soil are potential water pollutants. For
example, to produce 140 bushel of corn per acre, the corn plants will use 126 pounds of
nitrogen and 50.05 pounds of P205 (phosphate) or 22.02 pounds of elemental phosphorus
(P) (Christenson, et al., 1992). If a producer uses liquid manure from a swine
growing/ﬁnishing operation (hogs 40 to 250 pounds) as the nutrient source, the manure
may have a ratio ofN to P305 of 1.6 to 1.0 (Table 2.1). Ifthe manure is spread according
to the nitrogen needs, then an extra 28.7 pounds of phosphate, over the corn crop needs,

will be spread on each acre.

Table 2.1: Average Nutrient Values of G row-Finish (40-250 pounds) Swine Manure

 

 

 

 

 

 

 

 

Grow-Finish Swine N P205
Pounds
Pounds per day produced 0.08 0.05
'MWPS-IS Manure Nﬁmagement Systems Series. December 20 (i

 

If the soil tests indicate that the soil phosphorus level is below 150 pounds of P
per acre (75 ppm), the crop can have manure applied in accordance to the nitrogen needs
of the crop. If the soil tests indicate the soil phosphorus is at or above 150 pounds of P
per acre (75 ppm), then to prevent phosphorus build up, the manure should be spread in
accordance with the phosphorus needs of the plant (MDA: Right to Farm, 2004).

Additional nitrogen can be applied to the corn crop using commercial fertilizers. This

restriction is particularly important to reduce the risk of P runoff because phosphorus as a
pollutant is a major problem in fresh water bodies (Sharpley, Gburek, Folmar, & Pionke,
1999)

With manure’s extra phosphorus content relative to nitrogen for crop needs, the
state’s numerous watersheds, and farms’ proximity to fresh water bodies, the primary
nutrient of concern for water pollution in Michigan is phosphorus (P). Phosphorus
generally is considered the limiting nutrient in freshwater systems because an increase of
phosphorus increases the rate of eutrophication (Harper, 1992). Eutrophication is the
process by which a body of water becomes enriched in dissolved nutrients that stimulate
the growth of aquatic plant life, usually resulting in the depletion of dissolved oxygen
(Merrium-Webster, 2000). Sufﬁcient dissolved oxygen in fresh water is essential and
critical for aquatic animals to live. Human and wildlife concerns associated with
eutrophication include repulsive taste and odor in drinking water, impairment of waters
for recreation and industry. and toxicity to humans, fish, and livestock (Gitau, Gburek, &
Jarrett, 2005). Water bodies impaired due to excess phosphorus are costly and difﬁcult to
restore and may take many years to recover (Srivastava, 2003). The movement of
phosphorus in runoff from agricultural land to surface water can cause and/or accelerate
eutrophication.

2.3 Development of MAEAP
In 1998, the MAEAP was formally created from the Michigan Agricultural

Pollution Prevention Strategy’sll recommendation to assist agricultural producers with

 

” Michigan Agricultural Pollution Prevention Strategy was formulated by Michigan Department of
Agriculture, Michigan Department of Environmental Quality, and Agricultural Industry Group
representatives. They amended the Pollution Prevention Strategy for Michigan Agriculture in October 1997
to include provisions for identifying and implementing new agricultural pollution prevention activities.

71

.—

nutrient management. The structure, guidelines, and goals of MAEAP were designed by
multiple Michigan industry, university. and governmental agencies to assist livestock
producers with their nutrient management. This partnership was to ensure that all
viewpoints were considered in setting guidelines. Initially, there were 17 partners[2 in
MAEAP. In the last several years. eight more industry partners have joined MAEAP.
The Environmental Protection Agency (EPA) and the Michigan Department of
Environmental Quality (MDEQ) worked together to develop an innovative regulatory
agreement that included the MDA. This agreement, often called the Environmental
Council of the States (ECOS)l3 Agreement. gave the state of Michigan the opportunity to
implement its own pollution prevention program from December 2002 until December
2007. The agreement still obliges the MDEQ to conduct proactive inspections on all
CAF Os and pursue compliance and enforcement actions on all facilities with a discharge.
Although MAEAP reduces environmental and legal risks for veriﬁed farm operations, a
livestock producer must apply for a National Pollutant Discharge Elimination System
(NPDES) permit from the MDEQ if 1) meet specific size criterion, or 2) are of any size

and have had a regulated discharge since 2000. whether or not they are MAEAP veriﬁed.

 

’3 Current MAEAP partners include: Institute of Water Research, Michigan Agri-Business Association,
Michigan Allied Poultry Industries, Inc., Michigan Association of Conservation Districts, Michigan
Aquaculture Association, Michigan Cattleman's Association, Michigan Cherry Marketing Institute,
Michigan Corn Growers Association, Michigan Department of Agriculture, Michigan Department of
Environmental Quality. Michigan Farm Bureau, Michigan Farm Radio Network, Michigan Integrated Food
and Farming Systems, Michigan Milk Producers Association, Michigan Nursery and Landscape
Association, Michigan Pork Producers Association. Michigan Potato Commission, Michigan State
University, Michigan Soybean Promotion Committee. Michigan Township Association, Michigan United
Conservation C lubs, MSU Extension, and USDA/Natural Resources Conservation Service.

The Environmental Council ofthe States (ECOS) is the national non-proﬁt, non-partisan association of
state and territorial environmental agency leaders. The ECOS mission is to improve the US environment by
advocating the role of states’ environmental management, providing information exchange among states,
fostering cooperation and coordination in environmental management, and articulating state positions to
Congress. federal agencies, and the public on environmental issues. The agreement between the EPA and
the Michigan Department of Environmental Quality (MDEQ) allows MAEAP to improve water quality
without mandated permit through 2007.

2.4 Regulations Relevant to MAEAP

To alleviate some of the ﬁnancial implications of developing and implementing a
CNMP, the 2002 Farm Bill allowed the USDA-NRC S fewer restrictions when dispensing
EQIP funded cost-share to livestock producers. EQIP cost-share funds required a CNMP
for payment. but EQIP funds also assisted the producers in developing their farm-specific
CNMP (USDA-NRCS, 2002). 1\/'Iichigan governmental and agency ofﬁcials desired to
have only one CNMP for consistency to meet EQIP, MAEAP, and permit standards.
Therefore, Wickey, of USDA-NRCS comments repeatedly that Michigan’s CNMP
requirements often “meet or exceed regulatory requirements” of other states (Rector,
personal communication, December. 2005).

Regulations enacted by the EPA in 2003. as well as state regulations, require all
new CAFOs, livestock operations expanding by at least 1,000 animal units, or an
operation of any size that has had a discharge, to meet new, more detailed and speciﬁc
standards. By September 2005, existing (as opposed to new) Michigan CAFOs (over
1,000 animal units), who have not had a regulated discharge since 2000, had to have a
signed letter of intent to either obtain MAEAP veriﬁcation or a National Pollutant
Discharge Elimination System (NPDES) permit within one year of receipt of the letter of
intent. All CAFOs with MAEAP letters of intent must be veriﬁed by September 1, 2006.
After July I, 2007, all CAFOs will be required to have an NPDES permit regardless of a
farm’s past environmental history or prior MAEAP veriﬁcation (MDEQ, 2005). Small
and medium operations (less than 1.000 animal units) are not affected by the new

regulations, if they have not had a discharge.

[J
a)

These new regulations assisted Michigan in reaching more livestock producers
and helped to ensure that the largest operations were practicing pollution prevention.
However, the EPA’s NPDES permit system may be less attractive to livestock producers
than MAEAP in the short run due to the permit’s application and annual fees and publicly
accessible CNMPs. In the long run given current regulations, CAFOs do not have a
choice whether they will purchase an NPDES permit. MAEAP’s voluntary approach
generates a cost savings due to the absence of an application and annual fee, and is a
viable, acceptable alternative to the Nl’DliS permit system for all farms until July I, 2007
and for AFOs perpetually, if the AFO does not have a reported pollution discharge
(MDEQ, 2005), assuming no further changes in regulations. MAEAP also allows
livestock producers to apply for special low interest loans, lower liability insurance
premiums, and species speciﬁc scholarships that an NPDES permit does not offer.

2.5 Structure of MAEAP

MAEAP is a voluntary program designed to reduce producers’ legal and
environmental risks by increasing awareness of environmental regulation, knowledge of
nutrient management, and ensuring documentation and implementation of nutrient
management practices. The lleleP-verilied producers have an opportunity to take
advantage of other farm managers’. MAEAP agency staffs, and CNMP writer’s
expertise to help “minimize [manure] waste and maximize [nutrient] resource use”
(Rector, personal communication. September 2005). The MAEAP’s stated mission is: To
deveIOp and promote a recognized, voluntary, proactive environmental assurance

program. targeted to the agricultural industry. which ensures that producers are engaging

in cost-effective pollution prevention practices and are in compliance with environmental
regulations (“Exec Summary,” 2005).

MAEAP is a three-system, three-phase program. Each system covers a different
aspect of the farm: livestock, farmstead, and cropping. The livestock system was the ﬁrst
to be completed by MAEAP designers and will be the focus of this research. When all
three systems are veriﬁed within a farm. the intent is to assure the entire farm has a
reduced environmental pollution and legal risk (“Producers can minimize,” 2001).
MAEAP has attempted to achieve its seven goals on farms that are MAEAP veriﬁed.
The seven goals MAEAP seeks to accomplish are the following:

1. Solving environmental pollution problems;

2. Preventing pollution at its source;

3. Maintaining and enhancing natural resources;

4. Monitoring and recording changes in producers management practices;

5. Providing incentives for participation;

6. Encouraging sharing of technological information;

7. Rewarding accomplishment through award recognition (“‘Exec. Summary,”

2005)

The three phases of the MAEAP livestock system are: 1) education; 2) on-farm
risk assessment through an Operation-speciﬁc Comprehensive Nutrient Management Plan
(CNMP); and, 3) third-party veriﬁcation using an on-farm inspection. When a farm
completes all three phases for a specific system, e.g., the livestock system, the farm is

then a (livestock) veriﬁed MAEAP farm and an “environmentally assured” operation.

I.)
'JI

The education phase of l\/1AEAP is to help raise the awareness of the diverse
practices that may help prevent or reduce legal and environmental risks for the farm.
There are educational meetings conducted jointly by MAEAP partners held throughout
the state, multiple times a year. Producers are provided information about the three
MAEAP systems, as well as state and federal environmental rules and regulations.
Michigan’s Right to Farm Act is brieﬂy reviewed, emphasizing GAAMPs. Upon
completion of the education phase, producers should be equipped with the necessary
information to begin organizing their own C.\l MP.

The second phase includes the development of a Comprehensive Nutrient
Management Plan (CNMP). 'I‘he CNMP is a farm-speciﬁc planning tool that seeks to
assure the livestock producer is complying with NRCS CNMP standards, MDEQ
regulatory requirements, as well as the manure and nutrient management GAAMPs that
were established by the MDA in 1988 and 1993. The compiling of information for the
CNMP also assists livestock producers in documenting the conservation practices and
management decisions made on the farm regarding the use of commercial fertilizers and
manure nutrients. The CNMP allows livestock producers to work directly with qualiﬁed
professionals certiﬁed by the USDA Natural Resource Conservation Service (NRCS),
Technical Service Providers (TSP). These 'I‘SPs assist the producer in identifying high-
risk areas on the farm and develop a plan to address the potential environmental issues.

Once the CNMP is written and the recommended changes are implemented, the
farm has an on-farm inspection to become MAEAP veriﬁed. Third-party veriﬁcation,
conducted by the Michigan Department of Agriculture (MDA), occurs when the farm has

developed a CNMP that has been approved by a technical service provider (TSP) and the

26

operator states that he/she is implementing the pollution prevention practices or
improvements according to the schedule of implementation speciﬁed in the CNMP.

Maintaining MAEAP veriﬁcation is a part of the monitoring strategy. Livestock
producers must have an updated CNMP and application records to continue MDA
approval via an on-farm visit every three years. The ﬁrst year for the MDA to conduct
maintenance visits was 2005. The operator of the veriﬁed farm also needs to attend at
least one MAEAP educational meeting over the course of the farm’s veriﬁcation.

2.6 Comprehensive Nutrient Management Plan

Developing and maintaining the CNMP is critical to MAEAP veriﬁcation.
Appendix E (Comprehensive Nutrient Management Plan Components of the Michigan
Agriculture Environmental Assurance Program (MAEAP)) explains the necessary
components of the CNMP with a detailed description of each component. However, the
livestock producer does not need to personally write the plan in its entirety, or at all. If a
producer personally writes the CNMP, a certiﬁed plan writer must, at a minimum,
approve the CNMP. The plan writer’s signature ensures the CNMP incorporated all the
details of the necessary components.

The length of time it takes a TSP or livestock producer to write a Comprehensive
Nutrient Management Plan is variable and depends on several factors. Information
collected from a survey of plan writers (see Appendix C) indicated that the most common
factors affecting the length of time it takes to write the CNMP is the number of operated
acres, the number of animal units, and the livestock producer’s past environmental (e.g.,
soil and manure testing), as well as record keeping practices. Some areas on the farm that

pose an environmental risk and need to be changed may require an engineer’s input.

27

Items such as manure storage design and/or evaluation and barnyard runoff frequently
need an engineer’s perspective, which prolongs the completion of the CNMP and
increases the expense. In the past, most livestock producers have not kept records of the
P content of the manure and the rates and location where each load of manure was
spread. If these records and soil samples are up-to-date, the CNMP can be written more
quickly.

After the CNMP is written, the livestock producer keeps the CNMP on the farm.
The farmer is supposed to update the plan frequently with manure storage and spreading
information. A plan writer needs to update the soil tests, manure tests and rates, and
overall CNMP at least every three years.
2.7 MAEAP-Veriﬁed Farms

Once an operation becomes MAEAP veriﬁed, in any system, the producer
receives an ofﬁcial certiﬁcate and the opportunity to purchase a sign to place near the
farm entrance identifying the farm as a MAEAP-veriﬁed farm. A livestock producer that
becomes MAEAP veriﬁed also has the opportunity to use the Small Business Pollution
Prevention Loan Program, which provides loans at a rate of ﬁve percent or less
(“Producers can minimize,” 2001). In addition, a lower liability insurance premitun may
be available to those operations that have their liability insurance with some speciﬁc
companies. For example, Michigan Farm Bureau Insurance gives livestock producers a
10 percent credit on a farm’s base liability premium, if the operation has at least one
system (Livestock, Farmstead, or Cropping) of the farm MAEAP veriﬁed (Wheaten &

Atherton, 2005).

28

As of January 1, 2005, there were over 60 livestock MAEAP-veriﬁed farms,
several thousand producers had attended a MAEAP Phase I meeting, and 51 CAP Os and
109 AFOs had begun the second and third phases of the 3-phase process. The total
number of livestock MAEAP-veriﬁed farms more than tripled in 2004, increasing from
19 to 63. Many operations that began their CNMPs in 2002, took a few years to
complete their CNMP and thus, many were completed during 2004. The increase in
veriﬁed operations was also due to changes in regulations, requiring CAFOs to have
either signed a letter of intent to begin MAEAP veriﬁcation or obtain an NPDES permit
by September 1, 2005.

2.8 Chapter Summary

MAEAP is designed to educate producers about nutrient management in order
that they become better stewards of the land. Through veriﬁcation of a farm, MAEAP
enables the producer to understand changes needed to follow Michigan Right to Farm,
the Michigan Groundwater Stewardship Program, and NREPA guidelines. As of January
1, 2005, MAEAP has assisted about 40 producers in complying with a multitude of state
and federal regulations through the development of a CNMP representing 63 operations
that have become MAEAP veriﬁed. The intent of MAEAP veriﬁcation is to conﬁrm that
soil and water resource concerns have been appropriately addressed, that Right to Farm
GAAMPs are being followed, and that practices comply with state and federal
environmental regulations and until January 1, 2008 give some livestock producers who
are CAF Os which have not had a manure discharge an alternative to the government

permits (N PDES permits).

29

Chapter 3: Interview Methods

3.1 Introduction

The potential effectiveness of MAEAP to reduce the risk of environmental
pollution depended on three factors: 1) the number of livestock producers that
participated; 2) the level of pollution prevention practices undertaken by each livestock
producer; and, 3) the impact that the adopted practices have on the environment. To
determine MAEAP’s value, 29 livestock producers involved in the MAEAP were
personally interviewed and their CNMPs were collected. The interviews and the CNMP
were used to assess: 1) producer’s motivation for veriﬁcation; 2) their attitudes towards
the environment, MAEAP, and regulations; 3) the total number of animal units and acres
used for manure application; 4) the costs associated with becoming MAEAP veriﬁed; 5)
producer’s perception of what environmental impacts occurred due to veriﬁcation; 6)
producer’s farm’s cropland phosphorus mass balance; and, 7) the farms’ average
phosphorus index.
3.2 Designing the Interview Instrument

Before beginning the interview process and ﬁnalizing the interview questionnaire,
certiﬁed Michigan plan writers were surveyed, the producer questionnaire was pre-tested
and peer-reviewed, and MAEAP administrators reviewed the document. The 26 certiﬁed
CNMP plan writers were surveyed via a mail survey in the fall of 2004 with a 54 percent
response rate. Useful information was obtained to evaluate what pricing schemes were
often used to set the CNMP price, changes typically administered due to the MAEAP
veriﬁcation, and cost expenditures and savings realized from fully adopting the CNMP

schedule of implementation. The information gathered from this plan writer survey

30

added to the breadth and depth of questions asked of the livestock producers. A brief
description of the plan writers’ survey results, the cover letter, and the mail survey used,
can be found in Appendix C.

After the plan writer’s results were represented, the questionnaire was given to
several MAEAP and non-MAEAP livestock producers as a pre-test, which resulted in an
improved set of interview questions. Some MAEAP program administrators“ also were
consulted to determine the most accurate and understandable vocabulary, details of the
CNMP, and particular cropping and spreading methods used by livestock producers. The
ﬁnalized list of interview questions can be found in Appendix D “MAEAP Adoption
Producer Interview Cover Letter, FAQ Page, and Questionnaire”.

The interview questions included both closed and open-ended questions that
encompassed seven subjects (farm status, the CNMP, farm characteristics and changes,
managerial and capital changes, opinions, environmental impacts, and operator
characteristics). The seven subjects reﬂected explanatory factors frequently identiﬁed in
adoption rationale, costs of implementing and maintaining veriﬁcation, and
environmental impacts attained through voluntary programs. These subjects also
addressed the nine propositions.

3.2.1 Design and Objectives

Each personal interview was designed to allow the livestock producers to expand
on any issues they wanted, or to criticize or compliment MAEAP administrators and
implementers. Each producer was given a copy of the interview questions so he/she

could read, as well as listen to each question. The seven sections of the interview were

 

" Jan Wilford, MDA; Natalie Rector, MSUE; and Rhonda Wuycheck, MDEQ were the main
administrators that gave input for the interview layout and question design.

31

strategically placed; the personal information and opinion questions were asked towards
the end of the interview to allow time for trust to build between the livestock producer
and the interviewer before replying to the more sensitive inquiries.

3.2.2 Population and Sampling Method

The ﬁnal interview pool was determined by selecting all livestock producers that
were MAEAP veriﬁed by September 1, 2004, and those farms awaiting veriﬁcation
through an on-farm visit in 2005. The pool was expanded to also include the operations
that were veriﬁed in late fall of 2004. An information packet was mailed to each of the 46
producers, 36 on December 15, 2004 and a 10 on January 31, 2005. All 46 interview
packets included a cover letter, a frequently-asked-questions page that outlined what was
expected of the participants, what they would receive in return for their participation in
the interview, and a letter of support from the Michigan Department of Agriculture
(MDA) (Appendix D). MDA was deemed a respected agricultural organization that
many livestock producers trust. MDA’s letter of support was considered necessary to
ensure the producer believed the interview was credible and that their conversation would
be useful and necessary for the study. After the letters were mailed, personal phone calls
were made to each livestock producer to set up an on-farm interview.

Personal interviews were conducted from late December 2004 through February
2005. The study focused on the nine research propositions discussed in Chapter 1 to
draw policy, ﬁnancial, educational, and risk implications for livestock producers involved
with MAEAP. The interviews were informal and took place at the livestock producer’s

farm to ensure a convenient and comfortable atmosphere.

32

The interviews lasted from 1 to 3 hours and the livestock producers were paid $50
for their participation. The livestock producer received an additional $100 if they agreed
to submit a copy of their CNMP to the interviewer. The copies of the CNMP were
returned to the producer upon the completion of the research. Copies of the CNMPs were
acquired from 25 producers, as some producers declined to offer their CNMP for further
analysis. Information within the CNMP added to the detail and accuracy of the interview
responses, while also providing data regarding ﬁeld speciﬁc information, soil types, crop
rotations, slopes, cover crops, and Manure Application Risk Index15 (MARI) results.

3.3 Data Analysis

The information from the personal interviews was assembled and averages,
standard deviations, ranges, and correlations were calculated using the Windows’ Excel
package. Statistical analysis was conducted to compare data between beef, dairy, poultry,
and swine, CAFOs and AFOs, and in aggregate. The analysis used was appropriate as
the objective of the research was to understand the pattern of relationships between the
results, but not to explain the total variance. The small sampling size prevented
signiﬁcant regressions and formal hypothesis testing from being conducted.

3.3.1 Standardizing the Data

To better compare information between operation size and species, the animals
units were standardized. Animal units are an accepted method used to compare size of

operation between species. Following the Permit MIG 010000 (MDEQ, 2005)

 

'5 MARI evaluates ﬁelds for winter spreading of manure using 12 weighted ﬁeld factors, including soil
groups, soil test P value, concentrated water ﬂow, vegetative buffer width, and manure application rates
and methods. MARI is a tool used by the NRCS that is required by MAEAP to ensure consistency between
MAEAP and the NRCS. Recently, the MARI is referenced as an option in Michigan as a part of the state-
recognized Generally Accepted Agricultural Management Practices (GAAMP). MARI assists in
determining whether the level of environmental risk associated with manure applications is acceptable.

33

calculation, animal units were calculated for this study with a value based on the number
of “noses counted within each animal category”, instead of by earlier calculations of the
estimated animal weight divided by 1,000. For example, a mature (milking or dry) dairy
cow was given a standard weight of 1,400 pounds, which meant each dairy cow
represented 1.4 animal units. Refer to Appendix A (Calculating Animal Units: Permit
MIG 010000 Compared to General Permit MIG 440000) for a comparison of the two
methods to calculate animal units. As both methods are currently used throughout the
state, the CNMPs within this study reported animal units via both methods. Thus, all
animal units on all CNMPs were converted to the method of calculating animal units used
in the calculation set out in permit MIG 010000.

3.3.2 Changes Cost Calculations and Assumptions

Some of the ﬁnancial information was calculated directly from the interview
responses, but some costs were given in percentage terms with no baseline and thus, these
costs were calculated using several methods. Soil and manure testing was calculated by
multiplying the number of additional or fewer tests times the average cost of the test.
There were several laboratories used to evaluate soil and manure samples; the average
cost for a soil test was $7 per sample, and the average manure test cost was $32 per
sample.

Equipment and machine use, manure spreading labor, and fuel were calculated
using a computer spreadsheet developed at the University of Missouri (Massey, 1998).
This spreadsheet has been used in manure cost studies and by producers to estimate the
costs of spreading manure using different equipment, machinery, and distances from the

storage area (Hadcock & Wright, 2002). The Excel spreadsheet assisted the researchers

34

in estimating several variables relevant to this study. Fuel cost has changed substantially
over the past three years, but $2.30 per gallon was used as the standard for the fuel cost
input in the spreadsheet. The hourly wage for manure spreading labor was calculated at
$10 per hour; this rate did not include beneﬁts, bonus, or compensation (USDA-NASS,
2004). The Massey spreadsheet calculated an average of $2 per hour to account for the
beneﬁts, bonuses, and other compensation. The size and type of equipment was altered
within the spreadsheet for each operation based on the size of the operation, the changes
made, and the information provided in the CNMP.

The phosphorus and nitrogen savings or cost calculated was based on the 2001
Crops and Livestock Budgets Estimates for Michigan (Dartt & Schwab, 2001). These
costs were then multiplied by the Producer Price Index (PPI)“S (USDL, 2005) to obtain
2004 dollar costs.

Some swine and poultry operators supplemented rations with phytase. Phytase
lowers the amount of phosphorus in the manure by assisting the animal in digesting more
phosphorus. Poultry producers reported their estimated costs of adding phytase. To
estimate the cost swine producers paid to add phytase, correspondence with several
phytase suppliers was conducted. This study used $0.80 for an estimate of the average
additional cost of phytase in a ton of total mixed feed. The number of tons of feed used
on farm was then multiplied by the additional $0.80 each ton cost and then multiplied by
the percent of feed that contained phytase.

Supervision and record keeping labor was calculated based on a labor fee of $16

per hour, as these jobs were primarily completed by the owner or manager. The change

 

'6 The PPI is an indicator of inﬂation published by the US. Bureau of Labor Statistics to evaluate
wholesale prices in the economy.

35

in number of supervision hours and insurance premium rate as a result of MAEAP
veriﬁcation was not available for all farms. The average percent change in supervision
hours was calculated based on information from producers that had similar operation
size, who gave actual information. The average percent change in supervision hours on
an AF 0 were applied to the AF Os that were not able to give an exact number of hours.
The same technique was used for the CAFOs. The insurance premium was calculated in
a similar way. The opportunity cost of the hours spent by the interviewed producer or
farm operation staff collecting information to write the CNMP also was included in the
initial CNMP price, at $16 per hour.

For the purposes of this research, the early veriﬁed operations were those
operations that became veriﬁed between January 2002 and December 2003. The late
veriﬁed operations were those operations that were veriﬁed after 2003. The early
veriﬁed operations generally took longer to become veriﬁed and received special
attention from both agency staff and the CNMP writer, because there were only a few
producers volunteering for the program. Furthermore, they were considered a “pilot”
project in which learning about the MAEAP implementation would take place (Wilford,
personal communication, October 2005). When the program started, it was a Iearrring
experience for all participants: producers, plan writers, and MAEAP partner agencies.
The program implementers also felt that it was critical that the initial producers had a
positive experience, because landowners trust other landowners, as they can identify with
one another’s perceptions, opinions, and motivations (Wilford, personal communication,
October 2005). Positive perceptions about the value of MAEAP were critical to the

increase in livestock producer participants seeking MAEAP veriﬁcation (Wilford,

36

personal communication, October 2005). Only eight producers became MAEAP veriﬁed
in the second year (2003). In 2004, however, the number of MAEAP-veriﬁed producers
increased from a total of 19 to 63. This large increase in veriﬁed operations was
probably due to the long completion time for developing a CNMP, MDEQ initiated
deadline for compliance for CAF Os, more producers learning about MAEAP, an increase
in available EQIP cost-share for producers, and the ECOS agreement that made it
possible to become veriﬁed with MAEAP in lieu of purchasing an NPDES permit, if the
operation had not previously had a discharge.

3.3.3 Environmental Calculations

The environmental data were analyzed for this research with the assistance of the
MSU Institute of Water Research (IWR) and MSU Extension personnel in Calhoun
County. For producers to comply with regulations, they must be able to quantify and
adjust phosphorus imbalances that occur on the farm (V anDyke, Pease, Bosch, & Baker,
1999). When evaluating the environmental data, a cropland P mass balance and a
phosphorus index were calculated as part of this research to examine the differences
between the operation before and after MAEAP veriﬁcation. The changes outlined in the
CNMP and those explained during the interview were applied to the current
environmental state of the operation. It was assumed the changes outlined in the CNMP
were implemented fully. It was difﬁcult to predict what changes an operation would
have implemented on its own had MAEAP not required speciﬁc changes to be
implemented. Therefore, this research only compares changes and costs before and aﬁer

a farm become MAEAP veriﬁed.

37

The cropland phosphorus mass balance accounted for all input and output
phosphorus in one year and was calculated for all operations in which a CNMP was
collected. The CNMP speciﬁed values for most variables necessary to calculate the mass
balance, the computed value was considered the “aﬁer” MAEAP veriﬁcation phosphorus
mass balance. To determine how much environmental change occurred within an
operation due to becoming MAEAP veriﬁed, a “before” MAEAP veriﬁcation phosphorus
mass balance was calculated from information gathered during the interview. These
questions addressed changes in manure sold, feed rations, cropland, number of animal
units, and crop rotations.

To determine the environmental risk of a farm, CNMPs were evaluated to select
the high risk farms based on: 1) proximity (within 1,320 feet or one quarter of a mile) to a
cold water trout stream; and, 2) cropland P mass balance. If the operation was out of
mass balance after becoming MAEAP veriﬁed, or a change in their mass balance score
indicated that there was an increased amount of phosphorus on farm, but the condition
was not necessarily putting the operation out of mass balance, the operation was placed in
the high risk category. If one or more determinants of risk were met then the operation
was characterized for this study as high risk, which meant the farm had a greater chance
of phosphorus leaving the farm.

If a CNMP was not collected from an operation, it could not be determined if that
operation would be considered high risk; thus, only the 25 operations in which a CNMP
was collected were evaluated to place an operation in the high risk category. Twelve

operations were considered high risk. The high risk ﬁelds of the high risk operations

38

were then evaluated with the P-Index”. The assumption that the livestock producer had
fully implemented all the recommended changes listed in the CNMP remained for this
analysis.

Because the existing agronomic soil testing guidelines were developed to predict
crop performance rather than for water quality protection, they must be re-interpreted to
address environmental concerns (Sims & Sharpley, 1998). There is no single phosphorus
index that is appropriate for every state, thus each state has developed an index speciﬁc to
local topography, hydrology, management conditions, and policy decisions (Sharpley,
Daniel, Sims, Lemunyon, Stevens, & Parry, 2003). The Michigan P-Index scored each
ﬁeld by applying a number, associated with the level of phosphorus runoff risk, to
evaluate the level of phosphorus transport and the source of phosphorus. The phosphorus
transport variables included the RUSLEZ score, proximity to surface water, number of
intermittent streams, soil hydrology, and crop rotation. The sources of phosphorus
included the following variables: soil test phosphorus, commercial fertilizer, manure
spreading method, amount of manure, and cover crop when spreading manure.
Generally, each variable could receive a score of zero, one, two, four, or eight, with a
score of zero indicating a low risk and eight indicating a high risk. Each ﬁeld could
receive a P-Index score ranging from 0 to 68. A ﬁeld that had a total score of less than
18 on the Michigan P-Index was considered to have low potential for phosphorus loss.
The P-Index used is discussed in Appendix F (Phosphorus Index (Michigan Trial)).

Only the high risk ﬁelds of the high risk operations were scored with the P-Index

in this research. It was assumed that if the ﬁelds with the highest risk of polluting surface

 

'7 Phosphorus index: This index is commonly used in many states but not in Michigan currently. The index
used was not ﬁeld tested in Michigan and may or may not be similar to the version Michigan ultimately
adopts as its own.

39

water were evaluated and scored below the threshold, then the ﬁelds with less risk of
polluting surface water would also score below the threshold. A high risk ﬁeld was
selected for evaluation based on: 1) proximity (within 300 feet) to surface water; 2) soil
level of phosphorus was above 300 pounds per acre (150 ppm); or, 3) a high MARI score.
The Manure Application Risk Index (MARI) identiﬁes areas that may safely receive
manure applications under speciﬁed weather conditions and during which seasons. A
ﬁeld with a high MARI rating cannot have any manure spread in the winter because
application of manure would not be safe for the environment (Ouyang & Laboski, 2005).
Fields that met one or more of the three criteria were compiled and then within this set,
eight ﬁelds were randomly selected to conduct the P-Index. If an operation did not have
eight ﬁelds that met at least one criterion, either six ﬁelds were tested or the set of tested
ﬁelds were opened to those ﬁelds that had a soil phosphorus level between 150 to 300
pounds of P per acre (75 to 150 ppm) and/or a medium MARI score. Some operations
may not have a change in the phosphorus mass balance or the phosphorus index
depending on the operation’s level of pollution prevention in place prior to MAEAP
veriﬁcation.

3.3.4 Reporting the Data

For the purposes of this research, each livestock producer was labeled with the
corresponding primary enterprise. If a livestock producer raised more than one species,
the largest number of animal units of a single species’ category would be labeled the
“primary enterprise.” Several operations had dairy cows and beef cattle, but the dairy
cattle out-numbered the beef cattle and thus, dairy was considered the primary enterprise;

these operators were labeled as dairy producers.

4o

Due to the large variety and small number of beef producers interviewed, this
species’ information was only discussed in averages. Again, this study was not
representative of the general livestock operations in Michigan, only those operations that
were MAEAP veriﬁed. Conclusions cannot be drawn regarding the costs of the average
beef operation in Michigan due to the small sample size. Also, no minimums or
maximums were listed for any group with a sample size (N) less than four.

In order to accurately compare costs across time, in this study all costs were
adjusted to 2004 dollars using the Producer Price Index (USDL, 2005). Costs were
deﬁned using several methods. There were costs to the producer and costs to society, or
private plus taxpayer costs. A producer’s costs were only the costs in which the operator
paid out-of-pocket. For example, the livestock producer’s cost for the CNMP was the
price for the written CNMP minus any cost-share or in-kind dollars received by the
producer. Private plus taxpayer costs included the costs to the livestock producer plus
any costs for which the livestock producer received from cost-share or in-kind dollars.

There also were total and annual costs related to implementing and maintaining
MAEAP veriﬁcation. The annual cost was not simply the total cost, annualized. The
CNMP had a one time fee, considered to be a start-up cost. The cost to update the CNMP
was considered to be an annual cost, but the two costs were different as the CNMP
updating cost was typically not as expensive as the initial cost of the CNMP. The “total
cost” of writing, implementing and maintaining MAEAP veriﬁcation included the CNMP
price, the costs of any change in managerial practices, and the costs of any change in or
additional capital investments. The “annual cost” of implementing and maintaining

MAEAP veriﬁcation included the managerial costs, which included the TSP or crop

41

consultant fees, annualized, and capital investment changes, annualized. All ﬁgures were
reported in 2004 dollars, but did not account for inﬂation over the 2004 — 2008 time
periods.
3.4 Chapter Summary

The style and design of the interview promoted producer and interviewer
discussion. To evaluate MAEAP the livestock producers, who were already veriﬁed,
were asked questions related to their motivation for becoming MAEAP veriﬁed, the costs
associated with becoming MAEAP veriﬁed, and what management and capital changes
they made for veriﬁcation. The data were then compiled in a database with simple
calculations and regressions used to determine the costs and categorized responses. To
determine the environmental change that occurred on operations due to MAEAP
veriﬁcation, 25 operations were evaluated with the phosphorus mass balance. The farms
that were determined to be at high risk of transporting phosphorus to surface water were
evaluated with the phosphorus index. This index includes variables that evaluated the

ﬁeld’s phosphorus source and transport potential.

42

Chapter 4: Summary of Interview Results
4.1 Introduction

Interviews were conducted between December 2004 and February 2005; 63
percent of all veriﬁed MAEAP producers who were veriﬁed as of January 1, 2005 were
interviewed. Twenty-nine livestock producers discussed 31 operations, and 25 CNMPs
were collected and examined to assess environmental impacts.

Of the 31 operations analyzed, 27 were previously MAEAP veriﬁed and four
were awaiting third-party veriﬁcation (Table 4.1). Throughout the research it was
assumed that these four unveriﬁed operations would be veriﬁed during 2005. Large
operations, CAFOs, made up 17 of the 31 operations and 14 operations were considered
small or medium farms, or AFOs. Swine farm operators were the most frequently
interviewed (13 operations, 92 percent of all veriﬁed swine producers) followed by dairy
(10 operations, 43 percent of all veriﬁed dairy producers), poultry (5 operations, 57
percent of all veriﬁed poultry producers), and beef (3 operations, 50 percent of all

veriﬁed beef producers).

Table 4.1: MAEAP-Veriﬁed Producers and Operation Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef Dairy Poultry Swine Total

Total Producers wrth MAEAP-venﬁed 14 7 13 40
operations

Total Operations MAEAP-veriﬁed 6 15 23 19 63
Producers interviewed 3 10 4 12 29
Operations surveyed 3 10 5 13 31
Producers interviewed veriﬁed as of 1-1-05 3 6 4 12 25
Operations surveyed veriﬁed as of 1-1-05 3 6 5 13 27
Early Veriﬁed Operations (Before 2004) 2 2 1 8 13
Late Veriﬁed Operations (After 2003) 1 8 4 5 18
CAFO (over 1,000 animal units) 1 7 4 5 17
AF 0 (under 1,000 animal units) 2 3 l 8 l4

 

43

 

4.2 Operator Characteristics

The average manager that was interviewed was 50 years old and had slightly
more than a technical education (2.2) plus 19 years of management experience at that
farm location (Table 4.2). “Years in Management” was counted only at that particular
farming operation. However, there were few managers that had switched from a different

location, as most managers interviewed were owner/operators.

Table 4.2: Operator Characteristics (Age, Education, and Experience)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef] Dairy [Poultry] Swine] Total [CAFO] AFO
Age Years

Average 47 52 53 47 50 49 50

Standard Deviation 21 9 7 8 10 12 6

Minimum“ 36 43 35 23 23 42

Maximum 66 59 69 69 69 62

N 3 10 4 12 29 17 12

ormal Education 1-4 scale
Average 3.0 I 1.8 1 3.0 l 2.0 I 2.2 I 2.1 l 2.3
Percent

High School (1) 0 60 0 33 34 39 27

Technical Degree (2) O 10 25 42 24 22 27
Bachelor's Degree (3) 100 20 50 17 31 28 36

Master's Dgree (4) 0 10 25 8 10 ll 9

N 3 10 4 12 29 17 12

Years Managi_ng0peration Years

Average 21 19 18 18 19 17 21

Standard Deviatio 17 13 7 8 10 12 8

Minimum 1 7 5 1 l 10

Maxim 45 25 34 45 45 38

N 3 10 5 13 31 17 14

 

 

 

‘Minimum and maximum values are not reported if N is less than 4.

Overall, there was not much difference in the average age of the operator among
all species and size of operations. CAFO operators however, varied the most in age,
ranging from 23 to 69 years old. Beef and poultry managers had, on average, the most
formal education — with no producer acquiring less than a technical degree. Dairy

producers were, on average, the least formally educated (1.8 on a 4 point scale), but had

44

many years of management experience at that farm location (19). One dairy producer
had been managing the same operation for 45 years. Large operations had some of the
most inexperienced managers; no small or medium operator had less than 10 years
experience.
4.3 Farm Operation Characteristics

The sample in this research was a good representation of the livestock operations
and operators that were MAEAP veriﬁed, as 43 percent of the operations and 63 percent
of the operators that are MAEAP veriﬁed by January 1, 2005 were interviewed. Many of
the livestock producers interviewed had contracts with or owned other farms that were
also MAEAP veriﬁed, as can be seen from the difference in total operations veriﬁed and
total producers with veriﬁed operations in Table 4.1. Of the 63 operations that have been
MAEAP veriﬁed, there were 40 owners.

4.3.1 Land and Crops

Five of the 31 operations surveyed had no cropland acres, but even with these low
values, the average farm in the interviewee database operated 1,138 acres (Table 4.3).
The median operated acreage was 1,060 acres. If the operations with no cropland were
excluded, the average operated acreage was 1,400 acres. Operated acre calculations only
included the acreage used for crop production; facility and woodlot acres were omitted. It
should be noted that the operated acre calculation does not imply that all of this land was
available to spread manure. Spreadable acres included land that livestock producers
owned, rented, or had verbal or written spreading agreements with the owners, excluding
those acres with phosphorus content greater than 150 ppm, buffer strips, and grass

waterways. Spreadable acres averaged 1,295 acres, approximately 160 acres more than

45

the total operated acres (Table 4.3). The increase was due primarily to the additional
agreements dairy and poultry operators had with other crop producers to spread the

manure.

Table 4.3: Acreage* for Interviewed Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef ] Dairy ] Poultry l Swine ] Total l CAFO ] AF 0
lOwned acres Acres
Average 450 1,067 470 581 707 825 564
Standard Deviation 477 759 683 875 789 784 801
Minimum" 0 0 0 0 0 0
Maximum 3,000 1 ,500 3 ,000 3,000 3 ,000 3,000
ented acres
Average 273 746 40 378 432 602 226
Standard Deviation 414 620 89 343 487 578 231
Minimum 0 0 0 0 0 0
Maximum 1,957 200 1,180 1,957 1,957 800
IOperated acres
Average 723 1,813 510 957 1,138 1,427 789
Standard Deviation 891 990 760 1,020 1,044 1,096 891
Minimum 0 0 0 O 0 0
Maximum 3,300 1,700 3,200 3,300 3,300 3,200
ISpreadable acres
Average 526 2,3 87 1,103 708 1,295 1,871 597
Standard Deviation 649 1,618 1,685 519 1,382 1,568 651
Minimum 690 0 190 0 0 0
Maximum 6,258 3,813 2,227 6,258 6,258 2,610
N 3 10 5 13 31 17 14

 

 

" Owned, rented and operated acres include only cropped acreage, not facility and woodlot acres.
"Minimum and maximum values are not reported if N is less than 4.

In the aggregate, producers owned an average of 707 acres and rented an average
of 432 acres. The average dairy operator farmed the most cropland (1,813 acres); he/she
had 1,067 acres of owned cropland and 746 acres of rented cropland. Dairy producers
also increased the average number of Spreadable acres the most, by 574 acres through

spreading agreements. The average swine operation could not spread manure on 250 of

46

their total operated acres, and other agreements were not obtained to increase the amount
of Spreadable land available. The large number of acres unavailable for manure
spreading at any given operation was typically due to the number of acres having a
phosphorus soil test above 150 ppm.

This new information regarding the soil test and amount of manure that could be
spread on speciﬁc ﬁelds decreased the number of acres an AF 0 could spread manure on
compared to the total number of operated acres by approximately 190 acres. The amount
of Spreadable acres impacted the number and scope of the changes required in the
CNMP. Because the fewer Spreadable acres, the more land a producer needed to acquire,
the more manure that must have been sold, the larger the amount of manure that must
have been decreased with technologies, or the more animals that must have been sold.

Rented land was often obtained via rental agreements that were contracted for at
least several years in length. Uncertainty is inherent in a one-year leasing agreement,
which may reduce a tenant’s ability and willingness to adopt new pollution prevention
practices. Thirty-nine percent of the 29 producers interviewed (12) had land rental
contracts that mentioned applying manure and/or nutrients to the land at agronomic rates
or in accordance with GAAMPs. One producer that did not currently have nutrient
management terms in his rental agreements thought he would need to add the manure
management wording in future rental agreements due to an increase in his liability
concerns for nutrient leaching and runoff in the past few years.

4.3.2 Animal Units and Manure Sold

Animal units (A.U.) were standardized for this research. The animal units used to

calculate a farm’s CNMP animal units was not necessarily the number of animal units

47

used to calculate this study’s averages. The calculations for this research were based on
the EPA Permit (MIG 010000) method; that is, the number of noses was counted rather
than total average weight divided by 1,000 to determine the number of animal units. For
example, the new method counted the number of dairy cows on the farm and multiplied
the total number by 1.4; the old method calculated the actual or estimated weight of all
the cows and divided the total weight by 1,000. (Refer to Appendix A, “Calculating
Animal Units: Permit MIG 010000 Compared to General Permit MIG 440000” for a
comparison of the two methods, for calculating animal units.)

If an operation, such as swine, had multiple groups of animals being raised
throughout the year, the average number of animals housed was used and then multiplied
by the amount of time the animals were housed for manure collection. Thus, if the
operation housed 1,000 animal units for 50 percent of the year, and if the production site
was empty the other 50 percent of the time, the operation was considered to have 500
animal units annually.

Not surprisingly, the number of animal units varied signiﬁcantly between and
within species (Table 4.4). Poultry producers, on average, had the most animal units
(7,808) per operation of all animal species. The 7,808 animal units equates to
approximately 780,800,000 birds. The average poultry operation had nearly four times
the number of animal units as the next largest species, dairy. The large number of animal
units per poultry operation was more common due to the industry’s consolidation;
however, poultry producers also had the largest range from 405 to 17,873 animal units.

Interestingly, every poultry producer interviewed sold at least 40 percent of his manure.

48

These operators sold off farm, on average, 83 percent of all manure generated on the
veriﬁed operation.

When manure was sold off-farm, it decreased the amount of manure spread on
operated land. This decrease in manure meant that a new ﬁgure of net animal units18
needed to be calculated to determine the amount of animals units that must be considered
when spreading manure. The net animal units indicated a lesser amount of manure that

needed to be spread compared to the actual number of total animal units.

Table 4.4: Animal Units before Any Manure Sold and Net Animal Units

 

 

 

 

 

 

 

Beef Dairy Poultry Swine Total CAFO AF 0
Animal units Animal Units

Average 417 1,994 7 ,808 1,146 2,424 3,999 510
Standard Deviation 592 1,299 7,058 1,003 3,685 4,420 310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum* 309 405 160 47 1,100 47
Maximum 3,660 17,873 4,054 17,873 17,873 1,058
[Percent manure sold Percent
Average 0 7 83 13 21 28 12
Standard Deviation O 13 26 28 35 39 28
Minimum 0 40 0 0 0 0
Maximum 33 100 100 1 00 1 00 100
'Net animal units Animal Units

 

Average 417 1,814 942 1,070 1,226 1,843 477
Standard Deviatiorl 592 1,207 1,974 954 1,245 1,384 337

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum 309 O 0 0 0 0
Maximum 3,660 4,468 3,851 4,468 4,468 1,058
N 3 10 5 13 3 1 l7 l4

 

*Minimum and maximum values are not reported if N is less than 4.
As shown in Table 4.4, CAFOs on average had 3,999 AU. and sold an average of

28 percent of the manure generated on the farm. By selling manure, CAFOs were able to

 

'8 Net animal units = total animal units — (animal units‘percent manure sold). It is assumed the number of
animal units on a farm represents the amount of manure produced. If the producer sells 83 percent of the
operation’s manure then only 83 percent of the total animal units will need to be used when calculating the
pounds of phosphorus generated per animal unit or number of animal units per acre.

49

decrease the number of animal units germane to their manure management, by over 50
percent to 1,843, which ultimately decreased the manure applied to the operated acres.
AFOs sold little manure on average (12 percent). Although AFOs sold some manure,
they had 360 fewer acres for manure spreading on average, as compared to the number of
acres they operated; thus, animal density was a concern on the small and medium farms.

4.3.3 Animal Density

Research has shown that to provide sufﬁcient land base for using the nutrients in
manure, a conﬁned animal feeding operation (CAFO) requires approximately one acre of
land per six animal units for nitrogen utilization and approximately one acre per one
animal unit for phosphorus utilization (Glewen & Koelsch, 2001). Due to the large
number of freshwater watersheds and lakes throughout and surrounding Michigan,
phosphorus is the primary nutrient of concern. Phosphorus is a key nutrient pollutant of
freshwater because excess phosphorus in the water stimulates eutrophication, which can
diminish the value of water for human activities, aquatic life, and livestock. As a result,
an animal density of approximately one acre per one animal unit was optimal to reduce
the risk of phosphorus runoff.

Animal density could be calculated using several different methods, as seen in
Table 4.5. Often, only the operation’s animal units and the land that operation used for
crop production determined animal density; this method was used in row one of Table
4.4. However, the cropland operators used to spread manure was not the same as
operated acres, and some operators sell manure. In order to be precise, both the amount
of manure sold off farm and only the cropland that manure could be spread determined

the density calculated in row four of Table 4.4, Net animal units per Spreadable acre.

50

This calculation was the most accurate animal unit density calculation as it included both
the “spreadable acre” and total manure or “net animal unit” variables.

The importance of selling manure was most evident in the difference between
rows three and four. Poultry producers sold the most animal units decreasing their
animal density the most, from 5.8 to 1.3. However, all densities have large ranges among
species. On the average, beef (0.6) and dairy (0.8) operations had a low animal density

no matter how the density was calculated.

Table 4.5: Animal Density

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef ] Dairy [Poultry] Swine] Total ICAFOI AFO
1 Animal units/ acres operated Animal Unit per Acre
Average 0.4 0.8 5.3 2.3 1.8 2.7 0.7
Standard Deviation 0.2 0.5 7.4 4.5 3.6 4.7 0.6
Minimum” 0.0 0.0 0.0 0.0 0.0
Maximum 1.6 17.3 17.3 17.3 1.9
Net A.U.l acres operated
Average 0.4 0.7 1.3 1.9 1.2 1.8 0.6
Standard Deviation 0.2 0.4 1.9 3.4 2.4 3.1 0.5
Minimum 0.0 0.0 0.0 0.0 0.0
Maximum 1.2 13.0 13.0 13.0 1.7
Animal units/ spreadable ac.
Average 0.6 0.9 5.8 1.7 1.6 2.0 1.2
Standard Deviatiog 0.3 0.6 6.6 0.8 1.9 2.4 1.0
Minimum] 0.2 0.4 0.2 0.5 0.0
Maximuml 2.1 3.1 10.5 10.5 3.1
Net A.U./ spreadable acres
Average 0.6 0.8 1.3 1.6 1.2" 1.2 1.1
Standard Deviation 0.3 0.4 1.9 0.8 0.8 0.7 1.0
Minimum] 0.2 0.0 0.0 0.0 0.0
Maximum 1.5 3.1 3.1 2.6 3.1
N 3 10 2 I3 28 15 13

 

 

‘Minimum and maximum values are not reported if N is less than 4.
"Rounding caused the Total and CAFO averages in row four to look equal, but there was a 0.05 unit
difference.

Often past research indicating that livestock producers needed more cropland to

Spread manure, did not account for rented land, access agreements, and/or sold or

51

composted manure (e.g., USDA-NRCS, 2003 and Gollehon, et al., 2001). All of these
variables were considered in this research. The net animal units per spreadable acre
showed that two species had an average density larger than 1.0 at 1.3 (poultry) and 1.6
(swine). An operation with an average density above 1.0 may be due to the method, in
which the plan writer calculated the number of animal units initially, or the spreadable
acres could have had a phosphorus level below 75 ppm and manure could be spread
according to nitrogen, not phosphorus, recommendations of the crop (MDEQ, 2005). If a
ﬁeld had a soil test below 75 ppm, that ﬁeld was limited only by nitrogen, not
phosphorus, and the animal density could be higher - about six animal units per acre
instead of one (Glewen & Koelsch, 2001). An animal density of approximately one was
the goal of operations where the limiting nutrient on all ﬁelds was phosphorus. The
average density across all species was 1.2, while CAFOs and AFOs were similar at 1.2
and 1.1 respectively.
4.3.4 Geographic Location
Many of the operations that have become MAEAP veriﬁed were in the same
geographic area. Just under half (14 of 31) of the operations surveyed were from two 3-
digit zip codes areas, 488 and 494 (Table 4.6). These two zip code areas were highly
populated with both animals and people.
Five out of six operations surveyed in the 488 zip code area (parts of Clinton,
Ionia, and Montcalm counties) and 75 percent of the operations (six) in the 494 zip code
area (parts of Muskegon, Oceana, and Ottawa counties) sold some portion of the manure
produced. However, the 490 zip code area (parts of Barry, Branch, and Kalamazoo

counties) sold the most equivalent animal units of manure — 94 percent. If the livestock

52

producers in these three zip codes did not sell any manure, the average animal density
ratio would have been above 2.5. Due to manure sales, the average operation in these zip

code areas had an animal density of 0.97.

Table 4.6: Operation Descriptors by First 3 Digits of the Zip Code, Averages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zip Percent
Code Early Late A.U.
AreasN Counties VerifymVerify20 CAFO AFO Total A.U. Sold
Percent Animal Unit Percent
484 4 Huron, Newaygo, Sanilac 50 50 100 0 4,507 0
487 5 Huron, Sanilac, Tuscola 40 60 80 20 6,553 0
488 6 Clinton, Ionia, Montcalm 17 83 67 33 9,545 15
490 3 Barry, Branch, Kalamazoo 67 33 33 67 4,937 94
492 3 Calhoun, Hillsdale, Lenawee 67 33 0 100 2,848 0
493 l Bagy, Isabella, Mecosta 0 100 0 100 766 0
494 8 Muskegon, Oceana, Ottawa21 38 63 63 38 45,927 68
496 1 Lake, Missaukee, Osceola 100 0 0 100 47 0
N 13 18 17 14

 

 

 

 

 

 

 

 

 

 

 

The aggregation of livestock operations in the same area has been seen throughout
Michigan; often the same species were located in the same 3-digit zip code. The
economic beneﬁts of vertical coordination in the animal sector, particularly for poultry
and swine, led to both larger operations and a geographic concentration of animal
production (Martinez, 1999). Four swine operations were located in the 487 area and
four poultry operations were located in the 494 zip code area. However, the

concentration of livestock operations poses challenges when spreading manure.

 

’9 “Early Verify” is deﬁned as those operations that became MAEAP veriﬁed before 2004 (2002-2003).

2° “Late Verify” is deﬁned as those operations that became MAEAP veriﬁed after 2003 (2004-2005).

2'The USDA-NRCS evaluated counties across the United States that had excess manure compared to the
amount of spreadable land available. From the NRCS simulation, one county in Michigan (Ottawa County)
was found to have more manure than the capacity of its crop and pasture land. This excess production of
manure may be one reason why livestock producers in the 494 zip code area sold manure. It is not known
in which county the manure was spread after it was sold, but some manure was sold outside the zip code
area (USDA-NRCS, 2003).

53

4.4 Starting the Comprehensive Nutrient Management Plan

No operator had a Comprehensive Nutrient Management Plan developed prior to
MAEAP veriﬁcation, regardless of where the operation was located. Writing the CNMP
was the second phase of the MAEAP veriﬁcation process and required more time and
money than MAEAP’s ﬁrst and third phases. The most recently developed CNMPs often
had more information than earlier plans, because of changes in rules and regulations. Due
to plan writer and operation heterogeneity, several different methods were used to
calculate the animal units, manure quantity produced, and cost to have a CNMP written,
as well as the variety of manure nutrient and land base details listed within a plan.

4.4.1 Motivation to become MAEAP Veriﬁed

Motivation to begin a CNMP came from many different sources. The early
adopters had different motivations for becoming MAEAP veriﬁed than the later adopters.
This difference was in large part due to regulatory changes. By 2006, more animal
producers will need a CNMP to remain in business. By September 1, 2005, all CAFOs
must have either signed a letter of intent to participate in MAEAP or purchase an NPDES
permit; both programs require a CNMP (Wilford & Wuycheck, 2003). Regulations
prompted seventy-one percent (12 of 17) of CAFO producers to become MAEAP
veriﬁed (Table 4.7). The number of operations that have become MAEAP veriﬁed has
increased; MAEAP veriﬁed its 100".1 farm in the summer of 2005 (Negal, 2005).

Fifty-eight percent of all producers (18) that became MAEAP veriﬁed did so due
to current regulations or regulations they foresaw affecting their farm in the future.
Seventy-one percent of CAF Os (12) and only forty-three percent of AFOs (six) listed

regulations as a reason they became veriﬁed. There were fewer concerns from

54

environmental groups directed at AFOs, where as CAFOs have received more concern
from the community and have faced more regulations. Regulations motivated 100
percent of the four poultry producers interviewed to become MAEAP veriﬁed. The risk

of lawsuits and ﬁnes motivated a total of six producers to become MAEAP veriﬁed.

Table 4.7: Producers Motivation to Become MAEAP Veriﬁed

 

 

 

 

Early Late
Beef Dairy Poultry Swine Total CAFO AFO Verify Verify
Percent
nvironmental
regulations directed at
his/her farm 33 60 100 46 58 71 43 62 56
Someone asked
him/her to become
veriﬁed 33 40 0 62 42 35 50 54 33

 

To obtain technical and
ﬁnancial assistance 33 20 20 31 26 29 21 15 33
To decrease his/her
lawsuit and ﬁne risk 0 20 20 23 19 24 14 15 22
To obtain an increased

 

 

 

 

 

community awareness 0 30 0 8 13 18 7 8 17
[Insurance discounts 0 10 0 8 6 6 7 8 6
lHad more time to

manage the farm 33 0 0 0 3 6 0 0 6

 

 

 

 

 

 

 

 

 

 

 

 

N 3 10 5 13 31 l7 14 13 18

‘Producers could have chosen more than one motivation as to why they decided to have their operation
become MAEAP veriﬁed.

 

As seen in Table 4.7, the operations veriﬁed before 2004, labeled Early Veriﬁz
revealed that eight producers sought MAEAP veriﬁcation predominately because of
environmental regulations directed at their farms (62 percent). Also, seven became
MAEAP veriﬁed because someone asked them to become veriﬁed (e.g., Michigan Farm
Bureau or MSU Extension agent) (54 percent). As expected fewer “late veriﬁed”
operators became MAEAP veriﬁed because someone asked them too (33 percent, (six))

as compared to 54 percent (seven) of the “early veriﬁed” operators. As MAEAP has

55

evolved, motivation to become veriﬁed shifted towards technical and ﬁnancial assistance
a producer received for becoming veriﬁed (15 percent of the early (two) to 33 percent of
later veriﬁed farms (six)). The interviewed producers could have responded with a
multitude of reasons, which is why the columns listed do not sum to 100 percent.

More time to manage the farm motivated only one producer to become MAEAP
veriﬁed. Community awareness motivated four producers, while insurance discounts
motivate only two. Items that did not motivate any operator to become MAEAP veriﬁed
included a concern about drinking water on the farm, awareness of a pollution problem
on the farm, or a landlord or agricultural lender encouraging or requiring a CNMP.

Participation in voluntary programs may have been motivated by environmental
stewardship, i.e., personal satisfaction gained from adopting activities, such as MAEAP,
that protect the environment. Eight producers interviewed mentioned that they became
veriﬁed because they felt it was the “right thing to do.” This statement was oﬂen used to
explain several different motivations. For some this statement meant setting a good
example for other Michigan livestock producers, others mentioned this statement because
they foresaw better crop returns, while others thought by becoming MAEAP veriﬁed they
were “doing the right thing,” whether it was for the environment or their neighbors.

4.4.2 Agency Assistance

Agricultural producers who voluntarily followed GAAMPs within MAEAP’s
guidelines or via the NPDES permit were provided protection from public or private
nuisance litigation under Public Act 93 of 1981, as amended, The Michigan Right-to-
Farrn Act. MAEAP veriﬁcation and the NPDES permit offered the same assurance

against nuisance litigation, if a suit was ﬁled. One of the major differences between the

56

MAEAP and the NPDES permit was the level of assistance the producer received to
complete the CNMP and understand regulations affecting Michigan livestock producers.

To learn about the regulations, the CNMP, and information supplied to the plan
writer, MAEAP livestock producers received support from many different agencies.
Initially, many livestock producers were skeptical of any government intervention and
how much activity the government would have on the farm. One poultry producer stated
that the hardest part about volunteering [for MAEAP] was that the “government” was
going to be on his farm and he feared that they might ﬁnd something they did not like and
penalize him. Working with the livestock producers during MAEAP’S education phase
helped to reduce producer anxiety about having governmental agency staff on the farm.
The education MAEAP provided as part of its three-phase process also allowed livestock
producers to learn from professionals in the ﬁeld and from one another, rather than just
purchasing and following an NPDES permit.

Another result of the program’s education was that there were many agencies
represented within the MAEAP partnership that livestock producers indicated they could
work with and trust, throughout the MAEAP veriﬁcation process. The average producer
conversed with two different agencies for advice and assistance in writing the CNMP.

Of the governmental agencies that assisted the interviewed producers in writing
their CNMP and becoming MAEAP veriﬁed, MSU Extension (MSUE) was a resource
used by almost 50 percent of the producers; 35 percent used the NRCS (Table 4.8). The
Michigan Department of Environmental Quality (MDEQ) was used the least as a
resource. The plan provider was a resource used by 74 percent of all producers to seek

advice, and particularly to ask questions about the contents of the producer’s own plan.

57

Table 4.8: Resources Used to Write and/or Implement the CNMP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef] Dairy IPoultry] Swine ] Total ] CAFO] AFO
Percent
'MSUE 67 30 20 69 48 29 71
NRCS 67 20 40 38 35 12 64
[MDEQ 0 10 0 0 3 0 7
[MDA 33 20 0 15 16 6 29
lPrivate Plan Writer 67 80 100 62 74 88 57
Conservation District 0 10 0 23 13 6 21
ichigan Milk Producers 0 10 0 0 3 0 7
lPork Producers 0 0 0 15 6 6 7
Other 67 10 20 15 19 18 21
Number Count
Average Resources Used 3.0 1.9 1.8 2.4 2.2 1.6 2.9
N 3 10 5 13 31 17 14

 

 

 

 

 

 

 

 

 

 

" Producers listed all the resources they used, often listing more than one resource.

Often, before a livestock producer began writing the CNMP they sought the
advice of various agency staff, the MAEAP educational seminars, and/or a CNMP plan
writer to consider appropriate management changes. Management and capital investment
changes involved with the CNMP could be simple (e.g., recording new information or
having manure samples taken) or complex (e.g., building additional manure storage or
changing the method used to spread manure).

4.5 Barriers to Implementing the CNMP

The largest barrier for MAEAP veriﬁcation, affecting 41 percent of the 29
producers interviewed, was not ﬁnancial, but rather available, spreadable cropland (Table
4.9). This concern about enough land to spread manure came from several different
factors, highlighted in grey in Table 4.9: land base, using manure for its actual nutrient
value (i.e., not using the book values for manure’s nutrient value and not discounting

manure’s nutrient content), crop rotation, and hauling the manure further.

58

Table 4.9: Producer-Identiﬁed Barriers to Implementing Required CNMP Changes

Percent
33

0 0
0 10
3 10 4

 

One of the ﬁrst barriers to complete the CNMP was ﬁnding enough cropland that
had a soil phosphorus (P) level below 150 ppm. If the soil tested above this level of P
then no manure could be spread on that land. Transporting manure could be costly to
move relative to its nutrient value, which limits the owners’ ﬁelds to which they can
economically apply manure. Many operations across the US did not consider the nutrient
value of manure when making livestock or cropping management decisions, thus treated
manure as a waste. This situation has led to over-application of manure on land nearest to
the facility relative to plant uptake across the US (Ribaudo et al., 2003), and is most
likely what occurred on Michigan farms.

Different crop rotations require different amounts of phosphorus and can lead to
more or less phosphorus uptake by the plant. However, before the agronomic level of P
was established for a CNMP, many livestock producers spread excess phosphorus on the
high value root crops; one vegetable ﬁeld had a phosphorus level of 450 ppm. In many

cases, acreage with these crops in past rotations had P levels above 150 ppm.

59

As a result of their CNMPS, two producers took entire crops out of the rotation
because the crop did not remove enough phosphorus. Different crops take up and store
different amounts of phosphorus from the soil (Table 4.10). For example, a soybean acre
that yielded 40 bushel took 35.2 pounds of P205 ﬁom the soil while an average grain corn

acre removed 42 pounds of P205 from the soil.

Table 4.10: Nutrient Removal (lb/unit of yield) by Several Michigan Field Crops

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crop Unit N P205 K20
----lb per unit-«-

Hay ton 45* 10 45

Alfalfa Haylge ton 14 3.2 12
Grain bushel 0.88 0.38 0.25

Barley Straw ton 13 3.2 52
Birdsfoot Trefoil Hay ton 481 12 42

Brome grass Hay ton 33 13 51
Grain Bushel 1 .9 0.91 0.46

Canola Straw Ton 15 5 .3 25
Clover-grass Hay ton 41 1 3 39
Grain Bushel 0.9 0.35 0.27

GrainM Ton 26 12 6.5

Stover Ton 22 8.2 32

Corn Silage Ton 9.4 3.6 7.8
Dry Edible Beans Grain cwt 3.6 1.2 1.6
Grain Bushel 0.62 0.25 0.19

Oats Straw Ton 1 3 2.8 57
Orchard grass Hay ton 50 17 62
Potatoes Tubers cwt 0.3 3 0. l 3 0.63
Red Clover Hay ton 401 10 40
Grain Bushel 1.1 0.41 0.31

Rye Straw Ton 8.6 3.7 21
Sorghum —Sudan Hay Ton 40 15 58
grass (Sudax) Haylage Ton 12 4.6 18
Soybeans Grain bushel 3 .8 0. 88 l .4
Sugar Beets Roots ton 4 1.3 3.3
Grain Bushel l .2 0.62 0.3 8

Wheat Straw Ton 1 3 3 .3 23

 

‘Legumes get most of their nitrogen from air. "High moisture grain.

Source: Fertilizer Recommendations for Field Crops in Michigan (Christenson et al., 1992)

60

 

Another method livestock producers used to increase spreading capabilities was to
plant a winter cover crop. A winter cover crop, in some cases, reduced the effects of
snowmelt and erosion, lowering a ﬁeld’s MARI score enough to allow winter spreading.
Adding winter cover crops decreases erosion and nutrient surface runoff and increases
organic matter. Similarly, some crop producers planted buffers around water bodies to
decrease runoff. The acreage dedicated to buffers did not signiﬁcantly impact the
number of acres available for manure spreading; on average, only 3.5 acres of buffers or
grass waterways were planted for MAEAP veriﬁcation per farm.

Another barrier to acquiring enough land for the CNMP came from estimating
manure’s nutrient content. Testing manure for its nutrient content was a new concept for
some livestock producers. Six producers had never tested manure for its phosphorus
content prior to obtaining a farm speciﬁc CNMP. Thus, during the ﬁrst few years, some
veriﬁed farms lacked a manure nutrient history; therefore, to complete the CNMP with
agronomic spreading rates, many used a mathematical calculation or the values listed in
the Midwest Plan Service books to estimate manure’s nutrient levels (Midwest Plan
Service, 2000). One operation estimated his manure content initially, but after testing his
manure he realized he could spread manure at a higher rate because the true nutrient
value was less than the estimated. The actual characteristics of manure can vary d: 30
percent from table values (Bollinger, Rector, & Wilford, 2002).

AS shown in Table 4.9, 17 percent of the producers interviewed saw the lack of
manure nutrient history as a large barrier to implementing their CNMP. However, this
perceived barrier may not be an actual barrier as a mass balance calculation based on

phosphorus inputs and outputs to the farm could have been estimated. The underlying

61

concern may have been that the previously unknown soil and or manure level of
phosphorus may now be the limiting factor in spreading the manure on many ﬁelds.

Finding enough time to spread manure and keep records was mentioned by 38
percent of the livestock producers as a large barrier to implementing the CNMP (Table
4.9). Time more seriously affected the small and medium operators as 46 percent of the
13 producers listed it as a large barrier (six), while only 31 percent of the 16 CAFO
operators mentioned it (ﬁve). One livestock producer replaced 200 acres of his grain
corn with wheat, in order to be able to spread manure in the summer, when he had more
time. Another producer explained that he could only spread a total of 11 days a year if
weekends, holidays, and winter months were omitted, as well as taking into consideration
forecasted weather conditions. Since it took him 20 days to empty his manure storage;
thus, he hoped winter Spreading would never be outlawed. Although 74 percent of the
operations surveyed (23) had more than six-months of storage, it was still important that
livestock producers have enough time, especially during strategic periods of the year to
empty the manure storage.

Perhaps due to the infancy of the program, many livestock producers saw the
inconsistency among different agencies’ information as a large barrier (28 percent).
Other barriers indicated by the respondent included manure storage (21 percent), ﬁnding
a qualiﬁed CNMP provider (14 percent), composting of dead animals (seven percent),
and ﬁnancial situation (three percent).

4.6 Perceived Environmental Outcomes
Each producer interviewed mentioned their perceived environmental changes that

occurred on the operation since completing the CNMP and/or becoming MAEAP

62

veriﬁed. As indicated in Table 4.11, 38 percent of the 29 operators (11) described their
operations as limited by phosphorus; by which they meant that there were multiple ﬁelds

where they could not spread any phosphorus after they became MAEAP veriﬁed.

Table 4.11: Perceived Environmental Outcomes Due to MAEAP Veriﬁcation

 

 

 

 

 

 

 

Beef Dairy Poultry Swine Total CAFO AFO
Percent

[Limited by ﬁeld phosphorus levels 0 50 75 25 38 44 31
Eerceived a decrease in ﬁeld

 

 

 

 

 

 

 

 

 

hosphorus level 33 2O 50 33 3 l 44 15
[Increased H20 quality 33 20 25 42 31 19 46
[Increase in percent organic matter 0 20 25 42 28 31 23
[Decreased soil erosion 33 20 25 33 28 25 31
[increased H2O holdingcapacity 33 10 0 42 24 19 31
lincrcascd wildlife habitat 33 0 0 42 21 13 31

 

 

 

 

 

 

 

 

 

 

N 3 10 4 12 29 17 12

 

CAFO managers perceived a decrease in the amount of phosphorus in the soil (44
percent) and an increase in percent organic matter (44 percent) following veriﬁcation.
AFO managers more often expected an increase in water quality (46 percent). There
were not large differences in the perceived environmental effects across different species.
These changes were the perceived changes, and may not be an accurate account of the
farm after scientiﬁc testing.

4.7 Opinions

A producer’s perceptions and personal experience can be inﬂuential in persuading
other livestock producers to become MAEAP veriﬁed. MAEAP’S education
requirement, or Phase 1, set it apart from simply obtaining an NPDES permit. Through
MAEAP’S educational programs, producers learned about nutrient pollution prevention,

the effects of new laws and regulations, and where to go to obtain nutrient management

63

assistance. On average, the interviewed operators, on a scale of 1 (Strongly Agree), 2
(Agree), 3 (No Opinion), 4 (Disagree), and 5 (Strongly Disagree), agreed (1.8) with the
statement, “MAEAP’S educational programs have helped me become a better stewar ”
(Table 4.12). When livestock producers are better environmental stewards, they achieved
one of MAEAP’S goals - preventing pollution at its source.

The governmental agencies assisting producers in becoming MAEAP veriﬁed
were one of its unique aspects. Producers listed governmental agencies’ helpfulness as
2.7. One producer said he hated government ofﬁcials knowing everything about him and
was glad MAEAP was not run solely by governmental agencies. Poultry producers
thought the agencies were the most helpful as they assigned the lowest score of all the
producers grouped by animal species (2.3). However, 17 percent of the 29 livestock
producers (5) felt the MDEQ, MDA, and NRCS should have more interaction with each
other so each of the three agencies would offer the same advice.

An important insight was how producers viewed the value of their CNMP. This
measure foreshadowed whether the producer would continue to maintain the changes
outlined in the CNMP, and/or periodically update it. As presented in Table 4.12, when
asked how well they agree with the statement, “My CNMP is so valuable to my
operation; it is my intent to maintain and update it in the future” producers responded in
agreement with a score of 2.0 (agree). No producers gave the statement a score of less
than a 3.0 (no opinion). The swine producers agreed the most (1.5), while the average
dairy producer agreed the least (2.4). The positive feedback and desire to revise the
CNMP suggested that producers should maintain the management scheme changes that

already had been made and will update the CNMP to follow new laws and regulations.

64

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65

The statement operators disagreed with the most (4.5) was “liability and lawsuits
are of ﬂt_’d_e concern for the livestock industry in Michigan” (Table 4.12). Several of the
interviewed producers had litigation brought against them, or knew of a neighbor who
had the same issue. Whether the allegations were factual or not, does not eliminate the
frustrations and costs incurred. The chance of lawsuits prompted one producer to
proclaim, “I’d tell my smaller neighbors to quit before they have to follow all these
environmental regulations, because [writing and implementing] a CNMP takes a lot of
money and causes a lot of headaches.”

The size of an operation inﬂuenced how much a producer agreed with this
statement: “Trends in environmental regulation are clear enough to justify changing my
environmental practices, even those that require permanent structure investments.” The
CAFO managers, on average, were in the median (3.0, no opinion), while the AFO
managers agreed more strongly (2.4). Over the past several years there have been many
changes in regulations directed at CAFOs and some of this difference may have stemmed
from the variable past.

The ﬁnancing for pollution prevention also was addressed. The statement, “even
though clean water benefits the public, producers should pay for the majority of
mandatory environmental practices to ensure pollution prevention,” was given on average
a 3.8 on a 5 point scale. Poultry producers most strongly disagreed (4.8), while the dairy
producers disagreed the least (3.5). Dairy producers had the most managerial and capital
investment changes and received little cost-share per animal unit compared to the other

animal species to make all their required changes.

66

4.8 Comparison to Allen Krizek’s Study

In 2005, Allen Krizek conducted a mail-survey patterned closely with Kevin
Kirk’s earlier work in 1995 with regard to manure management. Dr. Krizek also asked
the same opinion statements used in this study. Dr. Krizek’s sample was much larger
(254 respondents) than the present study (29 respondents). However, comparing the
opinion section of Allen Krizek’s research to this study’s results helped gain a better
understanding of how MAEAP participants differed from the Krizek’s random sample
population of Michigan livestock producers who practiced average to above average
environmental stewardship.

Several statements received similar responses from both studies. The statement,
“my farm can be proﬁtable without causing signiﬁcant water quality pollution” had more
than 90 percent of both study participants giving the statement a strongly agree or agree
score (Table 4.12). This parallel was understandable as all parties, including the
respondents to Krizek’s study, were categorized as practicing average or above average
environmental stewardship. Another statement that received a similar response was “the
law requiring "no discharge" of polluted runoff over land or via tiles is adequate to
counteract agricultural water pollution.” Both studies had a strongly agree or agree
response rate between 52 and 55 percent. However, the number of respondents from this
study that disagreed and strongly disagreed to the same question was nearly double the
number compared to Dr. Krizek’s study. A larger percentage of MAEAP-veriﬁed
producers believed new or different regulations were necessary to lower water pollution

from agricultural sources.

67

One of the statements that differed the most between the two studies was
“MAEAP’s educational programs have helped me become a better steward.” The 31
percent difference between Krizek’s (55 percent) and this study’s (86 percent) agreement
was expected as all MAEAP participants have attended meetings and adopted the
practices taught through MAEAP. It is not known how many of Krizek’s respondents
were involved with MAEAP, but it was likely that if more livestock producers attended
MAEAP’s educational meetings, there would be less gap between the two groups’ scores.

Another statement in which the two study participants disagreed was the ﬁnancial
statement, “Even though clean water beneﬁts the public, producers should pay for the
majority of mandatory environmental practices to ensure pollution prevention.” More
than 80 percent of Krizek’s study participants disagreed or strongly disagreed, as
compared to only 66 percent of this study’s participants. It may be assumed that MAEAP
participants believe that they cannot expect to get all their changes paid for through
Environmental Quality Incentives Program (EQIP), Conservation Reserve Program
(CRP), and Conservation Reserve Enhancement Program (CREP). Currently, these
methods are the only way producers can receive cost-share assistance for new
environmental stewardship enhancements.

4.9 Chapter Summary

The 29 operators that were interviewed have taken an important step in addressing
pollution prevention by obtaining MAEAP veriﬁcation for the 31 operations. Each
operator may have decreased his/her lawsuit risk because of their increased
environmental awareness and conservation of natural resources. MAEAP’s educational

phase likely has assisted operators in becoming better stewards of the land, as judged by

68

the producers themselves as suggested by the opinion statement scores. Assistance to
become MAEAP veriﬁed was provided to the interviewed operators primarily from the
operator’s plan writer and MSUE.

There were large differences in number of animal units and acreage that affected
the amount of manure the operator sold, why the operator decided to become veriﬁed,
and his/her opinions and barriers observed. Dairy producers had the most land, while
poultry producers had the most animal units; thus, poultry producers sold more manure.
Fifty-eight percent of the 29 producers interviewed (18) became veriﬁed due to
regulations directed at his/her operation. However, the largest barrier to becoming
veriﬁed was not related to rules, regulations, or ﬁnancing, but rather available cropland to

spread manure, listed by 41 percent of the 29 operators interviewed.

69

Chapter 5: Financial Consequences of Becoming MAEAP Veriﬁed

5.1 Introduction

With MAEAP’s voluntary adoption, livestock producers would not be expected to
participate unless their expected beneﬁts (ﬁnancial and/or non-ﬁnancial) were greater
than the expected costs, that is, the producer must have perceived some gain (or at least
no net loss) from participation (Alberini & Sergerson, 2002). Positive incentives for
voluntary abatement usually take the form of ﬁnancial subsidies or cost-sharing. Many
of the interviewed operators sought cost-sharing from the Natural Resource Conservation
Service (NRCS). The NRCS executes a program called Environmental Quality Incentives
Program (EQIP); EQIP cost-shares some of the private costs of pollution abatement,
thereby increasing the likelihood that private beneﬁts exceed private costs.

There were two main ﬁnancial costs associated with MAEAP veriﬁcation. One
was the cost of writing the CNMP, and the second was implementing the changes
required. To estimate the ﬁrst year and annual costs of adopting MAEAP, capital
investment changes were annualized. Machinery and equipment costs were annualized
with a 7-year straight-line depreciation, while all other capital investments had a 20-year
straight-line depreciation schedule. The management costs were incurred yearly, while
the CNMP writing fee was incurred only in the ﬁrst year. However, the fee to update the
CNMP was considered an annual managerial cost. Managerial and other annual costs
were calculated using the present value of an annuity, based on the ending year of 2008,

at which time a permit may need to be adopted due to the new regulations.

70

To maintain the conﬁdentiality of the three beef producers interviewed, there are
no minimums or maximums listed for the beef operations or any category with an N less
than four.

Throughout this chapter costs are described as either the producer costs or the
producer plus taxpayer costs. The producer costs were those costs that the producer paid
out-of-pocket. The producer plus taxpayer costs were the costs the producer incurred
plus the costs that were cost-shared by tax payers.

5.2 Cost of Writing the CNMP

From Table 5.1, the average producer cost to write the CNMP for MAEAP
veriﬁcation was $2,531. This average includes the discounted price due to any EQIP
cost-share the producer received and CNMPs that were written for free as a part of the
plan writer’s certiﬁcation. The average private plus taxpayer cost to write the CNMP
was $5,165, which included an assumed cost-share price for these CNMPs that were
written for free for the livestock producers. For example, if the plan was written for free
as part of certiﬁcation, a small or medium operation’s CNMP was given a value of
$2,000 and a large operation’s CNMP was given a value of $5,000. These two prices
were the average costs associated with writing a CNMP for the prospective operation
sizes of the other CAFO and AFO producers interviewed. This situation affected eight
operations (26 percent).

Comparing individual species, the average dairy producer CNMP cost was over
$2,500 more expensive than any other species at $4,082 (Table 5.1). Dairy farms had
more production variables, which included milk house waste, silage leachate, and the

most cropland to enter into the plan. Dairy producers also paid for 55 percent of their

71

CNMPs themselves. The average AF O operator paid approximately $1,900 less than the

CAFO operators paid. CAFOs received a larger percentage (53 percent) of cost-share on

average compared to AFOs (44 percent) to write the CN MP.

Table 5.1: Average Cost to Write the Comprehensive Nutrient Management Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef [Dairy [Poultry] Swine] Total jCAFOl AFO
[Producer cost*: CNMP 2004 Dollars
Average 1,992 4,082 2,160 1,605 2,531 3,382 1,498
Standard Deviation 2,649 3,101 3,268 1,420 2,609 3,085 1,380
Minimum" 800 320 165 165 165 166
Maximum 8,600 7,980 5,345 8,600 8,600 5,030
roducer + taxpayer cost***:
NMP
Average 3,054 7,507 4,835 3,978 5,165 6,538 3,499
Standard Deviation 3,535 4,369 2,557 2,142 3,488 3,906 1,963
Minimum 2,640 1,180 1,060 780 780 1,060
Maximum 14,646 7,980 7,141 14,646 14,646 7,126
Average percent producer paid Percent
61 55 47 43 49 53 44
N 3 10 5 13 31 17 14

 

 

 

 

 

 

 

 

 

 

*Producer Cost = (Amount paid)
"Minimum and maximum values are not reported if N is less than 4.
”*Producer + taxpayer Cost = (Producer cost) + (Cost-share dollars)

Producer plus taxpayer and producer costs for writing the CNMP have increased
over time (Table 5.2), while the producer’s cost increased only slightly. The early
producers had about $1,900 less in costs compared to the later veriﬁed producers; and,
the early adopters received more cost-share (52 percent compared to 45 percent). The
earliest veriﬁed producers, those producers that were veriﬁed in 2002, paid the largest
percentage out-of-pocket at 62 percent, possibly due to less available EQIP cost-share
and perhaps the earliest plan writers tended to have higher prices (Rector, personal
communication, December, 2005).

Producer plus taxpayer and producer costs for writing the CNMP were related

positively to the number of animal units on the operation, both had a 0.77 correlation.

72

The more animal units on an operation, the more cropland or spreading agreements that
was required within a CNMP. There was a negative correlation between the number of
advisory resources used and the cost a producer paid for the CNMP (r = -0.40). When
producers sought more assistance from various advisors, the producers gathered more
information for the CNMP and knew in advance where and how to obtain ﬁnancial

assistance.

Table 5.2: Cost to Write the Comprehensive Nutrient Management Plan by Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year the Farm became MAEAP Veriﬁed Early Late
2002 2003 2004 2005 Veriﬁed Veriﬁed
roducer cost*:
NMP 2004 Dollars
Average 2,985 1,142 3,021 2,108 2,134 2,818
Standard Deviation 2,464 1,181 3,292 977 2,129 2,934
Minimum 341 165 320 800 165 320
Maximum 6,162 3,302 8,600 3,030 6,162 8,600
Eroducer + taxpayer
ost**: CNMP 2004 Dollars
Average 4,231 3,904 6,047 5,608 4,080 5,949
Standard Deviation 2,055 2,478 4,366 3,363 2,167 4,075
Minimum 1,771 1,197 780 2,640 1,197 780
Maximum 7,126 6,914 14,646 9,030 7,126 14,646
[Percent producer paidl Percent
62 25 54 47 45 52
N 7 6 14 4 13 18

 

 

 

 

 

 

 

 

*Producer Cost = (Amount paid out-of-pocket)
"Producer + taxpayer Cost = (Producer cost) + (Cost-share dollars)

 

The average hours a producer spent collecting information for writing the initial
CNMP remained nearly constant over all years. Over the past four years of MAEAP’s
inception, however, it took less time for a producer to become MAEAP veriﬁed. The

veriﬁcation process took nearly nine fewer months for the producers that started their

CNMP in 2003 or later (Table 5.3).

73

Table 5.3: Amount of Time to become MAEAP Veriﬁed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Started Started

CNMP CNMP

Before After

Beef Dairy Poultry Swine Total CAFO AFO 2003 2002

umber of years
obecome
AEAP verified Years

Average 1.2 1.9 0.8 1.1 1.3 1.3 1.4 1.6 0.9
Standard Deviation 0.3 1.1 0.3 0.7 0.8 0.8 0.9 0.9 0.4
Minimum* 0.3 0.5 0.5 0.3 0.3 0.5 0.5 0.3
Maximum 3.5 1.3 2.6 3.5 3.5 3.0 3.5 2.0
N 3 10 5 13 31 17 14 20 ll

 

 

 

 

 

 

 

 

 

 

 

 

'Minimum and maximum values are not reported if N is less than 4.

In the early stages of MAEAP, there were not many qualiﬁed or experienced plan
writers and many MAEAP partners were learning the best methods to assist producers.
As the plan writers gained experience, it took them less time to write a CNMP. The
shorter veriﬁcation time for operations that began their CNMPs in 2003 and 2004
probably was due to the plan writers, MDA veriﬁers, and MAEAP partners’ experience,
which allowed for more accurate assistance. The shortened time frame did not,
necessarily save the producer CNMP writing costs. The plan writers stated that the price
of the CNMP included the time the plan writer spent writing the plan, but also depended
on the number of animal units per farm, number of acres that the farm operated, and
quality and amount of records kept prior to seeking veriﬁcation.

5.3 Cost of Implementing the Required Management Changes

Aﬁer the CNMP was written, the livestock producers implemented the required

changes before becoming MAEAP veriﬁed; thus, a second set of costs included

management and capital changes that a producer made to implement the CNMP. The

management changes may have included additional recordkeeping, changing feeding

74

programs, hiring a crop consultant, taking more manure and soil tests, hiring additional
labor, increasing supervision hours, changing the insurance premium, hauling manure
further, selling manure, using more energy to run fans or pumps required for the manure
storage and spreading, or buying and spreading different amounts of commercial
fertilizer.

The average producer needed to change 6.9 of these practices in his/her
management routine (Table 5.4). The correlation between the number of management
changes made and the cost of making the changes was weak (r = 0.26). Some
management changes required a large expenditure, while other changes required minimal
expenditure.

Table 5.4: Managerial Changes made due to MAEAP Verification

Beef I Dairy IPoultryl Swine I Total [CAFoI AFO
'Managerial changes“ #

Average 5.7 6.9 6.6 7.2 6.9 7.2 6.5
Standard deviation 1.2 2.1 3.0 3.0 2.5 2.7 2.4

 

 

 

 

 

 

 

Minimum" 3.0 2.0 2.0 2.0 2.0 3.0
Maximum 10.0 10.0 12.0 12.0 11.0 12.0
N 3 10 5 13 31 17 14

 

 

 

 

 

 

 

 

 

 

I"Management changes included: crop consultant/T SP, manure spreading hours, supervision hours,
recordkeeping, commercial fertilizer purchased, equipment usage, fuel, energy/utilities, insurance, manure
sold, manure testing, soil testing, and feed rations

"Minimum and maximum values are not reported if N is less than 4.

The most common managerial changes made included hiring a crop consultant or
a technical service provider (TSP) (100 percent), breadth of manure records kept (90
percent), and changing the amount of fertilizer bought (55 percent). A livestock producer
may have had a crop consultant prior to becoming MAEAP veriﬁed, however due to the
CNMP and updating this document, the crop consultant charges an additional fee. Most

livestock producers kept records prior to MAEAP veriﬁcation, but 90 percent of the

75

producers interviewed needed to keep additional records or spend more time keeping
more detailed records. A change in fertilizer costs did not necessarily mean the operator
used less fertilizer. One operation had too high phosphorus levels and could not apply
manure; thus, more nitrogen was purchased. However, 82 percent of the producers that
changed the amount of commercial fertilizer applied, indicated that they observed a cost
savings.

All but three livestock producers interviewed had an increase in the number of
hours they spent keeping manure records. This outcome was expected due to the detail
needed to account for all manure nutrients on the farm. Of the different records required
for MAEAP-veriﬁed farms, 90 percent of the producers needed to add additional labor
hours or keep additional records regarding one or more of the following: manure spreader
calibrations (52 percent of all farms), freeboard height in the lagoon (48 percent), the soil
conditions when spreading (48 percent), time of manure application (42 percent), the
weather conditions when spreading manure (39 percent), and the level of manure
nutrients (16 percent). Eleven producers claimed they spent at least double the time
keeping records as they spent before becoming MAEAP veriﬁed.

Many management changes affected the way producers dealt with manure; they
implemented or are still looking for alternative methods to use the manure. Some
managers were investigating methane digesters, composting, changing bedding material,
and/or marketing the manure at the time of the interview. Producers could decrease the
total amount of manure needed to be spread by changing animal diets, decreasing the
amount of wasted feed and water, and diverting rainwater to a separate storage unit (i.e.,

keeping clean water clean).

76

Diet changes most commonly occurred with the swine and poultry operations (15
and 20 percent respectively) as these operators took advantage of a feed additive,
phytase. When phytase was added to poultry and swine feed mixtures, it improved
phosphorus use efﬁciency, decreasing the amount of phosphorus in manure by up to 40
percent (U SDA-NRCS, 2005). In dairy and beef, it was more difﬁcult to decrease the
phosphorus excreted, as the protein source needs to be changed; thus, the producer could
not simply add a feed supplement.

If diet changes did not result in a decrease of the needed amount of phosphorus in
the manure, the manure may have been applied or incorporated differently to decrease its
runoff potential. Fifteen producers made this management change as part of their
MAEAP veriﬁcation. One dairy producer has fewer no-tilled ﬁelds aﬁer veriﬁcation,
because he needed to incorporate his manure. Incorporating manure decreased the
potential for phosphorus to immediately run into a body of water; however exposed soil
may have caused adverse erosion effects — depending on soil type and slope. Thus, the
suitability of tillage after manure application was evaluated on individual ﬁelds by the
plan writer prior to writing the CNMP.

Another dairy producer increased the amount of rain, wash water, and lot runoff
collected and then irrigated, which decreased the amount of liquids that needed to be
spread from the manure storage. Often the rain, wash water, and lot runoff contained
little phosphorus nutrient value. If these liquids were to be mixed in the manure storage,
they would only dilute the manure nutrient value, which would increase the cost per
pound of nutrients it took to spread the manure. However, because of the increased

quantities of water introduced through irrigation, the potential for runoff may also be

77

greater in the irrigated areas (Gilley, Risse, & Eghball, 2002). Slope, crop residue, and
soil type were also considered by the plan writer before additional irrigation was
installed.

Some producers also spent more time and money to keep manure and soil nutrient
records. MAEAP elevated a producer’s awareness of the importance in testing manure
and soil for their nutrient value; after implementing the CNMP, 74 percent of operations
needed to increase the frequency of either the soil fertility test, manure nutrient test, or
both. Until recently, it was common practice to spread manure more frequently on ﬁelds
close to the manure production or storage site (barnyard), due to weather or time
constraints. As animal production increased over time, this practice caused the ﬁelds
closest to the barnyard to have a higher soil nutrient content. To curb this over-
application problem, the CNMP matched the ﬁeld’s nutrient capacity with the
phosphorus manure spreading rates.

The interviewed producers currently spread 73 percent of their manure less than
two miles away from the barnyard, if the producer owned the acreage. If the land was
rented, producers, on average, hauled 45 percent of their total manure further than two
miles from the barnyard. Five producers traveled over eight miles away from the
barnyard to ensure they were spreading at agronomic rates.

When manure and soil records were reviewed, it was critical that the manager
apply the manure to the ﬁelds according to agronomic rates. Due to land constraints, ten
of the 31 livestock operations surveyed have more than 25 percent of their manure sold
off-farm. Those constraints were either due to lack of land base, or the land base they

currently managed had a phosphorus level too high to be able to spread manure. If a ﬁeld

78

had a soil test phosphorus level above 150 ppm, the CNMP did not allow more manure to
be spread, a requirement which is in accordance with the GAAMPs. If the ﬁeld had a
level below 75 ppm, the ﬁeld could have manure spread according to nitrogen
recommendations. The CNMP stipulated that, if soil tests that were between 75 and 150
ppm, they could only be spread according to the phosphorus recommendations.

Thirteen livestock producers did not need to sell any manure because they
previously accounted for manure’s phosphorus and nitrogen content when they applied
nutrients to the soil. Forty-two percent of the livestock producers had applied no
commercial phosphorus to the soil the past several years. During the past growing season
only six crop producers spread any amount of commercial phosphorus. The decreased
commercial phosphorus spreading was attributed to the additional soil and manure data
producers acquired for their ﬁelds. Aﬁer implementing the CNMP, 14 producers
increased their frequency of manure testing. If the producer did not test his/her manure,
he/she could estimate the amount of phosphorus excreted in the manure; this estimate
was used to determine ﬁeld manure-application rates.

Table 5.5 lists the average costs of managerial changes that resulted from
implementing the CNMP. Due to commercial fertilizer savings that many livestock
producers realized, a negative number may appear in Table 5.5 to convey a cost savings,
while the expenses incurred due to following the CNMP were positive numbers; all
amounts were in 2004 dollars. The costs or savings listed in Table 5.5 may be

experienced each year.

79

Table 5.5: Average Managerial Change Costs

 

Beef ] Dairy ]Poultry] Swine] Total ICAFO] AFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2004 Dollars

Recordkeeping labor 458 1,322 1,083 1,23 7 1,164 1,462 803
Standard deviation 184 1,933 355 1,229 1,344 1,628 804

Crop consultant/T SP 188 2,470 495 806 1,233 1,801 544
Standard deviation 105 3,011 338 632 1,920 2,434 525

Fertilizer bought

(nitrogenL -7,397 -5,550 11,000 -2,827 -1,918 -2,564 -1,132
Standard deviation 12,811 17,551 19,494 3,765 13,973 18,907 3,066

Fertilizer bought

(phosphorus) -2,940 -1,3 81 0 -343 ~874 -1,554 -48
Standard deviation 5,092 3,753 0 828 2,644 3,463 179

Manure testing

frequency 36 92 1 1 12 42 69 13
Standard deviation 52 153 25 16 97 128 27

Spreading labor 584 3,130 530 677 1,435 2,393 273
Standard deviation 1,012 7,795 7,583 1,393 5,306 7,078 815

Fuel use (hauling

manureL 0 4,514 1 1,416 1,727 4,022 7,056 337
Standard deviation 0 7,987 24,399 3,155 10,751 13,863 1,882

Insurance premium -13 ~101 -60 -43 -62 -88 -29
Standard deviation 22 226 134 63 142 186 44

Soil testing frequency 0 602 308 142 304 453 122
Standard deviation 0 1,897 309 287 1,084 1,446 271

Equipment usage costs 87 1,341 4,006 92 1,126 2,043 12
Standard deviation 151 3,102 7,198 328 3,436 4,490 43

Supervision hours 0 451 432 231 312 482 106
Standard deviation 0 873 762 388 623 787 222

Manure sold 0 0 -4,500 0 -726 -l ,324 0
Standard deviation 0 0 10,062 0 4,041 5,457 0

Feed additives or diet

chagge 0 0 19,000 58 3,089 5,630 3
Standard deviation 0 0 42,485 196 17,058 23,031 12

Energx& utilities 0 0 10,000 0 1,613 2,941 0
Standard deviation 0 0 16,492 0 7,088 9,490 0

Producer's annual

managerial change

costs -8,952 7,348 54,504 1,867 1 1,078 19,338 1,048
Standard deviation 16,878 11,562 96,131 4,926 41,129 54,868 3,589

N 3 10 5 13 31 17 14

 

 

 

 

 

 

 

 

 

The greatest average savings due to implementing the CNMP was a decrease in

nitrogen fertilizer costs (-$1,9l8). The largest savings to a producer was -$55,000 while

80

the largest increase in commercial fertilizer cost was $45,000. No producer saw a
decrease in their crop yields due to the decreased amount of commercial fertilizer
applied. Poultry producers were the only operators to add commercial fertilizer as a
result of becoming MAEAP veriﬁed. These same producers needed to sell their manure
due to ﬁeld phosphorus levels and could not use the manure for its nitrogen content. All
poultry producers were not applying commercial phosphorus before becoming MAEAP
veriﬁed and thus, saw no savings from less phosphorus purchased. No operator increased
the amount of purchased phosphorus due to MAEAP veriﬁcation.

The producer’s average overall costs were decreased as a result of additional
manure sold (-$726), less commercial phosphorus fertilizer purchased (-$874), and lower
insurance premiums (—$62). The largest average management change expenses, as listed
in Table 5.5, were increased fuel usage ($4,022), feed additives ($3,089), and additional
energy ($1,613). Fuel costs had a broad range, -$15,580 to $45,000, producers increased
fuel usage because they needed to incorporate the manure after application and/or the
manure needed to be hauled further. However, some producers saw a cost savings from
using less fuel; these producers spread less commercial fertilizer, began irrigating the
liquid layer off the top of the storage, or switched to a spreader that knifed in the manure
instead of a broadcast application, which eliminated the extra tractor time to incorporate.
The energy and utility fees increased due to the added cost of drying manure, speciﬁcally
poultry. Drier manure could be hauled at a lower cost, with fewer trips causing less
machine wear. As energy prices increase this added cost will most likely increase.

Soil testing did not always increase the cost of becoming MAEAP veriﬁed. If an

Operator tested the soil more often than once every two or three years, he/she no longer

81

needed to soil test as much as before MAEAP veriﬁcation. One operator saved $56 on
soil tests. Another operator that had not tested his soils recently needed to have all his
operated acres soil tested in order to accurately write his CNMP, which cost him $6,000.

Beef producers saved almost $9,000, on average, when they changed their
management processes for MAEAP veriﬁcation. The savings was primarily due to a
decrease in the amount of fertilizer purchased. Poultry producers spent the most money
on management changes ($54,504) to become MAEAP veriﬁed. The increase in costs
came from four main sources: an increase in fertilizer purchased, adding phytase to diets,
hauling manure further (equipment usage and fuel cost increases), and using more energy
to dry manure.

CAF O managers spent more money, on average approximately $18,000 more,
than AF Os to implement their CNMPs with only slightly more management changes (7.2
compared to 6.5). The more animal units a producer operated, the more likely he/she was
to spend more money on management changes (r = 0.78).
5.4 Cost of Implementing the Required Capital Investment Changes

In addition to the management changes, a MAEAP-veriﬁed operation typically
needed to make some capital investment changes. The capital investment costs included
new machines (for manure transport, or spreading manure or water collected from the
milk house, leachate, and roofs) and improvements or new construction (for manure
storage, drainage, gutters, fences, buildings, roofs, grass waterways, buffers, and
drives/berms).

The most common implementation change was additional or larger manure

storage (39 percent) followed by more manure spreading (or irrigation) equipment (26

82

percent) (Table 5.6). Half of all the recorded manure storage investments were from
dairy producers; six out of the ten dairy producers interviewed increased their manure
storage for MAEAP veriﬁcation. One swine producer stated, “It is cheaper to build
another earthen lagoon than to spread the manure that is currently in my lagoon.” If more
storage was built, then the manure in the old storage would not have to be spread as
frequently; as often in his situation, this operator needed to spread manure up to four
miles away and had relatively small tanks, which meant many trips from the ﬁeld to the

manure storage.

Table 5.6: Percent of Producers to Make Each Capital Investment Change, Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef LDaig | Poultry ] Swine FTotal 1 CAFO l AFO
Percent
[Manure storage 33 60 20 31 39 47 29
quipment to spread
anure 67 30 0 23 26 35 14
[Drainage 67 20 0 8 16 18 14
ences 0 30 0 15 16 29 0
Grass waterways 33 20 20 8 16 12 21
Gutters 67 20 0 8 16 18 14
anure transportation 0 10 40 8 13 18 7
[Buildings 33 10 o 15 13 6 21
[Drives and berms 67 20 o 0 13 12 14
[Buffers o 10 o 15 1o 0 21
lRoofs 0 0 0 8 3 0 7
Capital investment
changs Number of changes adopted
Average 3.7 2.5 0.8 1.5 1.9 2.2 1.6
Standard deviation 2.1 1.4 0.8 1.6 1.6 1.7 1.6
Minimum“ 1.0 0.0 0.0 0.0 0.0 0.0
Maximum 5.0 2.0 5.0 6.0 5.0 6.0
N 3 10 5 13 31 17 14

 

 

 

 

 

 

 

 

 

1"Minimum and maximum values are not reported if N is less than 4.

 

To become veriﬁed, manure storage must have accounted for freeboard height, as
well as any extra water collected from lot runoff, silage leachate, and milk house or egg

wash water. Prior to becoming MAEAP veriﬁed, only 48 percent of the operations’

83

storage had at least six months of capacity or demonstrate that manure application could
be managed at low risk if less than six months was available. On average, operations
constructing new manure storage increased the operations’ holding capacity by 10
months. These improvements were larger than necessary by current standards, but the
expansion allowed the producer to achieve economies of scale and avoid rebuilding to
meet more stringent standards or expansion needs should they emerge in the ﬁrture.

The costs indicated in Table 5.7 were the costs in 2004 dollars that producers paid
annually to implement their capital investments. Each capital investment change
implemented was depreciated over time. The depreciation schedule varied with the type
of capital investment. This depreciated amount was the amount that the item cost the
producer each year. The capital investment costs were self reported during the interview,
as was the amount of cost-share. The twelve operations that changed manure storage
spent an average of $1,678 annually. Manure storage was the largest expense for CAFOs
($2,773), but the fourth largest expense for AFOs ($348). Although only four farms
purchased additional machines to transport manure, this category had a large annual
average cost ($943).

Large operations spent about twice the amount of money annually on capital
investments as small and medium operations spent ($4,659 as compared to $2,382) and
made nearly the same number of changes (2.2 as compared to 1.6). CAFOs made more
capital investment changes that were not eligible for EQIP cost-share; MAEAP does not
require new machines or equipment for veriﬁcation. Producers that purchased equipment
did so based on their own criteria. Additional equipment to spread manure and machines

to transport manure were most commonly purchased by CAFOs. The type of investments

84

large CAFOs made — as opposed to AF Os — raised the cost to the producers.

Ten

producers, seven of which were CAFO operators, purchased machines or equipment to

handle the distance and amount of manure transported. Often the older equipment would

take a long time to empty the storage or require additional trips back and forth from the

barnyard to the ﬁeld.

Table 5.7: Average Annual Producer Capital Investment Changes

 

Camital Investment Change

Beef ] Dairy [Poultry] SwineTTotal [CAFO] AFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2004 Dollars
[Manure storage 119 3,958 1,400 391 1,678 2,773 348
[Equipment to spread manure 434 685 0 494 470 569 350
[Drainage 21 1 250 o 21 110 163 45
[Fences 0 76 0 191 105 191 0
Grass waterways 119 51 3 l 29 7 55
Gutters 126 33 0 1 23 18 29
[Manure transportation 0 100 5,500 56 943 926 964
Euildings 91 4 0 460 203 3 447
[Drives and berms 122 18 o 0 18 8 29
[Buffers 0 150 o 6 51 1 112
[Roofs 0 0 0 l 0 0 l
E’roducer's annual capital -
'nvestment cost 2004 Dollars
Average 1,222 5,326 6,903 1,625 3,631 4,659 2,382
Standard deviation 670 5,748 6,881 2,864 4,960 5,554 3,968
Minimum” 400 0 0 0 0 0
Maximum 16,500 14,000 8,227 16,500 16,500 13,515
N 3 10 5 13 31 l7 l4

 

 

 

 

 

 

 

 

*Minimum and maximum values are not reported if N is less than 4.

Becoming MAEAP veriﬁed prompted 27 of the 31 livestock operations surveyed

to make capital investments.

Poultry producers made the fewest capital investment

changes (0.8), but spent the most money on average ($6,903). The number of changes an

operation needed to make however, was not correlated (-0.01) with the annual producer

cost of the capital investments.

85

 

The early veriﬁed operations, those operations that were veriﬁed before 2004,
paid nearly $2,500 less out-of-pocket annually than the later adopters for their capital
investment changes on average (Table 5.8). The operations that were veriﬁed before
2004 had, on average, fewer animal units, less costly required changes, and the more

required changes that were eligible for EQIP cost-share funds.

Table 5.8: Annual Producer Capital Investment Changes Cost Over Time (year
stated is year veriﬁed)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Early Late
2002 2003 2004 2005 Verify Verify
2004 Dollars
[Buffers 10 0 1 375 5 84
Manure storage 1,114 232 1,893 3,813 707 2,320
[Ecglipment to spread manure 857 17 339 838 469 450
[Drainage 71 55 0 625 64 139
[Fences 321 2 46 25 174 42
Grass waterways 0 58 8 100 27 29
Gutters 36 66 1 0 50 1
[Manure transportation 100 0 1,964 250 54 1,583
[Buildings 250 667 0 1 1 442 2
[Drives and berms 0 63 10 0 29 8
[Roofs 0 0 1 0 0 1
[Producer's annual cost 2004 Dollars
Average 3,000 1,255 4,278 6,036 2,195 4,668
Standard deviation 3,290 1,948 5,728 7,347 2,795 5,931

 

Producer's annual cost per
animal unit 2004 Dollars per Animal Unit

 

 

 

 

 

 

 

 

 

 

 

 

Average 4.81 8.39 3.52 3.63 6.46 3.55
Standard deviation 5.99 13.14 8.88 2.08 9.66 7.82
Capital investment changes Number of changes made .
Average 2.0 2.5 1.4 2.8 2.2 1.7
AF 0 N 5 3 4 2 8 6
CAFO N 2 3 10 2 5 12
Total N 7 6 14 4 13 18

 

 

 

 

 

 

 

 

 

Forty-eight percent of the changes the later producers made were eligible for cost—
share as compared to 72 percent of the early producers’ changes. In years 2002, 2004

and 2005, cost-share paid for approximately 15 percent of the total costs. However, in

86

2003 the average producer received nearly 50 percent of the total cost for implementing
their capital investment changes. There were eight veriﬁed operations in 2003; six of
those operations were surveyed for this research. Furthermore, EQIP cost-share funds
available in Michigan increased from $6,811,000 in 2002 to $9,727,900 in 2003
(MacMaster, personal communication, November 2005); thus there was a large amount
of EQIP funds available and fewer producers eligible to receive the funds as compared to
other years.

The early veriﬁed operations on average Spent the most capital investment on new
manure storage ($707), equipment to spread manure ($469), new buildings ($442), and
fences ($174) (see Table 5.9). Farm locations with minor changes appeared to have been
more likely to become MAEAP veriﬁed earlier as the producer had an easier
implementation schedule and fewer associated costs. Although the earlier producer spent
less on average, they spent nearly double the money per animal unit to become veriﬁed
($6.46 compared to $3.55). More CAFOs became veriﬁed after January 1, 2004 as
compared to before. The larger number of animal units also decreased the average cost
per animal unit for the later producers as shown in Table 5.9.

The operations that became veriﬁed after 2003 made more costly investments in
manure storage ($2,320), manure transporting equipment ($1,583), and equipment to
spread manure ($450). AFO livestock producers implemented a larger portion of the
capital investment changes themselves relative to the CAFOs to save on the costs. For
example, one small dairy producer, because of an illness, was waiting to obtain MAEAP
veriﬁcation because he needed to do some of the work himself in order to afford the

required changes.

87

The four producers that became MAEAP veriﬁed in 2005 had the most expensive
capital investment changes to make on average, $6,036. These producers spent the least
per animal unit at only $3.63, with a comparatively narrow range of $0.52 to $4.85.
However, all the 2005 veriﬁed producers that were interviewed had been seeking
MAEAP veriﬁcation for at least two years, as they each began the MAEAP veriﬁcation
process before 2003. Some of the earliest costs may have been overlooked in the
interview due to the long timeframe.

5.5 Cost-Share

Cost-share assisted livestock producers in paying for their CNMP and some of
their capital investments. The producers seeking cost-share had to ﬁll out an application
to receive ﬁrnds. Three livestock producers speciﬁcally mentioned the difﬁculty they had
in applying for and receiving EQIP cost-share dollars. Some operators interviewed were
hesitant to apply for capital investment EQIP money for two reasons: 1) The operator did
not want to spend his time completing the lengthy application for the government money;
and/or, 2) many livestock producers did not want to inform governmental agency staff
about what changes they were making on the farm. While 23 producers received
assistance to write the CNMP, only eight received EQIP cost-share for the capital
investment changes. The cost-share total for these eight producers was $419,823. An
application for capital investment cost-share dollars required a more detailed description
and took longer to ﬁll out. It should be noted that funds from EQIP could not be used for
any of the management changes cost and they were available for only some of the capital
investment changes cost. There were nine producers that were not eligible for any capital

investment cost-share dollars due to the fact that the changes they needed to make on

88

their operation (i.e., machinery, equipment, and management changes) were not eligible
for cost-share.

From Table 5.9, many operators were eligible to obtain cost-share, but only a
small percentage of the eligible cost—share was actually obtained. EQIP was a means of
cost-share but did not pay for 100 percent of any capital investment. In Table 5.9, the
investments eligible for EQIP cost-share (i.e., manure storage, drainage, fences, grass
waterways, gutters, buildings, drives/berms, buffer strips, and roofs) totaled 61 percent of
all capital investments costs. The difference between the amount of eligible cost-share
and the amount of cost-share realized signiﬁed the amount a producer paid out-of-pocket
for his/her capital investments to become MAEAP veriﬁed. While CAFOs could have
received more cost-Share, they only received eight percent of the total amount eligible for
cost-share. The average AF 0 received approximately $11,000 more in EQIP cost-share
funds than the average CAF O. Some of the operations that spent the most money did not

receive any cost-share; however, these operations most likely did not apply for EQIP.

Table 5.9: Cost-Share Received Compared to Capital Investments Eligible for Cost-
Share

 

 

 

 

 

 

 

 

 

 

 

 

Total I CAFO [ AFO
2004 Dollars
Total cost of eligible cost-share
capital investments 57,895 66,162 44,805
Percent
Percent cost-Share eligible 61 [ 55 ] 71
2004 Dollars
Amount of cost-share realized 13,543 [ 9,325 I 20,221
Percent
Percent cost-share realized 14 8 23
N 31 17 14

 

 

 

 

 

 

The cost of the capital investments implemented ranged from $0 to $16,500

annually (Table 5.10). On average, producers paid about $3,631 annually for capital

89

investments to become and remain MAEAP veriﬁed. In total, the poultry producers
spent the most money, $6,903 out—of-pocket and, including cost-share, $8,303. The
dairy, poultry, and swine producers paid over 90 percent of their capital investment costs
out-of-pocket. The swine producers had the lowest average annual producer plus
taxpayer capital costs ($2,125), and received the least in average EQIP cost-share ($333

annually). The small and medium Operations spent almost half as much money out-of-

pocket ($2,3 82) on average as compared to the large operations ($4,659).

Table 5.10: Annual Capital Investment Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef [ Dairy [Poultry] Swine 1 Total [ CAFO [ AFO
Producer plus
taxpayer“ annual
capital investment
costs 2004 Dollars
Average 3,235 5,823 8,303 2,125 4,422 5,368 3,272
Standard Deviation 3,491 5,842 7,582 3,407 5,381 6,076 4,333
MinimumM 704 0 0 0 0 0
Maximum 16,500 14,000 8,908 16,500 16,500 13,515
Producer*** annual
capital investment
costs
Average 1,222 5,326 6,903 1,625 3,631 4,659 2,3 82
Standard Deviation 670 5,748 6,881 2,864 4,960 5,554 3,968
Minimum 400 0 0 0 0 0
Maximum 16,500 14,000 8,227 16,500 16,500 13,515
Percent producer
aid Percent
Average 59 91 90 90 87 92 81
Standard Deviation 37 19 22 20 23 18 27
Minimum 50 50 40 28 50 28
Maximum 100 100 100 100 100 100
N 3 10 5 13 31 17 14

 

" Producer + taxpayer = Annual producer capital investment costs + capital cost-share dollars
"Minimum and maximum values are not reported if N is less than 4.
*"Producer = Annual capital investment costs

 

From the interview data collected, the average AFO received about the same in

cost-share as the average CAFO (Table 5.11). A larger cost-share amount was expected

90

for the smaller operations as they had larger relative costs associated with becoming

MAEAP veriﬁed.

If evaluated on a per animal unit basis, however, AFOs received

nearly 16 times more money per animal unit as the CAFOs received. AF Os typically did

not have the resources to implement capital investments, thus EQIP cost-share was more

sought after by the small and medium operations than the large operations.

If an

operation was a CAFO, there was a negative correlation to the amount of cost-share

received per animal unit (r = -0.30).

Table 5.11: Total Cost-Share per Species, Operation Size, and Veriﬁcation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Categories
Early Late
Beef Dairy Poult Swine Total CAFO AFO Verify Verify
Total cost-share 2004 Dollars
Average 36,907 11,988 30,675 9,039 16,177 15,994 16,400 16,837 15,700
Standard
Deviation 52,947 25,400 63,121 16,155 33,497 38,312 27,976 29,094 37,174
Total cost-
Ishare/A.U. 2004 Dollarsper Animal Unit
Average 405.98 9.26 9.22 26.69 54.96 7.10 113.07 119.06 8.66
Standard
Deviation 481.66 19.98 14.76 69.43 176.79 17.02 255.23 264.76 16.33
Minimum“ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Maximum 65.08 34.47 251.09 938.19 65.08 938.19 938.19 65.08
N 3 10 5 13 31 17 14 13 18

 

 

 

 

 

 

 

 

 

 

 

 

*Minimum and maximum values are not reported if N is less than 4.

Swine producers received the lowest cost-share amount on average. Per animal
unit, however the swine producers received $26.70 in cost-Share, nearly three times the
amount dairy and poultry producers received per animal unit. Beef producers on the
other hand, received $406 per animal unit on average. Most of the money beef producers
received was given to the small, pasture-based operators for winter manure storage,

increasing the per animal unit average.

91

The total amount of cost-share given to early and late veriﬁed farms remained
nearly the same. However, early producers received more cost-share per animal unit than
did the later producers that became MAEAP veriﬁed ($119.06 compared to $8.66).

If a producer received cost-Share, their reason for becoming MAEAP veriﬁed was
more likely linked to the ﬁnancial and technical support MAEAP offered (0.4
correlation). The incentive of ﬁnancial and technical assistance motivated 26 percent of
the interviewed producers to become'MAEAP veriﬁed. There was also a correlation of
0.38 between the amount of EQIP funding and total producer plus taxpayer cost of
implementing the capital changes, although weak, it indicated that the producers that
received EQIP funding were those operators that had more costly investments. This
correlation could also be ampliﬁed due to the producers that received cost-share,
implemented capital investments of higher quality or larger scale than necessary. One
operator that received cost-share put in larger manure storage than necessary simply
because he received cost-share for the investments; thus, the cost producer plus taxpayer
paid for the storage was increased, raising the producer’s annual cost only slightly.

5.6 Total Cost to become MAEAP Veriﬁed

Total costs shown in Table 5.12 include the cost of writing the CNMP, plus
implementing the management and capital investment changes to become MAEAP
veriﬁed. Any cost-share received by a producer is not reﬂected in Table 5.12. The
management changes incurred on each farm could have been negative, due to a cost
savings through less fertilizer purchased, a lowered insurance liability fee, or less driving
to spread or incorporate manure. The annual costs did not include the CNMP price, as

the initial cost to write a CNMP was a one-time fee and the cost to update the CNMP was

92

typically less than the initial CNMP writing cost. An annual fee associated with updating

the CNMP was included in the managerial costs as the crop consultant/T SP cost.

Table 5.12: Total and Annual “Producer + Taxpayer” Costs to become MAEAP
Veriﬁed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef 1 Dairy [ Poultry [Swine [ Total [ CAFoi AFO
2004 Dollars per Operation
Total producer +
taxpayer CNMP
cost* 3,054 7,507 4,835 3,978 5,165 6,538 3,499
Standard deviation 3,535 4,369 2,557 2,142 3,488 3,906 1,963
Total managerial
changes cost“ -31,140 32,962 201,236 7,715 43,312 75,300 4,470
Standard deviation 60,370 58,326 340,961 23,629 149,276 197,759 18,070
Total producer +
taxpayer capital
investment cost 55,949 107,223 1 11,060 33,877 72,122 91,141 49,028
Standard deviation 67,110 111,119 116,870 53,572 91,088 109,532 57,738
Total producer +
taxmayer cost 27,862 147,693 317,131 45,571 120,600 172,979 56,996
Standard deviation 112,867 122,480 363,192 44,796 183,635 233,137 54,579
2004 Dollars er Operation per Year
Annual
managerial cost —8,952 7,348 54,504 1,867 1 1,078 19,33 8 1,048
Standard deviation 16,878 11,562 96,131 4,926 41,192 54,868 3,589
Annual producer
+ taxpayer capital
investment costt 3,235 5,823 8,303 2,125 4,422 5,368 3,272
Standard deviation 3,491 5,842 7,582 3,407 5,381 6,076 4,333
Annual producer
+ taxpayer cost -5,171 13,171 62,807 3,991 15,499 24,706 4,320
Standard deviation 18,865 12,333 98,714 4,066 43,040 57,045 4,938
N 3 10 5 13 31 17 14

 

 

 

 

 

 

 

 

 

*Total Producer + taxpayer costs = CNMP writing cost + CNMP cost-share dollars + producer capital
investment costs + capital cost-share dollars + present value of the managerial changes

"Managerial costs had a taxpayer cost of zero; only the producer cost was included.

TAnnual Producer + taxpayer costs = Annual capital investment cost + annual capital cost-share dollars +
managerial costs

The average total producer plus taxpayer cost to become MAEAP veriﬁed was
$120,600 per farm, reﬂecting both the cost-shared money paid to producers as well as the

producer’s out-of-pocket costs (Table 5.12). However, not all the changes reported by

93

producers were required by the MAEAP’S CNMP, such as some equipment purchases or
manure storage larger than necessary to meet GAAMPS. Thus, the $120,600 average per
farm is biased upwards from the minimal necessary to be veriﬁed. The average annual
producer plus taxpayer cost was $15,499. Swine operations had the lowest annual
producer plus taxpayer cost at $3,991.

The average annual and total producer plus taxpayer cost for poultry producers to
become MAEAP veriﬁed were the highest at $62,807, and $317,131, respectively. This
ﬁgure seemed to be an outlier because it was so large, but upon reviewing several of the
changes made on the ﬁve operations, three operations accounted for most of the large
numbers. Managerial changes (e.g., soil and manure testing, commercial fertilizer
purchased, feed additives, and supervision hours) were the main force in driving the
poultry operation’s cost higher than other farms. The operation with the most animal
units had the highest cost to become and maintain MAEAP veriﬁcation, but contrary to

expectations the producer had nearly the largest cost per animal unit as well.

94

Table 5.13: Total and Annual Producer Average Costs to become MAEAP Veriﬁed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef [ Dairy 7 Poultry ] Swina Total [ CAFO ] AFO
2004 Dollars per Operation
Total producer*
CNMP cost 1,992 4,082 2,160 1,605 2,531 3,382 1,498
Standard deviation 2,649 3,101 3,268 1,420 2,609 3,085 1,380
Total producer
managerial cost -31,140 32,962 201,236 7,715 43,312 75,300 4,470
Standard deviation 60,370 58,326 340,961 23,629 149,276 197,759 18,070
Total producer
capital
investment cost 20,104 98,661 83,060 27,21 1 58,579 78,304 34,628
Standard deviation 14,456 108,139 75,847 46,054 79,671 95,792 47,199
Total producer
cost -9,044 135,704 286,456 36,531 104,423 156,985 40,597
Standard deviation 68,702 120,536 372,102 40,947 181,491 231,241 46,910
2004 Dollars er Operation per Year

Annual producer
managerial cost -8,952 7,348 54,504 1,867 1 1,078 19,338 1,048
Standard deviation 16,878 11,562 96,131 4,926 41,192 54,868 3,589
Annual producer
capital
investment cost 1,222 5,326 6,903 1,625 3,631 4,659 2,3 82
Standard deviation 670 5,748 6,881 2,864 4,960 5,554 3,968
Annual producer
cost -7,730 12,673 61,407 3,492 14,709 23,997 3,430
Standard deviation 16,885 12,345 99,596 4,381 43,182 57,204 5,089

N 3 10 5 13 31 17 14

 

 

 

 

 

 

 

 

 

‘Total Producer costs = CNMP writing cost + producer capital investment costs + present value of the
managerial costs
"Annual Producer costs = annual capital investment cost + managerial costs

Table 5.13 outlines the total and annual costs producer’s paid; it is similar to that
of Table 5.12 which describes the difference in total and annual producer plus taxpayer

costs. Poultry producers spent the most both in total and annually. The large operations

95

also spent more than the small and medium operations did on becoming MAEAP

veriﬁed. The study conducted by NRCS did not conclude with these same ﬁndings”.

Table 5.14: Average Annual Producer Cost per Animal Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef 1 Dairy 1 Poultry [ Swine ] Total I CAFO [ AFO
Annual producer
cost/ A.U. 2004 Dollars per Animal Unit
Average 9.71 5.97 12.89 6.16 7.53 3.75 12.11
Standard Deviation 29.84 3.23 15.25 10.64 12.07 8.49 14.36
Minimum* 1.13 -0.31 -8.14 -24.74 -24.74 -8.14
Maximum 11.32 38.13 34.45 38.13 13.20 38.13
Annual producer +
taxpayer cost/ A.U.
Average 31.64 6.35 13.23 7.71 10.48 4.06 18.27
Standard Deviation 52.04 3.38 14.97 13.92 18.61 8.57 24.29
Minimum 1.13 -0.31 -4.53 -24.74 -24.74 -4.53
Maximum 1 1.44 38.13 49.40 77.82 13.20 77.82
N 3 10 5 13 31 17 14

 

 

*Minimum and maximum values are not reported if N is less than 4.

The average cost per farm does not explain the full picture. Upon examining the
costs more closely, annual producer cost per animal unit was much easier to compare
across size and species. The poultry producers had the largest average annual cost per

animal unit to become MAEAP veriﬁed at $12.89 (Table 5.14). Dairy operations paid

 

22 In a national study conducted by the USDA-NRCS, it was estimated that the annual average total cost of
a Michigan livestock producer to develop and implement a CNMP would be $7,322 with a range of $212 to
$73,160. The average annual total cost per animal unit was $35. These numbers can be contrasted with this
thesis study’s average, which was about $8,000 higher at $15,499, and which had a broader range of
-$27,211 to $235,838. The average annual total cost per animal unit of this thesis research was $25 lower
however, at $10 per animal unit. The USDA’s estimate did not account for feed management changes,
commercial fertilizer purchases, improved efﬁciencies, cost-share received, expanding the spreading
radius, or machinery and equipment purchases. Thirty of the thirty-one operations surveyed in this thesis
study ﬁt the USDA criterion. The USDA study estimated the Lake Region (Michigan, Wisconsin, and
Minnesota) as the cheapest region to develop and implement a CNMP. It should also be noted that the
“costs associated with the assemblage of farms and ranches were as of December 31, 1997 and have not
been adjusted for concentration and consolidation trends,” which may also skew the cost ﬁgures (USDA-
NRCS 2003). All data are reported in 2004 dollars.

96

the least per animal unit for veriﬁcation at less than half of poultry producers ($5.97).
Dairy also had the smallest standard deviation and range of costs.

CAFOs paid over a third of what AF Os paid annually for veriﬁcation per animal
unit, $3.75 compared to $12.11. The larger operations realized economies of size. The
EQIP cost-share especially impacted AF Os as the cost-share assisted these operators in
decreasing their cost per animal unit by $6.16. The beef producers that received cost-
share funds were typically small but the added beneﬁt lowered their cost by nearly
$20.00 per animal unit.

The costs of writing the CNMP were much less than the costs associated with
implementing the changes required for MAEAP veriﬁcation. The mean cost to write a
CNMP was two percent of the total cost of MAEAP veriﬁcation (Table 5.15). The
capital investment costs were larger than the managerial costs for the beef, dairy, and
swine producers. The managerial and capital investments were similar for CAFOS, but
the AF Os spent over seven times more on the capital investments than on managerial

changes.

Table 5.15: Comparing Writing, Managerial, and Capital Costs of the Total Cost to
Become MAEAP Veriﬁed, Averages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef [ Dairy [ Poultry [ Swine [ Total ] CAFO [ AFO
Percent
Total producer
CNMP cost 22 3 1 4 2 2 4
Total producer
managerial costs -344 24 70 21 42 48 1 1
Total producer
capital
investment cost 222 73 29 75 56 50 85
2004 Dollars
Total producer
cost -9,044 135,704 286,456 36,531 104,423 156,985 40,597
N 3 10 5 13 31 17 14

 

97

 

5.7 Costs per Geographic Region

According to the National Agricultural Statistics Service, in 2002 there was
6,827,903 acres of harvested cropland in Michigan; 5,423,039 acres (79 percent) received
commercial fertilizers, while 700,621 (10 percent) acres were spread with manure
(USDA-NASS, 2004). This statistic suggests that Michigan livestock producers have
enough available cropland to spread manure. However, livestock operations are not
evenly spread across the state. Livestock populations have become more spatially
concentrated in high production areas resulting in increased regional manure nutrient
production relative to the assimilative capacity of the land (Kellogg, Lander, Moffrtt, &
Gollehon, 2000).

Allegan County, for example, sold over half of the total number of broilers and
almost 20 percent of the hogs in the entire state of Michigan (USDA-NASS, 2004).
Considering only the number of cropland acres and the number of animals produced there
was not enough cropland in this county to spread all the manure; however, it is not
known where the manure is spread or if it is used for other purposes such as methane
digestion or composting. Other counties, such as Berrien, had thousands of acres in cr0p
production, but few animals.

The 3-digit zip code areas 494 and 488 produced the most animal units in this
study; however, the producers in these zip code areas did not pay the most on average,
per animal unit, for the MAEAP veriﬁcation process. As seen in Table 5.16, the
producers in the 490 zip code area (Barry, Branch, and Kalamazoo counties) paid the

most on average per animal unit to become veriﬁed ($272.17). The 494 zip code area

98

(Muskegon, Oceana and Ottawa counties) paid $124.55 per animal unit, and when

compared to other areas, this average cost was large.

Table 5.16: MAEAP Veriﬁcation Costs per Animal Unit Using the 3-Digit Zip Codes

 

 

 

 

 

 

 

 

 

 

3-digit

zip Total producer Annual producer
code N Counties cost/ A.U. cost/ A.U.
484 4 Huron, Newaygo, Sanilac 24.74 -3.81
487 5 Huron, Sanilac, Tuscola 39.10 7.28
488 6 Clinton, Ionia, Montcalm 78.16 5.69
490 3 Barry, Branch, Kalamazoo 272.17 17.61
492 3 Calhoun, Hillsdale, Lenawee 5.66 -1.02
493 1* Bagy, Isabella, Mecosta

494 8 Muskegon, Oceana, Ottawa 124.55 12.15
496 1* Lake, Missaukee, Osceola

 

 

 

 

 

 

‘ Information exists on these zip code areas. However, to maintain the producer 5 conﬁdentiality, these
costs were omitted from this table.

The average operation in the 492 area (Calhoun, Hillsdale, and Lenawee counties)
paid the least on a per animal unit basis ($5.66). Annually, however, the producers in the
484 zip code area (Huron, Newaygo and Sanilac counties) paid the least amount, saving
$3.81 per animal unit”.

5.8 Costs Compared to Gross Farm Revenue

The initial per farm cost to become MAEAP veriﬁed as a percent of gross farm
revenue was examined. It was found that the larger was an operation’s gross farm
revenue the smaller was the percent costs (Table 5.17). It was observed that the
operations with a gross farm revenue of less than $500,000 spent 2.77 percent of their
gross revenue on MAEAP related managerial and capital investment changes each year.

The producers with gross farm revenue greater than $2,000,000 paid the most for

 

23 The total producer cost per animal unit is not simply the number of cost divided by the number of animal
units because the initial cost of writing the CNMP was larger than the cost to update the CNMP.

99

veriﬁcation in absolute terms; however, these costs constituted a small percentage of

gross farm revenue (0.27%).

Table 5.17: Annual Producer Veriﬁcation Costs as Related to Cross Farm Revenue

 

 

 

 

 

 

 

 

Capital Managerial Annual
Gross farm Annual producer investment costs changes costs producer cost
evenue N cost/ animal unit as a percentage as a percentageas a percentage
2004 Dollars per
Animal Unit Percent
0 < 0.5 million 5 17.75 1.65 1.13 2.77
0.5 < 1 million 4 5.82 0.26 0.24 0.50
1 < 2 million 8 10.48 0.23 0.26 0.48
P 2 million 14 2.67 0.10 0.17 0.27

 

 

 

 

 

 

 

 

As revenue increased, the trend observed was a slight decrease in costs as a
percentage of gross farm revenue. The correlation between gross farm revenue and
producers’ annual veriﬁcation costs was positive (r = 0.63). However, previous research
has shown that the link between environmental and ﬁnancial performance appears to
stem primarily from the effect of environmental performance on ﬁnancial performance,
rather than the reverse (Alberini & Sergerson, 2002). This link is most likely related to
the amount of time the operator spends managing the details of the operation. An
increased environmental stewardship and attention to details of the operations is more
likely to lead to obtain a larger ﬁnancial return on that operation compared to operations
that do not practice environmental stewardship and spend less time on management of the
operation.

The costs of adopting the management and capital investment changes seemed to

increase at the same rate as the operation’s income increased as the slope was small

100

across all annual gross farm revenues (Figure 5.124). The equation of the trend line was y
= -7E-10x + 0.0101, where y is the cost of becoming MAEAP veriﬁed as a percent of
gross farm revenue and x is gross farm revenue. One AF 0 operator spent 6.79 percent of
his annual gross farm revenue on capital and managerial changes to become MAEAP
veriﬁed, while another AF 0 operator saved 0.28 percent of his annual gross farm revenue
by becoming MAEAP veriﬁed. On average, the CAFO operators spent 0.38 percent of
their annual gross farm revenue on implementing the CNMP, while the AFO operators
spent 1.58 percent. It was expected that a CAFO would spend a lesser percentage of
his/her annual gross farm revenue than an AF O, due to more personnel available to
implement the speciﬁc changes and the economies of scale a larger operation could

realize.

 

2" If the sample size were large and statistical analysis could be conducted, there would be two outliers
omitted 00111 the analysis as they were more than three standard deviations from the mean (greater than
5.35%). With the two outliers omitted, the linear relationship would slope slightly upward (y = 1E-10x +
0.0035). This relationship coupled with the relationship of Figure 5.1 indicates that the average producer’s
costs, as a percentage of annual gross farm revenue, decreased only slightly (less than 0.5 percent), if at all,
for all revenue levels, regardless of species or size.

101

Figure 5.1: Annual Producer Cost as a Percent of Gross Farm Revenue

 

 

 

 

 

 

 

7.00% ,
-Lw LL L L L z _ a z_ _.,,__-__,__._____, _ _
600% , ‘ y=-7E-10x+0.0101
5.00% 4 W W W W W W W W-W W W W WWW--W—-—---—~W-W ___._ W W
4.00%~W-W W W W W W W W W W W W W WW WW ,h__________,_.,
3.00%~~ AWW WW W WWWWWWWW in, v-2.._,2,__w
2.00%~~——~W WWWWWWWWW WWWWW7777-11_L
o , o
1.00% “ﬁt—ﬂ T— r—- — — W—W ——--— 4W —W W # __ _ _ ____,
O
000% :~%°’:I.. I ’ W WT
. . W
~1.00% dew-*3 W 1- W- W W -W WW -W W —-W WWW.._._2.___________
-2.00%

 

- 3,000,000 6,000,000 9,000,000 12,000,000 15,000,000 18,000,000

 

 

9 Gross Farm Revenue — Linear (Gross Farm Revenue)

 

 

 

 

5.9 Summary

Overall, the larger operations had larger gross farm revenues and had more costs
associated with MAEAP veriﬁcation. The cost to become MAEAP veriﬁed ranged from
6.79 to -1.10 percent of the operator’s annual gross farm revenue; the average was 0.76
percent. Because not all the changes reported by producers were required by the
MAEAP’S CNMP, such as some equipment purchases, the cost to become MAEAP
veriﬁed was biased upwards from the minimal necessary to be veriﬁed. CAFOS received
less in cost-share overall, but had more ﬁnancial and capital resources available to
implement some of the required changes. The management changes, speciﬁcally the
commercial fertilizer reductions, impacted the AFOS more than the CAFOS relative to

their total costs, but the reduced need for commercial fertilizer helped the average

102

operator save money. The poultry operations had the highest cost to become MAEAP

veriﬁed both for the producers and for the producer plus taxpayer groups.

103

Chapter 6: Environmental Outcomes from MAEAP Veriﬁcation

6.1 Introduction

Although there are many methods25 that could have been used to quantify the
level of environmental improvement achieved on livestock operations, this study used the
cropland phosphorus mass balance and the phosphorus index to calculate the
environmental change on the livestock operation that the producer linked to MAEAP
veriﬁcation. Some of the alternative or additional methods available to calculate the
environmental change would have added rigor to the research results.
6.2 Limitation of the Environmental Outcome Quantiﬁcation Methods

Speciﬁc, measurable, and improved environmental outcomes on the 31 surveyed
operations could be linked to the operations becoming veriﬁed through MAEAP;
however, MAEAP cannot be held wholly responsible for the improved outcomes for
several reasons. Speciﬁcally, since 2002 many changes have occurred in increased
enforcement of CAFO regulations and increased availability of EQIP cost-share funds“,
both of which directly affect MAEAP. These changes came within the last few years of
the MAEAP veriﬁcation process. Therefore, it was impossible to determine whether
some or all of the improved environmental outcomes were caused by the pursuit of

MAEAP veriﬁcation or to the new changes and regulations. For example, a livestock

 

2’ The use of models such as Soil and Water Assessment Tool (SWAT) that model the transport of water
from the land to receiving streams and routes ﬂow downstream, the Soil Erosion and Sediment Assessment
System (SESAS) that models soil erosion, sediment yield, and phosphorus loading, and the Erosion-
Productivity Impact Calculator (EPIC) that uses a ﬁeld-level physical process model to determine the effect
of management strategies on agricultural production and soil and water resources were some of the models
considered for the environmental evaluation of before and after livestock operations became MAEAP
veriﬁed. However, these models were viewed as too data and analysis intensive as to be beyond the scope
and timeframe of this thesis.

2" The allotted EQIP funding for the state of Michigan increased from $6,811,000 in 2002 to $9,727,900 in
2003 (MacMaster, personal communication, November 2005).

104

producer may have needed to alter their management strategies or to purchase capital
investments due to the regulation changes or their own business needs, but they asserted
in the survey that their investments were due to their participation in MAEAP.

Also, this research did not include any environmental outcome studies on the
animal production or manure storage area (a.k.a., barnyard) itself. This omission was due
to the variability and complexity of bamyards as well as the lack of previous knowledge
regarding the amount of barnyard phosphorus runoff that occurred prior to MAEAP
veriﬁcation. One of the largest problems in identifying the environmental outcomes
relating to barnyard changes was that phosphorus contributions from non-ﬁeld areas are
poorly understood (Hively, Bryant, & F ahey, 2005).

With the exception of the barnyard area, environmental outcomes that stemmed
from managerial and capital investment changes were examined for the entire farm with
the cropland phosphorus mass balance, and on speciﬁc ﬁelds with the phosphorus index.
Both methods were used to quantify an operation’s environmental outcomes that
occurred due to MAEAP veriﬁcation.

The environmental outcomes were only examined on those operations in which a
CNMP was collected, 81 percent of the 31 operations surveyed. Due to the variation
among the CNMPs collected, some details were not able to be added to the phosphorus
mass balance score (e. g., phosphorus in feed) that would have added to the precision of
the score. The calculated phosphorus mass balance score signiﬁed the amount of excess
or deﬁcient phosphorus that was produced on the farm in a given year.

The P—Index used for this research was developed by a committee of nutrient

management professionals in Michigan, but the index has not been adopted by any

105

Michigan governmental agency (i.e., MDA or NRCS) or MAEAP. The index used in this
research may not be the same as the ﬁnal version that Michigan state ofﬁcials and
industry experts agree to use. The P-Index estimated the potential for phosphorus runoff,
but did not calculate the actual quantity of phosphorus, if runoff should occur.

6.3 Changes by Species: Number and Cost

Operators needed to adjust their management practices and purchase capital
investments in accordance with the MAEAP CNMP to become veriﬁed. For this
research, these management practices and purchases of capital investment were re-
categorized to link the change with the area of the operation it affected; that is, some
capital investment changes affect the ﬁeld, while other changes affect the barnyard,
animal manure, or the whole farm management. The examined categories included 1)
ﬁeld changes (i.e., related to machines to transport manure, equipment to spread manure,
grass waterways, buffers, spreading labor, equipment usage, soil testing, commercial
fertilizer, and fuel); 2) barnyard changes (i.e., related to manure storage, fence, buildings,
gutters, drainage, roof, and driveway/berms); 3) animal manure changes (i.e., related to
manure testing, manure sold, and feed additives); and, 4) whole farm changes (i.e.,
related to record keeping labor, crop consultant/T SP, energy and utility, supervision
hours, and insurance premiums).

The effects of one change however, may have altered a decision related to a
different category on the farm. For example, selling less animal manure may increase the
need for additional manure storage (a barnyard change) and may also increase the
distance manure was hauled to a ﬁeld with a soil test phosphorus below 150 ppm (a ﬁeld

change). Also, ﬁve changes made on each speciﬁc operation affected many aspects of

106

the entire operation, and thus were classiﬁed as whole farm changes. A change made in
an operation did not necessarily translate into an environmental improvement. Also, a
change that cost more than another change did not necessarily signify a larger
environmental outcome.

In aggregate, whole farm and barnyard changes were the most expensive
alterations that occurred on an average operation; $2.88 and $2.90 per animal unit,
respectively (Table 6.1). Animal manure changes cost the least per animal unit, on
average, at $0.22 per animal unit. Swine operators, on average, spent little ($0.07) per
animal unit on animal manure changes, primarily due to the fact that swine producers did

not sell much manure and the cost to add phytase, the feed additive, was only an

additional $0.80 per ton of pre-mixed feed.

Table 6.1: Number of and Producer’s Cost per Animal Unit per Category Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef LDairy ] Poultry [ Swine [ Total [ CAF O [ AF 0
2004 Dollars per Animal Unit
Whole farm costs“ 7.76 2.21 1.69 2.72 2.88 1.85 4.13
Field costs" -6.95 1.57 10.06 0.17 1.53 0.17 3.17
Animal manure costs‘l 0.43 0.06 0.81 0.07 0.22 0.31 0.11
Barnyard costsﬁ 8.46 2.13 0.34 3.19 2.90 1.42 4.69
Total costs 9.71 5.97 12.89 6.16 7.53 3.75 12.11
Number of changes made
Whole farm changes 2.3 2.8 2.6 2.7 2.7 2.8 2.6
ield changes 2.7 2.7 3.4 3.2 3.0 3.2 2.7
Animal manure changes 0.7 0.8 0.8 0.5 0.7 0.9 0.4
Barnyard changes 2.7 1.6 0.2 0.8 1.2 1.3 1.0
N 3 10 5 13 31 17 14

 

 

*Whole farm changes and costs include: record keeping labor, crop consultant/T SP, energy and utility,
supervision hours, and insurance premium

"Field changes and costs include: machines to transport manure, equipment to spread manure, grass
waterways, buffers, spreading labor, equipment usage, soil testing, commercial fertilizer, and fuel

‘[‘Animal manure changes and costs include: manure testing, manure sold, and feed additives

'["['Bamyard changes and costs include: manure storage, fence, buildings, gutters, drainage, roof, and
driveway/berms

107

The most changes occurred in the ﬁeld category; however, this category did not
have the largest costs ($1.53 for ﬁeld changes). Although the number of changes
categories varied across the different species, if the number of changes made could be
examined statistically, it is probable that they would not be different from one species to
another. However, there may have been a signiﬁcant difference across Species with
respect to the cost per animal unit spent on different category changes.

6.4 Barnyard Management Changes

To evaluate the environmental impact from MAEAP, the barnyard management
changes made on an operation and their environmental performance need to be
quantiﬁed. However, an accurate assessment of the barnyard-related environmental
outcomes due to MAEAP could not be completed, because the researchers were not able
to inspect the barnyard before and after the changes were implemented, nor were
secondary data available.

Upon examining the barnyard changes made on the surveyed operations (i.e.,
gutters, manure storage, fences, buildings, drainage, roofs, and driveways and benns), the
average swine producer made few (0.8) changes but, spent nearly $3.19 per animal unit
to obtain these changes (Table 6.1). However, as previously stated, due to the nature of
the changes and the lack of scientiﬁc data available before the changes were
implemented, there was no method available to calculate the amount of lowered
environmental risk an operation achieved through implementing any changes. There
were models available to assess the environmental beneﬁts of keeping clean water clean;
however, data for these models would have needed to be collected prior to any changes

made on the barnyard to evaluate the amount of lowered risk.

108

Some evidence can be obtained from other studies. In a New York dairy study,
nine variables were examined to evaluate the risk of phosphorus runoff; four types of
pastures, the barnyard, cow paths, forest, and corn and hay ﬁelds (Hively et al., 2005).
The barnyard and cow paths had the quickest phosphorus overland ﬂow and they had the
highest concentration of dissolved and particulate phosphorus in that runoff. This
research suggested that the barnyard was a critical location for phosphorus loading
(Hively et al., 2005). Many of the 31 operations surveyed for this thesis study lowered
their risk of having a manure discharge into surface water by updating their manure
storage, rooﬁng and curbing the manure holding pads, or diverting water from an open lot
to a lagoon. An MDA employee that veriﬁes MAEAP operations explained that at least
two of the thirty-one operations surveyed for this research altered the manure storage to
eliminate a direct manure discharge into surface water (Appleby, personal
communication, October 2005). If properly built and maintained, all changes made to the
barnyard assisted in reducing potential transport of phosphorus to surface waters, because
all these changes reduced runoff. However, quantiﬁcation of pollution prevention
beneﬁts was beyond the scope of this study.

The barnyard changes made on the 31 operations accounted for, on average,
approximately 38 percent of the producer’s annual costs associated with maintaining
veriﬁcation ($2.90 per animal unit) (Table 6.1). If an operator made barnyard changes,
the operator was more likely to receive more cost-share per animal unit (r = 0.49). A
strong correlation was expected, as all of the MAEAP-required barnyard changes were

eligible for EQIP cost-share. However, there was only a small negative correlation

109

between the annual producer cost of becoming MAEAP veriﬁed and the ntunber of
barnyard management changes implemented (r = -0.19).
6.5 Cropland Phosphorus Mass Balance

Although the environmental impact of the barnyard could not be captured, the
phosphorus mass balance on the operation’s cropland was calculated. As phosphorus is
the limiting nutrient in freshwater systems, such as Michigan, only the cropland
phosphorus mass balance, not nitrogen, was calculated for this study.

A typical mass balance score would be calculated by subtracting the “exported”
phosphorus from the amount “imported” on the operation. Due to the variability across
CNMPS, the phosphorus mass balance calculation used in this study did not use the
amount of phosphorus in the feed stuffs, by-products (e.g., grain, milk, meat, and
manure) sold and retained on farm, and commercial fertilizer. The variables that were
available in all CNMPS, and therefore used to calculate the cropland phosphorus mass
balance in this thesis research, included: the amount of P in manure, the number of acres
that could have manure spread and still be below 300 pounds per acre phosphorus, and
the amount of P the crops on those spreadable acres would use during a growing season.
Also, for this research, the application of commercial fertilizer was considered to be
determined after the livestock producer knew the cropland phosphorus mass balance.
Therefore, if a farm was out of cropland mass balance, according to the farm’s CNMP
calculations, no commercial fertilizer would be spread. Over-application of commercial
fertilizer would therefore not be a concern.

Any operation will either be in cropland phosphorus mass balance or out of

cropland phosphorus mass balance. For the purposes of this thesis research, a farm was in

110

mass balance if the pounds of P205 per year applied via manure (import) were less than
the pounds of P205 per year that a crop consumed from the soil (export). When imports
were less than or equal to exports, the cropland P mass balance had a negative or zero
score, respectively. If the cropland P mass balance score was negative, supplemental
commercial P could have been spread on the crop to assist with crop production.

If the calculations from this research revealed an operation had a phosphorus mass
balance score that was within plus or minus 20 percent of the initial pounds of P205
consumed by crops, that operation was considered to be in balance. The range was
acceptable due to errors in calculating phosphorus in manure, soil phosphorus, and/or
crop uptake (Appleby, personal communication, October 2005). If a farm was out of
balance, it had a positive score, signifying that the crops could not consume all of the
phosphorus that was applied via manure application and/or not enough manure had been
sold off-farm.

The P mass balance score that was calculated using the information provided in
the 25 collected CNMPs was considered the cropland P mass balance after the operation
became MAEAP veriﬁed. To calculate the cropland phosphorus mass balance on these
25 operations before they became MAEAP veriﬁed, those variables that affected the
quantity of manure, the level of phosphorus in the manure, or amount of phosphorus a
crop consumed were evaluated. These variables included the amount of manure sold
before MAEAP veriﬁcation occurred, any change in crop rotation after a farm became
MAEAP veriﬁed, and any animal unit, feed ration, or number of spreadable acres altered

because the farm became MAEAP veriﬁed.

111

After the operations became MAEAP veriﬁed, excess generation of phosphorus
occurred on four of the twenty-ﬁve farms. However, two of these operations were within
the acceptable :l:20 percent range and were deemed within mass balance. The other two
operations did not have exports greater than imports and thus, were out of mass balance
and they exceeded the acceptable range of $20 by 3 and 19 percent.

From Table 6.1, of the data computed from the collected CNMPS, the operations
with dairy as the primary species were the only species that had an average positive
cropland phosphorus mass balance prior to becoming MAEAP veriﬁed. This result
meant the average dairy farm was out of mass balance prior to implementation of the
CNMP. However, each species category had at least one farm that had a high positive
number prior to becoming MAEAP veriﬁed. After becoming MAEAP veriﬁed, all
species had an average phosphorus mass balance score that was below zero.

There were three operations that remained in mass balance, but had an increase in
their mass balance score after they became MAEAP veriﬁed compared to before
veriﬁcation. The increase in phosphorus mass balance was due to additional animal units
and less manure sold. Additional animal units were brought on the farm because the
livestock operator understood his cropland could use additional phosphorus. Some
producers sold less manure due to the complexities that would occur with manifests in the
future, and their cropland could use the extra nutrients.

After becoming MAEAP veriﬁed, CAFOS decreased their phosphorus mass
balance by an average of 23,750 pounds of P205 (Table 6.2). AF Os had a smaller change
in mass balance with an average decrease of 2,579 pounds of P205 after veriﬁcation.

Because Spreadable acreage is a concern for many operations, the phosphorus balance

112

allows the manager to evaluate how much manure needs to be moved off the farm to
avoid over-application of nutrients (Nutrient Management Task Force, 1999). Many
CAFO operators sold some Of their animal, which aided these operations in bringing the
Operation into or below the phosphorus mass balance. The average operation made 7.0

changes and spent about $7.00 per animal unit annually on variables that affected the

phosphorus mass balance score.

Table 6.2: Change in Phosphorus Cropland Balance on 25 Operations due to
MAEAP Veriﬁcation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef [ Dairy [Poultry] Swine [ Total ] CAFO] AFO
205 mass
[balance before
veriﬁcation Pounds of P205 per year
Average -13,558 3,595 -15,171 -4,663 -4,744 -5,361 -4,075
Standard Deviation 15,797 57,837 127,178 19,179 55,515 76,077 20,234
Minimum -58,335 -196,733 -29,467 -196,733 -l96,733 -38,086
Maximum 97,689 95,271 44,641 97,689 97,689 40,780
[£205 mass
alance after
veriﬁcation
Average -12,675 -20,411 -41,341 -10,391 -18,332 -29,111 -6,654
Standard deviation 17,046 26,571 104,645 11,111 41,686 53,799 18,650
Minimum“ -63,751 -196,733 -29,467 -196,733 -196,733 -38,086
Maximum 13,448 31,369 8,206 31,369 180 31,369
hange in P205
alance
Average 883 -24,006 -26,170 -5,728 -l3,588 -23,750 -2,579
Standard deviation 1,249 40,443 46,280 14,271 29,605 38,369 7,208
Annual producer
ost/ A.U. 2004 Dollars per Animal Unit
Average 0.69 5.96 12.82 6.55 6.92 2.93 11.23
Standarddeviation 35.96 3.01 17.61 11.02 12.65 9.16 14.78
Total number of
[changes made Number of changes made
Average 9.5 7.3 5.8 6.9 7.0 7.6 6.4
Standard deviation 0.7 2.2 2.5 3.2 2.7 3.0 2.4
N 2 7 4 12 25 14 12

 

 

 

 

 

 

 

 

 

*Minimum and maximum values are not reported if N is less than 4.

113

 

Producers can choose one or several methods to decrease their phosphorus mass
balance score. Five of the seven surveyed Operations that were not in mass balance prior
to becoming MAEAP veriﬁed, achieved mass balance after becoming MAEAP veriﬁed.
When these ﬁve farms moved towards becoming in mass balance, it would be expected
that they will have reduced their operation’s potential for soil phosphorus build-up and
eventual runoff into surface water.

6.6 Phosphorus Index

In addition to the mass balance, the phosphorus index (P-Index) was another
method used to estimate if MEAEP assisted in preventing surface water pollution. The P-
Index differs from a mass balance calculation, because it evaluates speciﬁc ﬁelds and
takes into consideration intermittent streams (a stream that holds water part of the year),
ﬁeld slope, and the ﬁeld’s hydrological group. The P-Index was not calculated as part of
the CNMP, but was calculated using information within the CNMP. The P-Index was
used to estimate the potential for phosphorus runoff, but did not calculate the quantity Of
phosphorus that would be contained in any runoff. The Michigan phosphorus index used
in this study is discussed in Appendix F.

For purposes of this thesis research, several Michigan State University Extension
personnel were asked to assist in comprehensively evaluating three to six high-risk ﬁelds
on each of 12 high risk Operations using the phosphorus index. Only 12 out of 25
operations were deemed high risk; this high risk categorization was based on their
distance to a cold water trout stream (within a quarter of a mile) or the operation’s mass
balance score. An operation’s mass balance score put the operation in the high risk

category if the operation met one of two characteristics — either the operation was out Of

114

mass balance after becoming MAEAP veriﬁed, or the operation had a change in their
mass balance score that indicated that there was an increased amount of phosphorus on
farm, but the operation was not out of mass balance. If a CNMP was not collected from
an Operation, it could not be determined if the operation would be considered high risk;
thus, only the 25 Operations in which a CNMP was collected were evaluated as to
whether they were in the high risk category or not.

Compared to a soil test or MARI calculation, the P-Index was more
comprehensive in examining a ﬁeld for pollution potential. The P-Index accounted for
variables that affected the transport and source of phosphorus on each ﬁeld. The variables
included in the phosphorus index were placed in one of two categories, transport or
source. The transport variables included RUSLE2”, RCN (Runoff Curve Numbers),
distance to surface water, subsurface drainage, and buffers, while the phosphorus source
variables included soil test phosphorus, phosphorus fertilizer method, manure spreading
method, and the P205 rate applied from all sources. Each of the nine variables received a
score, ranging from zero to eight; the nine scores were totaled to determine the ﬁeld’s
potential phosphorus runoff rating. A zero score indicated that there was a low potential
of phosphorus runoff risk. If a particular category’s score was closer to eight, that
category was viewed tO have a higher potential risk of phosphorus runoff. A ﬁeld with a
total score of 18 or higher indicated that the ﬁeld had a high potential risk, and the

operator needed to make management or capital changes to lower the score. A score

 

27 RUSLE2 calculates the tons per year of soil loss on a ﬁeld. RUSLE2 is calculated with the equation, A =
R K LS C P, where A = Soil loss in tons per acre per year, R = Rainfall-runoff erosivity factor, K = Soil
erodibility factor, S = Slope steepness factor, L = Slope length factor, C = Cover—management factor, P =
Support practice factor. The 2 indicates that the calculation is the second version of RUSLE.

115

below 1828 implied that a producer could spread more manure or commercial fertilizer, if
he/she chose to do so. Eighteen was a threshold selected by the Michigan committee of
manure nutrient specialists; however, P-lndex scores can range from 0 to 68.

Not all ﬁelds were examined on the 12 high risk operations; this decision was
made on the assumption that if the ﬁelds with the highest risk to pollute surface water
were examined and had a score of less than 18, the ﬁelds that did not meet the high risk
criteria on that farm would score below 18. Eight ﬁelds were randomly selected from the
pool of ﬁelds on each of the 12 high risk operations that met one of the following three
criteria: 1) soil test P was over 150 ppm; 2) a MARI score in the high category; or, 3) the
ﬁeld was within 300 feet of surface water. However, four of the high risk Operations did
not have any ﬁelds that met these three criteria. In those situations, the ﬁelds with the
highest soil test phosphorus and MARI score were selected. As the RUSLE2 was the
most laborious calculation to make, once the other eight P-Index variables29 were
evaluated, only those ﬁelds that scored above 18, or were the three highest scoring ﬁelds
on the Operation, whichever was greater, were evaluated with the last variable; RUSLE2.

From Table 6.3, prior to the 12 high risk operations becoming MAEAP veriﬁed,
their ﬁelds had an average score of 18.5 on the P-Index, slightly above the 18 threshold.
It should be noted however, that the P-Index score averages on the high risk operations
ranged from 27.7 to 8.7 before the Operations became MAEAP veriﬁed. After these

operations became veriﬁed, the P-Index score on these same ﬁelds ranged from 20.5 to

 

2" Michigan’s P-lndex was considered a resource to be used in only two scenarios: 1) if the operator wanted
to spread phosphorus on a ﬁeld with a soil test above 150 ppm, the ﬁeld must score below 18; or, 2) if the
operator wanted to spread manure or commercial phosphorus fertilizer at a rate higher than the suggested
two-year crop removal rate, the ﬁeld must score below 18.

29 The ﬁrst eight factors to be calculated were the RCN, distance to surface water, amount of subsurface
drainage, and width of buffers, the ﬁeld’s soil test phosphorus, the method used to incorporate phosphorus
fertilizer, manure spreading method, and the P205 rate applied from all sources.

116

7.7. The smaller range and lower scores, after the high risk operations became MAEAP
veriﬁed, indicated that environmentally beneﬁcial practices were adopted to decrease
phosphorus runoff. If no practices affecting the risk of phosphorus loss on ﬁelds were
changed, the P-Index score would not have changed.

To lower the P-Index score of a ﬁeld, the manager could have made several
different management changes or planted a buffer strip or grass waterway. A change in
the P-Index score usually resulted from decreasing P runoff potential through less soil
erosion, (planting buffers or grass waterways, and observing setbacks), applying manure

over a growing crop, incorporating manure, or applying less manure or commercial P.

Table 6.3: Average High Risk Operation P-Index Score

 

 

 

 

 

 

 

 

 

 

Number
of Before MAEAP After MAEAP Change in Score
variables veriﬁcation veriﬁcation
P-Index Score
Transport score 5 10.2 7.3 -2.8
Source score 4 8.3 7.1 -l .2
Total score 9 18.5 14.4 -4.0

 

 

The average change in the P-Index score from before to after MAEAP veriﬁcation
on the 12 high risk Operations was -4.0. After the operations became MAEAP veriﬁed, a
P-Index score of 14.4 was achieved, which signiﬁed a lowered potential for phosphorus
runoff on the high risk ﬁelds. If the high risk ﬁelds scored below 18, it was assumed the
lower risk ﬁelds on that same farm would also score below 18.

The transport score decreased more than the source score (-2.8 compared to -1.2)
indicating that on average, more operators chose to implement buffer strips, change crop
rotation, or alter tillage practices rather than change the method or amount of phosphorus

that was applied to a ﬁeld. The most common change in the transport category was

117

adding buffers or setbacks, which also increased the distance to surface water. The source
score was typically lowered by either not applying manure to a high risk ﬁeld or altering
the timing of application so that applications were on growing crops.

In this study, the costs associated with altering the P-Index in the ﬁelds were
averaged to determine how much the producer and producer plus taxpayer spent on this
environmental measure. All costs associated with managerial changes and capital
investments were included, except those costs associated with energy and utility,
insurance, and/or barnyard management changes. Not only were the costs associated with
the ﬁeld included, but also included were supervision hours, record keeping, manure
testing, feed alterations, and the crop consultant fees. These costs were included as the
relating variables assisted the Operator in making managerial decisions about where to
Spread manure, determining what rates manure or commercial fertilizer should be spread,
and supervising to ensure the CNMP was followed accurately.

About 44 percent of the producer’s annual costs per animal unit incurred on the
high risk Operations were attributable to changes made that affected the P-Index ($3.42 of
$7.76). Of the high risk operations, there were no CAFOS that received cost-share for any
capital investments eligible for EQIP cost-share. The small and medium Operators had
nearly a $2.00 decrease in annual costs per animal unit that were related to altering the P-

Index due to EQIP cost-share (Table 6.4).

118

Table 6.4: Average Costs Affecting the P-Index Score on 12 High Risk Operations

 

 

 

 

 

 

 

 

 

Total CAFO [ AFO
2004 Dollars per Animal Unit
Annual taxpayer & private costs 4.23 3.41 5.39
Standard deviation 7.33 3.80 11.09
Annual producer costs 3.42 3.40 3.43
Standard deviation 5.64 3.80 8.12
N 12 7 5

 

 

 

 

If an operation was considered high risk according to this study’s criteria, the
operator was more likely to change the equipment he/she used to spread manure (r =
0.54), add more manure storage (r = 0.51), and put gutters on the buildings (r = 0.33) than
if the operation was not labeled high risk. When the operators of the high risk operations
were posed with the statement, “Even though clean water beneﬁts the public, producers
should pay for the majority of mandatory environmental practices to ensure pollution
prevention,” they gave the statement a score of 4.2 on a 5 point scale indicating
disagreement. The operators of the high risk operations more strongly disagreed than the
average operator 4.2 compared to 3.7.

The 12 high risk operation managers were, on average, four years older than the
13 other operations’ managers in which a CNMP was collected (51 compared to 47 years
old). Although the differences in ages found were not great and are probably not
signiﬁcant. Also, the more education the owner/operator achieved, the less likely the
Operation was considered one of the 12 high risk operations (r = -0.34). The 12 high risk
Operations also had a larger animal unit per acre density of 1.6 than did the 13 other

operations in which a CNMP was collected (0.6).

119

6.7 Risk Level Effects on Changes Made

Although only the high risk operations were evaluated using the P-Index, the
number of changes these operations made (8.8) outnumbered the quantity of changes
made on all 31 Of the Operations (7.5) (Table 6.5). The number of changes an operation
made were correlated with the amount of change in the Operation’s average P-Index score

(0.57 correlation).

Table 6.5: Amount and Cost of Changes Made to Become MAEAP Veriﬁed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Risk @erations CNMP Operations]: [ All Operations
2004 Dollars per Animal Unit per Year
Whole farm costs"‘ 2.57 2.54 2.88
Field costs" 0.95 1.50 1.53
Animal manure costS'l' 0.16 0.10 0.22
Barnyard costsf‘l‘ 2.83 2.78 2.90
Total costs 6.51 6.92 7.53
Number of changes made
Whole farm changes 2.8 2.6 2.7
Field changes 3.5 2.8 3.0
Animal manure changes 0.9 0.6 0.7
Barnyard changes 1.7 1.2 1.2
Total changes 8.8 7.2 7.5
2004 Dollars per Animal Unit
Cost-share received 91.17 56.78 54.96
N 12 25 31

 

ICNMP Operations include only those operations in which a CNMP was collected.

 

‘Whole farm changes and costs include: record keeping labor, crop consultant/T SP, energy and utility,
supervision hours, and insurance premium

"Field changes and costs include: machines to transport manure, equipment to spread manure, grass
waterways, buffers, spreading labor, equipment usage, soil testing, commercial fertilizer, and fuel

[Animal manure changes and costs include: manure testing, manure sold, and feed additives
'["['Bamyard changes and costs include: manure storage, fence, buildings, gutters, drainage, roof, and
driveway/berms.

Comparing the various costs (whole farm, ﬁeld, animal manure, and barnyard),
the high risk operators spent less than the aggregate on average and implemented more

changes in each category per animal unit. It cost the managers of the high risk operations

120

$1.02 less per animal unit to implement all required changes than for all 31 operations.
The lower cost per animal unit was due to the high risk operations having more animal
units and more cost-share per animal unit.

The 12 high risk operations received more cost-share per animal unit on average
than the aggregate (all 31 Operations) average ($91.17/A.U. compared to $54.96/A.U.).
These 12 operations had a P-Index score above 18 before they became MAEAP veriﬁed,
and by implementing more agronomic management practices and decreasing the amount
of ﬁeld erosion, they reduced the potential of phosphorus runoff. On average, larger
amounts Of cost-share were given to the operations with the highest potential to pollute
surface water from a ﬁeld. Barnyard changes may have also decreased the amount of
direct runoff into surface water. Because this research could not determine if an operation
had a higher potential to pollute surface water from the barnyard than another operation,
no linkages could be made between the amount of cost-share an operation received and
the potential for the barnyard to pollute surface water.

6.8 Summary

MAEAP has affected environmental outcomes in a positive manner, as estimated
by the lowered estimates of phosphorus mass balance on the farms and the P-Index
calculations. Having an operation in mass balance suggests that excess nutrients are not
accumulating in the soil and are less likely to be transported into surface water via runoff.
Eliminating the excess nutrients in a ﬁeld lowers the risk of phosphorus runoff. Although
the phosphorus index is new, it provided valuable environmental information. The 12
high risk operations made changes to decrease the risk of ﬁeld phosphorus runoff and

erosion. This study did not however verify how much risk was reduced. The high risk

121

operations that needed to make changes to their ﬁelds did so at a low cost per animal
unit; this result suggests that improving the environmental stewardship of easily eroded

or phosphorus-rich ﬁelds was not costly, given that the operators received cost-share.

122

Chapter 7: Proposition Analysis
7.1 Introduction

This study was a set of case studies of 46 percent of MAEAP-veriﬁed farms and
is signiﬁcant to the population of MAEAP participants, as 29 of the 46 producers that
managed MAEAP-veriﬁed [or nearly veriﬁed] operations were interviewed. This study
was useful in investigating several strongly held hypotheses, or prOpositions. Below are
the nine propositions as stated in Chapter 1, that are related to the motivation to become
veriﬁed through the MAEAP, economics of becoming MAEAP veriﬁed, and the
environmental outcomes of MAEAP-veriﬁed farms. The nine propositions were
supported or contradicted by the data collected from the livestock producer interviews
and the CNMPs. These relevant data were the basis for support or opposition for the
proposition. However, due to the small sample size, no formal hypothesis testing
occurred.

7.2 Research Propositions

Proposition 1: The earliest MAEAP adopters (veriﬁed in 2002 and 2003)
were already implementing many of the pollution prevention practices a CNMP
required prior to becoming veriﬁed and thus, were the low-cost adopters.

Within the CNMP, there were many practices operators could implement to
prevent pollution, including management or capital investment practices. The operations
that were veriﬁed earlier (in 2002 and 2003) were different from the operations that were
veriﬁed later (after 2003) in many respects; the earlier operations on average had older

facilities (26 years older), more manure storage (85 percent had more than six months of

123

manure storage as compared to 67 percent of the later adopters), and fewer animal units
on average (1,442 A.U. compared to 3,133 A.U. for the later adopters).

The early veriﬁed Operators also had more changes to make to their management
system and capital investments to become veriﬁed, 9.5 compared to 8.3 for the later
veriﬁed Operations. However, there may be no statistical difference between the early
and late veriﬁed operations in the number Of changes they made. Although the earliest
veriﬁed farms spent less annually on average, $8,855, they spent $5.86 more per animal
unit per year compared to the later adopters in order to achieve and maintain MAEAP
veriﬁcation. The operations veriﬁed later had more than double the animal units which
lowered their veriﬁcation cost per animal unit. The earlier veriﬁed operations spent over
one percent more of their annual gross farm revenue to become MAEAP veriﬁed (1.37
percent) compared to the later veriﬁed operations (0.32 percent).

Cost was only one side of the story, however. When evaluating the 25 CNMPs
collected using the research calculated mass balance scores, the earlier operations were in
mass balance before becoming MAEAP veriﬁed. These Operations had a mass balance
score of -12,291 pounds of P205, which meant that the earlier veriﬁed operations had the
soil capacity to have 12,291 more pounds of P205 applied to meet crop removal
requirements and still be considered in mass balance. The later veriﬁed operations were,
on average, out of mass balance before they became MAEAP veriﬁed; they had a mass
balance surplus of 1,187 pounds of P205. Both the early and late veriﬁed operations
made changes in their P205 mass balance, which led to both types Of operations to be in

mass balance after becoming MAEAP veriﬁed.

124

The operations that were considered veriﬁed early, that is, those operations
veriﬁed prior to 2004, spent more money per animal unit and decreased both their P205
mass balance (-15,015 compared to -12,467) and P-Index score (-5 compared to -2) more
than did the later veriﬁed operations. The earlier veriﬁed operations were, however, in
mass balance prior to MAEAP veriﬁcation.

Looking only at the 12 high risk operations, half were veriﬁed early and half were
veriﬁed late; the earlier veriﬁed operations had a larger average P-Index score prior to
becoming MAEAP veriﬁed (20.7 compared to 16.7). However, the earlier veriﬁed
operations lowered their P-Index score by 4.8 points compared to the later veriﬁed
Operations who lowered their scores by 2.0 points; all Operations had an average P-Index
score lower than the 18 score threshold after they became MAEAP veriﬁed.

This proposition, number one, that states the earliest MAEAP adopters were
already implementing many of the pollution prevention practices a CNMP required prior
to becoming veriﬁed and thus were the low-cost adopters, appears to be supported by the
data collected from this study. The earliest MAEAP adopters were not already
implementing most of the pollution prevention practices a CNMP required prior to
becoming veriﬁed, as the number of changes made was similar to the number of changes
the later operators made. Although the early adopters spent more per animal unit and a
larger percentage of their gross farm revenue, in total they spent less money annually to

become MAEAP veriﬁed than did the later adopters.

125

Proposition 2: Liability risk and the potential for environmental regulation
motivated livestock producers to become MAEAP veriﬁed.

With increased environmental regulations on the forefront, more producers will
need to have a CNMP in the future. Of the 29 producers that were interviewed, 58
percent became MAEAP veriﬁed due in part to the current or potential environmental
regulations directed at his/her livestock operation. Although only 19 percent of the 31
operations (six) became veriﬁed to decrease the probability of lawsuit, on average the 29
producers disagreed strongly (4.5 out of 5) that liability and lawsuits were of little
concern to the Michigan livestock industry.

In 2004, four small and medium Operations became MAEAP veriﬁed, while ten
large operations became veriﬁed. Sixty percent of the CAFO operators that became
veriﬁed in 2004 sought MAEAP veriﬁcation in part, due to new regulations. It would
appear that proposition number two is consistent with the motivation and opinion answers
to questions asked during the interview. The increased interest in MAEAP veriﬁcation
was most likely inﬂuenced by the 2003 CAFO Final Rule (US. EPA, 2003) of the
September 2005 deadline, requiring large livestock producers to be enrolled with
MAEAP or have an NPDES permit. Proposition number two was supported by this
research, as liability risk and the potential for environmental regulation did motivate
livestock producers to become MAEAP veriﬁed.

Proposition 3: The costs of becoming MAEAP veriﬁed were not proportional
to the income of the farm.

Gross farm revenue is the income of an operation before taxes, often called the

gross proﬁt and not the net farm income (i.e., proﬁt). As revenue increases, the trend

126

Observed in this research was about a one percent decrease in annual producer costs to
become MAEAP veriﬁed, as a percentage of annual gross farm revenue (Figure 7.1).
However, the costs livestock Operators incurred to become MAEAP veriﬁed may have
changed over time.

If the sample size were large and formal hypothesis testing could be conducted,
there would be two outliers omitted when evaluating the percentage of gross farm
revenue. The two points, 6.45 and 5.44 percent, were more than three standard
deviations from the mean (greater than 5.35 percent). With the two outliers omitted, the
linear relationship would Slope slightly upward (y = 1E-10x + 0.0035) from just below
0.4 percent to slightly more than 0.5 percent. This relationship coupled with the
relationship of Figure 7.1 indicates that the average producer costs as a percentage of
gross farm revenue may have remained nearly constant for all revenue levels, regardless
of species or size. Data gathered from this study did not support proposition 3; the costs

Of becoming MAEAP veriﬁed were proportional to the gross farm revenue of the farm.

127

Figure7.1: Annual Producer Cost to Become MAEAP Veriﬁed as a Percent of Gross
Farm Revenue

 

 

 

 

 

 

 

 

 

 

7.00% 0
600%],v 7 _ I 7 7 ’ ”7 "y=-7E-10x+0.0101
5.00%3._LLL WWWWWW WWWWWWﬂk __ L____
4.00% ~ W- W W W W W W - 2 L L L,
3.00%~WWW WW WWW W 7’2 LLLL
2.00°/o— WWW , W LL W W W W W Wii - L L LL _,
1.00% ~~°o7e¢_-WW°W T— __ L _.-_- . - _ L..-_... . _ L...L__°,__
0.00% :“f’.e§r . ° ? 0 e We 3: ‘
-l.00% ‘tW W—-~ .- r W W — W W- W — W- WWW WWWW — -WW- WW
-2.00%

- 3,000,000 6,000,000 9,000,000 12,000,000 15,000,000 18,000,000

[ 0 Gross Farm Revenue —Linear (Gross Farm Revenue)

 

 

 

Proposition 4: When producers followed the implementation strategies in the
CNMP the result was new ﬁxed assets that were larger than without MAEAP
veriﬁcation or EQIP cost-share.

Fixed assets include buildings, manure storage, equipment, and real property.
MAEAP veriﬁcation does not require a minimum capacity of manure storage, as each
farm has a unique situation. Each CNMP would have to justify that the manure storage
currently in place is sufﬁcient to allow for freeboard space and any extra lot, milkhouse,
or roof runoff. A general NPDES permit, as opposed to an individual NPDES permit
does not allow any operation to have less than six months of manure storage. Of the 12
MAEAP-veriﬁed operators who constructed new manure storage areas or altered their
manure storage to decrease the potential for a discharge, nine built a new manure storage
that increased at least one of their manure storage holding capacities by an average of 11

months. This increased capacity did not indicate that the operation added capacity in all

128

types of manure storage. For example, there could have been three months of storage for
the bedding/pen pack manure but 12 months of liquid manure storage. These new manure
storage structures were larger than necessary by the current requirements in the GAAMPs
or for MAEAP veriﬁcation; however, the construction most likely allowed the producer
to achieve economies of scale and avoid rebuilding to meet more stringent standards (i.e.,
permit regulations) or expansion needs that may occur in the future.

One producer’s constructed a 24-month capacity manure storage structure to
eliminate a direct manure discharge into surface water for a total cost of $240,000; 50
percent of this cost was EQIP cost-shared which lowered the producer’s cost to $120,000.
This producer “over-built” the building relative to MAEAP veriﬁcation requirements; he
stated his reason was so that manure storage capacity would not be an issue of future
discussion with governmental Ofﬁcials. Perhaps if the project was not cost-shared, the
livestock producer may not have spent $240,000 to construct a building of that
magnitude. It could also be the case that the construction company may have capitalized
the cost-share into the fee for building the structure, making the structure more expensive
than if cost-share had been unavailable.

It should be noted however, that four Of the 29 producers interviewed (14 percent)
mentioned that less cost-share would have “made a difference” ﬁnancially for them to
become MAEAP veriﬁed. One operator pointed out that his operation was an AF O; and,
if it were not for the EQIP program, he would not have become MAEAP veriﬁed because
he could not have otherwise paid for some of the capital investment costs. Proposition

number four appears to be supported by the data collected; following the implementation

129

strategies in the CNMP resulted in new ﬁxed assets being larger than without MAEAP or
EQIP cost-share.

Proposition 5: The amount of ﬁnancial assistance a livestock producer
received was correlated positively with the increased amount of capital investments
implemented to prevent pollution.

Neither new machinery, equipment, nor management changes were eligible for
EQIP cost-share funds, but EQIP would cover a portion of nearly all other capital
investment costs associated with becoming MAEAP veriﬁed. The correlation of the
amount of cost-Share received with the total costs Of items that were eligible for cost-
share was strong at 0.59. Of the producers that spent more than $1,000 on capital
investment changes, 35 percent received EQIP cost-share funds. However, three
operators — that spent over $1,000 in capital investments — did not apply for EQIP cost-
share due to the paperwork required and for distaste Of governmental involvement.

Some changes made on operations were small, 14 operations had capital
investment expenditures that totaled less than $1,000; nine of the 14 operations had no
eligible cost-share expenses. Of the eight Operations that received EQIP cost-share for
their capital investments, seven received a payment that covered at least 50 percent of
their total capital investment costs. Proposition ﬁve was supported by the data; the
amount of ﬁnancial assistance a livestock producer received was associated with the

increased cost and amount of capital pollution prevention investments implemented.

130

Proposition 6: As MAEAP became more established and additional details
and regulations evolved, the average costs to become and maintain MAEAP
veriﬁcation increased.

The average costs associated with developing the CNMP increased slightly over
time, from $4,231 in 2002 to $5,608 in 2005 (Table 7.1). The average cost to producers
to write the CNMP remained nearly constant over the four-year period. The annual
managerial and capital investment costs associated with becoming and maintaining

MAEAP veriﬁcation increased over time (Figure 7.2).

Table 7.1: Costs to Become and Maintain MAEAP Veriﬁcation over Time

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2002 I 2003 2004 2005
2004 Dollars per Year
Total producer + taxpayer
CNMP writing cost 4,231 3,904 6,047 5,608
Standard deviation 2,055 2,478 4,366 3,363
Total producer CNMP writing
cost 2,985 1,142 3,021 2,108
Standard deviation 2,464 1,181 3,292 977
Annual producer + taxpayer
cost 8,993 12,403 21,864 9,254
Standard deviation 15,158 19,060 62,692 8,314
Annual producer cost 8,255 11,098 21,347 8,184
Standard deviation 15,519 19,545 62,775 8,164
2004 Dollars per Animal Unit per Year
Annual producer cost per A.U. 9.36 12.76 4.92 5.60
Standard deviation 11.85 14.34 13.00 1.62

 

 

Although the average, annual costs livestock producers incurred increased over
time, the size of the average operation also increased over time. For example, the
operations veriﬁed in 2004 had the highest annual costs associated with MAEAP
veriﬁcation that the taxpayers + private ($21,864) and producers ($21,347) paid and at

least double the number of animal units compared tO the other years analyzed (Table 7.1).

131

Thus, these operations had the lowest cost per animal unit ($4.92). Sixty-two percent of
the operations veriﬁed in 2002 and 2003 were AFOS compared to only 33 percent of the
operations veriﬁed in 2004 and 2005, which assisted the latter years’ data in exhibiting a

lower average cost per animal unit.

Figure 7.2: Annual Societal and Producer Cost to Become and Maintain MAEAP
Veriﬁcation over Time

 

 

 

   

 

 

 

 

25000 WWW
$21,864
E 20000 - W 7
T:
D
V
O
SISOOO-W “L-___:_
.E ’— "" ‘— ‘
------ W-
76 10000 ~ $8,993 7‘ W 89,254
E
C‘.
<
5000 J
2002 2003 2004 2005
Year
I _ Annual Societal Costs — Annual Producer Costs
L — — Linear (Annual Producer Costs) - - - -Linear (Annual SocietalCosts)

 

 

The trend Observed was a decreasing annual producer cost per animal unit (Figure
7.3) over time even though the trend of the average annual producer cost (Figure 7.2) was
increasing over time. However, with more data a more compelling trend could have been
established. Due to the small sample size and lack of subsequent years’ data, it was not
possible to gain much insight to conclusively dispute or support proposition number six
which stated, as MAEAP became more established and additional details and regulations

evolved, the average costs to become and maintain MAEAP veriﬁcation increased.

132

Figure 7.3: Annual Producer Cost per Animal Unit to Become and Maintain
MAEAP Veriﬁcation over Time

 

 

‘4 $12.76

2004 Dollars

 

 

 

2002 2003 2004 2005
Year Veriﬁed

 

 

L- Annual Producer cost/ animal unit -— Trendline

 

 

Proposition 7: Most CNMP changes required for MAEAP veriﬁcation were
linked to management practices rather than capital investments.

Regularly, a variety of management changes and capital investments occurred
before an operation was MAEAP veriﬁed. The average producer needed to make nearly
3.5 times more managerial changes than capital investments to become MAEAP veriﬁed,
7.2 and 2.1, respectively (Table 7.2). It did not matter what species was produced on the
operation, whether the operation was labeled large or small, or whether the operator
became veriﬁed early or late; the number of managerial changes always outweighed the
number of capital investment changes on the average.

Although the average operation in total, spent three times more on managerial

costs as compared to capital investments ($11,078 compared to $3,631), some managerial

133

changes made did not cost much annually. Some changes assisted the livestock producer
in decreasing the total cost of becoming MAEAP veriﬁed (e.g., less commercial fertilizer
was purchased on some farms). Additionally, the more management changes an
operation made did not necessarily lower the potential for pollution of surface water more
than that of another operation that made fewer managerial changes. The same statement
was also true for capital investment changes. The research collected supports proposition
seven; most changes required for MAEAP veriﬁcation were linked to management

practices rather than capital investments.

Table 7.2: Producer’s Annual Changes and Costs made to Become MAEAP Veriﬁed

 

Early Late
Beef Dairy Poultry Swine Total CAFO AFO Verify Verify

Managerial changes“ 5.7 6.9 6.6 7.2 6.9 7.2 6.5 7.3 6.6
Capital investment

 

 

 

 

changes” 3.7 2.5 0.8 1.5 1.9 2.1 1.6 2.2 1.7
Total number of
changes made 9.3 9.4 7.4 8.7 8.8 9.3 8.1 9.5 8.3

 

2004 Dollars per Year

 

Annual managerial
costs -8,952 7.348 54,504 1,867 11,07819,338 1,048 7,373 13,753
Annual capital
investment costs 1,222 5,326 6,903 1,625 3,631 4,659 2,382 2,195 4,668
Annual cost of
changes made -7,730 12,673 61,407 3,492 14,709 23,997 3,430 9,567 18,422

N 3 10 5 13 31 17 14 13 18
‘Managerial changes include: crop consultant/T SP, manure spreading hours, supervision hours,
recordkeeping hours, commercial fertilizer purchased, equipment usage, fuel, energy/utilities, insurance,
manure sold, manure testing, soil testing, and feed rations.
"Capital investment changes include: machines to transport manure, equipment to spread manure, manure
storage, buffers, fence, drainage, buildings, roofs, gutters, grass waterways, and driveways/berms.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proposition 8: The largest barrier to become MAEAP veriﬁed was the
proximity to suitable, available cropland to spread manure.
When posed with the question, “What were the largest barriers to implementing

your CNMP changes on your farm?” the most common response was “land” (41 percent).

134

Other responses included time (28 percent), inconsistency among agency staff (28
percent), and the need for more manure storage (14 percent). The different land
components are explained in section 4.5, Barriers to Implementing the CNMP, and can be
identiﬁed in more detail in shaded section of Table 7.3. Of the four components,
available land base to spread manure was most Often mentioned when listing the barriers
to implementing the CNMP. Often, previous to MAEAP veriﬁcation, the Operator did
not consider manure’s nutrient composition when spreading manure; this omission
allowed the livestock producers to spread manure repeatedly on the same ﬁelds.
Spreading manure on a growing crop was also a difﬁculty for many Operations. Crop

rotation, time restraints, and location of the ﬁeld were many of the reasons that limited

this practice.

Table 7.3: Percent of Producers that Identiﬁed Elements of Land Components as a
Barrier to Implementing the CNMP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beef Dairy Poultry Swine Total CAFO AF 0
Percent
Land components 100 30 50 33 41 50 31
Land base 33 30 50 33 34 50 ‘ 15
Manure book values 67 0 25 17 17 13 23
Crop rotation 33 10 0 8 10 19 0
Drivingdistance to spread manure 0 0 25 8 7 13 0
N 3 10 4 12 29 17 12

 

 

After examining 19 of the 25 CNMPS that had soil analysis available for all
operated acres, there were only seven operations that had ﬁve percent or more of their
operated acres that tested above 300 pounds Of phosphorus per acre (Figure 7.4). As the

percentage Of acres unavailable for manure application due to high soil phosphorus test

135

levels increased, the length of time it took the operation to become MAEAP veriﬁed was

lengthened.

Figure 7.4: Number of Years to Become MAEAP Veriﬁed in Relation to the Percent
of Acres with a Soil Test Value Above 300 Pounds of Phosphorus per Acre

 

 

3.5

I"
to Utw

Years to Become MAEAP Veriﬁe
U.

 

 

 

 

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Percent of Operated Acres with a Soil Test > 150 ppm

 

 

 

Upon examining the number of livestock producers that must travel further to
spread manure as a result of following their CNMP, ten of the 31 operations needed to
have manure spread from one to 12 miles further to ensure manure was spread at
agronomic rates. This increased distance often added to the operators’ fuel, equipment
usage, and labor costs. The largest barrier to becoming MAEAP veriﬁed was perceived
to be the proximity to suitable, available cropland to spread manure. After interviewing
29 livestock producers that were MAEAP veriﬁed, proposition number eight, which
states the largest barrier to become MAEAP veriﬁed was the proximity to suitable,

available cropland to spread manure, was supported by the data.

136

Proposition 9: More manure was spread according to agronomic needs after
a farm became MAEAP veriﬁed than before veriﬁcation.

Many producers did not have enough information before writing their CNMP to
understand they were over-applying manure in some ﬁelds. Twenty producers increased
the amount Of soil and/or manure tests they have taken regularly as part of veriﬁcation.
With the increase in soil and manure nutrient tests, producers were more informed about
the nutrient details of their farm.

Eighty-six percent of the 31 MAEAP-veriﬁed producers interviewed agreed that
becoming veriﬁed through MAEAP helped them become better stewards of the land. For
example, producers have decreased the potential for phosphorus runoff from ﬁelds by not
spreading manure on soil that tests above 300 pounds Of phosphorus per acre (150 ppm),
which was a requirement in the CNMP for MAEAP veriﬁcation.

The P-Index score, which relates directly to the source and transport of
phosphorus on each ﬁeld, was also decreased due to the changes made for MAEAP
veriﬁcation. The 12 high risk operations decreased their P-Index score by an average of
4.0. Additionally, 11 producers spread less commercial phosphorus and/or nitrogen.
Data support proposition number nine; more manure was spread according to agronomic
needs after a farm became MAEAP veriﬁed.

7.3 Summary

Although no formal hypothesis tested occurred in this thesis research due to the
small sample size, several propositions were supported or refuted by the data. It was
found that liability and regulatory risk was the largest motivator to initiate livestock

producers to become MAEAP veriﬁed. The largest barrier to implement the CNMP was

137

not a speciﬁc capital investment, but rather the amount and proximity of available
cropland to spread manure. Additionally, MAEAP-veriﬁed operations were spreading
more manure according to agronomic needs, after attending a MAEAP educational
seminar and implementing the changes required for veriﬁcation.

An operation seeking MAEAP veriﬁcation made more changes linked to
management rather than capital investments. The producer plus taxpayer and the
producer cost of the managerial changes were greater than the costs related to capital
investment changes, although no management changes were eligible for EQIP cost-share
funds. The amount Of ﬁnancial assistance (i.e., EQIP cost-share) an operation received
was associated (r = 0.59) with the increased cost Of capital investments implemented for
pollution prevention.

It was expected that the costs associated with MAEAP veriﬁcation were not
proportional to the gross farm revenue Of the operation. However, it was determined,
through producer-reported data that, in fact, the producer’s costs were proportional to the
operation’s gross farm revenue. This proportionality included the EQIP cost-share
Operators received. On a per animal unit basis, the average annual cost a producer paid to
become and maintain MAEAP veriﬁcation has decreased over time. The producer cost to

have the CNMP written has remained nearly the same over the four-year timeframe.

138

Chapter 8: Summary and Conclusions
8.1 Summary

Nutrient management has become increasingly important for Michigan livestock
producers. The challenge for producers has been to reduce their Operation’s
environmental impact and to manage farm nutrients in an environmentally sound manner,
while at the same time maintaining economic viability. In 1998, a voluntary program, the
Michigan Agriculture Environmental Assurance Program (MAEAP), was created by
multiple Michigan industry, university, and governmental agencies to assist livestock
producers with their nutrient management. MAEAP veriﬁcation occurs after the
Michigan Department of Agriculture (MDA) veriﬁes that the farm has an accurate and
complete Comprehensive Nutrient Management Plan (CNMP) and that the producer has
or will implement the pollution prevention practices or improvements presented in the
CNMP.

To determine the effectiveness of MAEAP, interviews were conducted with
MAEAP-veriﬁed farm operators. These operations were not representative Of all
Michigan farms, as this set only included livestock producers that were MAEAP veriﬁed,
or nearly MAEAP veriﬁed, as of January 1, 2005. The 29 livestock operators
interviewed in this research represented 63 percent of all MAEAP-veriﬁed livestock
operators. The interviews gave researchers a better understanding of the magnitude and
incidence of speciﬁc costs associated with the record keeping, plan writing, managerial
changes, and capital investments required to implement and maintain MAEAP
V veriﬁcation. Farm-speciﬁc CNMPs were collected and analyzed to determine the

environmental changes that resulted from MAEAP veriﬁcation on speciﬁc Operations.

139

This thesis research examined three questions. First, what were the barriers faced
by and motivations of the livestock producers who became veriﬁed in the voluntary,
education-based program? Second, what costs were incurred by those Operators who had
become veriﬁed under MAEAP? Finally, what environmental impact did MAEAP
veriﬁcation have on the phosphorus mass balance and phosphorus index of those
MAEAP-veriﬁed operations? This thesis research was original in that neither farm-level
ﬁnancial, nor environmental impacts associated with MAEAP veriﬁcation were
undertaken by previous evaluations (Farrell, 2002 and USDA-NRCS, 2003).

8.2 Review of Research Findings

The ﬁrst research question examined the barriers and motivations livestock
producers faced when becoming MAEAP veriﬁed. The largest barrier for the majority of
operations (41 percent) was the availability of land for manure spreading, whether it was
associated with the amount of cropland, phosphorus levels on the land, crop rotations, or
driving distance. Financial stress was not identiﬁed as a strong barrier. It should be
noted, however, that 74 percent Of the producers interviewed received cost-share funds to
help pay for their CNMP, and 28 percent received cost-share funds to help pay for their
capital investments.

While 58 percent of producers interviewed in this research became veriﬁed
because of their expectations with respect to regulations affecting their size or type of
farm, all of the 29 producers agreed that they would maintain and update their CNMP.
The positive feedback and desire to maintain and update their farm-speciﬁc CNMP
suggested that producers should maintain the management scheme changes that already

had been made and will update the CNMP to follow new laws and regulations. Neither a

140

concern about the drinking water on the farm nor a landlord or agricultural lender
encouraging or requiring a CNMP motivated livestock producers (N = 0) to become
MAEAP veriﬁed. It was surprising that 1) more time dedicated to farm management, 2)
insurance discounts, and 3) community awareness motivated few producers (3, 6, and 13
percent respectively).

The second research question examined the costs incurred by livestock Operators
to achieve MAEAP veriﬁcation. Results indicated by the average producer spent
$104,423 in total or $14,709 annually on capital investments and managerial changes to
maintain MAEAP veriﬁcation. At the same time, some producers revealed that
veriﬁcation resulted in a modest savings that offset these costs. The savings were
realized through the use of less commercial fertilizers ($2,792 annually) and insurance
discounts ($61 annually), but the savings did not, on average, exceed the annual cost of
the capital investment and management changes ($14,709). The largest average cost
incurred was for the addition of phytase to swine and poultry diets (phytase enables swine
and poultry to digest phosphorus more efﬁciently, excreting less phosphorus in the
manure), at an average annual cost of $4,022.

Livestock producers who applied for MAEAP veriﬁcation were eligible for cost-
share assistance through the Environmental Quality Incentive Program (EQIP),
distributed by the Natural Resources Conservation Services (NRCS). The average total
cost-share funds given to the interviewed operators through EQIP, including the
opportunity cost of free CNMPS was $16,177 or $790 each year. Eighty-ﬁve percent of

the small and medium operations, AFOS”, received some form Of cost-share to assist

 

3° An AFO produces fewer than 1,000 animal units annually, while a CAFO produces more than 1,000
animal units. One animal unit is the same as: 1 feeder calf, heifer, or steer; or .7 mature dairy cow (whether

141

with the cost of writing the CNMP or adding speciﬁc capital investment changes3 '. On
average, AFOS received $113.07 per animal unit to assist with the costs, while CAFOS
received an average Of $7.10 per animal unit. Even with the substantial amount of cost-
Share received per animal unit, AF Os on average, paid $12.11 per animal unit per year to
become and maintain MAEAP veriﬁcation. CAFOS paid only $3.75 per animal unit per
year for veriﬁcation.

The average producer spent $7.53 per animal unit annually, and used 0.76 percent
of their annual gross farm revenue to become MAEAP veriﬁed. Poultry operators spent
the most money per animal unit annually ($12.89) to become MAEAP veriﬁed followed
by the beef producers ($9.71), swine producers ($6.16), and dairy producers ($5.97).

The third research question regarding the environmental impact of MAEAP on
the phosphorus mass balance and phosphorus index of MAEAP-veriﬁed operations
revealed that veriﬁed operations did reduce their phosphorus pollution potential. Ninety-
two percent of 25 operations surveyed were in mass balance after they became MAEAP
veriﬁed. With operations in mass balance, the potential phosphorus build up in the soil
on these farms was diminished. The 12 high risk operations had a P-Index score above
the threshold (18) before they became MAEAP veriﬁed. As a result of implementing
additional agronomic ﬁeld management practices and reducing the amount of ﬁeld
erosion, these high-risk livestock operations reduced their ﬁeld P-Index score average to

below 15. The P-Index score of these operations, after becoming MAEAP veriﬁed, was

 

a milking or dry cow); or 25 swine weighing over 55 pounds; or .5 horse; or 10 sheep or lambs; or 55
turkeys; or 100 laying hens or broilers when the facility has unlimited continuous ﬂow watering systems; or
30 laying hens or broilers when facility has liquid manure handling system (MDEQ, 2005).

3 ' Capital investments that were eligible for EQIP cost-share funds included: manure storage, drainage,
gutters, fences, buildings, roofs, grass waterways, buffers, and drives/berms.

142

below the threshold, which indicated that a low risk Of phosphorus runoff potential from
a ﬁeld had been achieved.

Interviews with livestock producers who implemented the CNMP also provided
some additional noteworthy insights. The impression gained by the interviewer from the
producers was that the producers believed there were some intangible beneﬁts that
accompanied MAEAP veriﬁcation. For example, several producers felt that they were
making a difference in their community, in the environment, and across the state by
becoming MAEAP veriﬁed. Many producers wanted to help their colleagues understand
the beneﬁts to environmental stewardship. Nearly all producers (86 percent) stated that
they would have become MAEAP veriﬁed without EQIP cost-share funds, but the
“money certainly helped lower the ﬁnancial strain.” Some producers stated that they
were more motivated by how they could make their Operation more efﬁcient and
productive due to MAEAP veriﬁcation. Many Of the Operators began the MAEAP
veriﬁcation process before the current regulations were in place, however, some were
disgruntled with the “moving target” they were required to attain. A few operators
thought a legislative change would be appropriate so that, if a lawsuit was ﬁled against a
MAEAP-veriﬁed livestock producer, the person bringing the suit would be responsible
for paying for legal fees, should the livestock producer win the case.

8.2 MAEAP’S Effectiveness

MAEAP has not been growing rapidly in numbers of veriﬁed producers. There
are 53,315 farms (USDA-NASS, 2002) in the state and over than 200 MAEAP-veriﬁed
operations (Wilford, personal communication, January 2006). However, the ﬁrst phase

of MAEAP veriﬁcation, the education portion, has had over 4,500 participants since

143

2001. Many of the changes implemented on an operation were due to an increased
knowledge and understanding of agronomy, water ﬂow, record keeping, animal
management, and environmental regulations. It is possible that environmental
stewardship could be increasing all over the state regardless of the number Of veriﬁed
Operations, because of the number of livestock Operators attending the informational
sessions. MAEAP’S additional veriﬁcation phases increases the probability that the
knowledge gained from the informational sessions is implemented.

Also, there was a decreased risk of phosphorus runoff on the high risk operations
and nearly all Operations were in crOpland mass balance after they became MAEAP
veriﬁed. Environmentally, MAEAP has had an impact, but on a small scale. Perhaps the
addition of the Progressive Planning32 initiative will involve more livestock producers in
pollution prevention. As of December 31, 2005, there were 218 livestock producers that
had signed up for this new initiative (Wilford, personal communication, January 2006).
8.3 Policy Enhancement and Development Inﬂuencing MAEAP

Increasing environmental quality can be stimulated via larger beneﬁts for
pollution prevention accruing to the participants or by increased mandatory regulations.
From the information collected from the MAEAP-veriﬁed livestock producers, CNMP
plan writers, and MAEAP administrators, it was found that some regulations and policies

affecting the CNMP organization and MAEAP effectiveness could be improved.

 

32 MAEAP Progressive Planning was introduced January 1, 2004 as a formal method to “enroll” in
MAEAP, or begin the process of MAEAP veriﬁcation. Each producer works with a partner to help act as a
clearinghouse of information, assist in any resource needs, and answer any questions that arise during the
veriﬁcation process. A schedule is developed by the producer and his/her partner to assist the livestock
producer in reaching speciﬁc goals to complete his/her CNMP and with the ultimate goal of becoming
MAEAP veriﬁed.

144

8.3.1 Comprehensive Nutrient Management Plan Order and Calculations

If the CNMP is to be a producer-friendly document, referred to for daily or
weekly nutrient management assistance, then the format of the CNMP needs to be
adapted slightly to meet livestock producer needs. The CNMP has a list that easily
identiﬁes what information should be included under each topic area, (Appendix E). A
livestock producer should be familiar with all the information in their farm-speciﬁc
CNMP; however, much of the practical information that livestock producers need is
obscured by the technical information. A more accessible document would have the
practical information commonly used by livestock producers, such as ﬁeld data and
spreading recommendations, could have its own separate binder for on-farm use or a
Speciﬁc section at the beginning of the CNMP. The CNMP components could remain the
same following the producer-speciﬁc section.

If enforcement or impact research is to be accurate, both from an NPDES permit
and MAEAP prospective, then the CNMPS need to evaluate animal units, soil tests,
MARI, and RUSLE2 calculations using consistent methods. Currently, animal units can
be measured using actual weights, noses, or an older version of book values. One method
should be chosen based on scientiﬁc research and accuracy. Also, the Bray P-l test has
been proven to give inaccurately low P values on many calcareous soils (Sawyer &
Mallarino, 1999). The imprecision of the Bray P-l, on Michigan’s calcareous soils could
lead to inaccurate agronomic advice. To eliminate inaccuracy in determining the soil
phosphorus level and P-Index variables the Mehlich-3 test could be used (Appleby,

personal communication, October 2005).

145

8.3.2 Increased Beneﬁts for MAEAP Veriﬁcation

In 2008, there will be no regulations motivating CAFO operators to become
MAEAP veriﬁed because permits will be mandatory. If MAEAP wants more small and
medium operations to become veriﬁed, then there may be need to increase the beneﬁts
received after an operation becomes MAEAP veriﬁed or an increase in costs for those
operations that do not become MAEAP veriﬁed, unless these producers feel they can
avert future regulation by being proactive. Under a voluntary approach, economic theory
suggests that a livestock producer will not participate unless his/her payoff is at least as
high as it would be without participation, i.e., the producer must perceive some gain (or
at least no net loss) from participation (Alberini & Sergerson, 2002). Increased beneﬁts
could include an increased preference to MAEAP-veriﬁed operations for EQIP cost-share
funding or additional nuisance litigation protection. Increased costs for those operations
not becoming veriﬁed could be linked to increased membership dues for species-speciﬁc
trade organizations (i.e., Beef Producers Council and Michigan Milk Producers
Association) or lenders requiring a CNMP for agricultural loans.

8.3.3 Targeting Finances to Critical Source Areas

“Overall phosphorus management strategies will reduce phosphorus export [from
ﬁelds] most effectively when targeted to critical source areas in a watershed that are most
vulnerable to phosphorus loss” (Sharpley et al., p. 2, 1999). Targeting money to the
operations with direct and/or chronic pollution discharges to increase environmental
stewardship would be more cost effective, than widely spreading money among the many
operations that need assistance for pollution prevention activities. A cost effective

method of targeting would be to focus MAEAP on priority areas and then priority farms

146

within those areas (Batie, 1994). If MAEAP and EQIP were to target higher animal
density areas, polluted watersheds, or critical watersheds then, more cost effective
pollution prevention could result. Currently, MAEAP does not target operations and the
NPDES permit is targeted only at those operations that have above a speciﬁc number of
animal units or which have previously had a discharge. CAFOS may offer a larger
potential pollution problem due to their size; however, any size of operation could have a
chronic and/or acute discharge into surface water. Given a pool of willing participants,
information on the operation (i.e., soil quality in ﬁelds to be enrolled and farms’
proximity to surface water) could be used to assess potential environmental beneﬁts if the
operation became MAEAP veriﬁed. Environmental indices, like the Environmental
Beneﬁts Index (EBI) or phosphorus index, could then be used to efﬁciently rank the
operations (Catteneo, Claassen, Johansson, & Weinberg, 2005).

8.3.4 Environmental Quality Incentive Program Portfolio

If EQIP cost-share is going to affect cash ﬂow and improve environmental
quality, then the NRCS needs to evaluate the portfolio of capital and managerial
investments covered through EQIP cost-share funds. The largest annual expenses
livestock producers incurred, according to this research were fuel to haul manure further
or incorporate manure ($4,022), feed additives ($3,089), and manure storage ($1,678).
Manure storage was the only cost, of the three mentioned, that was eligible for EQIP
cost-share. To assist more livestock producers in saving money, it would be ideal if cost-
sharing also covered some managerial changes. Equipment to incorporate manure along
with feed additives and diet changes could assist the producer in becoming more efﬁcient

and increase environmental stewardship. Phytase and other feed rations that reduce the

147

amount of phosphorus in manure also help the producer in possibly lowering the fuel and
equipment use as a larger amount of manure could be applied to a ﬁeld, while still
maintaining the same P205 rate per acre. NRCS evaluates its portfolio of EQIP-eligible
investments each year but, currently ﬁnancial assistance supports only those operations
that implement one of the few eligible capital investments rather than changing the
management practices.

8.3.5 Manifests

Animal density is a huge concern in several counties throughout Michigan. The
increasing trend towards intensive animal Operations on relatively small area of land
could lead to nutrient applications on cropland in excess of crop requirements and the
subsequent buildup of phosphorus in the soils (Maguire & Sims, 2002). If manure
application was limited to not exceed the soil nutrient capacity of the acres within a
geographic area, then all sizes of livestock operations in that area must indicate where
their manure would be Spread. If the manure is sold off-farm, then the manure buyer
must indicate what he/she will do with the manure. This increased transparency as to the
fate of animal wastes would help eliminate any geographic areas that exceeded its
nutrient capacity. This policy would be similar to the “manifest” that will be required,
beginning in 2007, by all operations with a general NPDES permit. MAEAP could apply
the “manifest” to farms within a targeted geographic area. The end use of manure is vital
to ensuring agronomic applications are being adhered to throughout the state, irregardless

of the size of operation that produced the manure.

148

8.4 Limitations of this Study

Although this study examined many variables linked to the effectiveness of
MAEAP, there were some calculations that that were limited in size, scope, and detail,
several variables that were not captured, and variables that could have been
misrepresented by the interviewee. The number of livestock producers that met the
sample criteria was few, only 46. A larger sample size over a longer period of time
would have allowed more statistical analysis to be conducted. The infancy of the
program also limited the amount and integrity of trend analysis.

There were some environmental outcomes not captured well or at all in this
research, such as barnyard management, ﬁeld drain tiles, habitat management, and the
trade off between incorporating and kniﬁng manure. As indicated by the 2005 Hively
study, barnyard management can be a large contributor of phosphorus runoff on an
operation, but the calculation of this contribution was beyond this study.

One measure of environmental change that was captured in this research was the
ﬁeld speciﬁc phosphorus index. However, the phosphorus index used in this study is still
being developed for the state of Michigan. Thus, the acceptable P-Index threshold, 18,
may not be accurate, as the index has not been formally ﬁeld tested yet. This P-Index
may have overlooked several variables such as irrigation, spreading setbacks Observed, or
manure texture and may not weight variables appropriately as some contribute to a larger
vulnerability to phosphorus transport than others. Additionally, if a ﬁeld had a soil
phosphorus level above 150 ppm, but had a transport score of zero, the transport of
excess phosphorus into surface water would be severely limited. However, due to the

organization of the P-Index the ﬁeld may still exceed the threshold and thus the

149

implication is that no additional phosphorus should be applied. Although the index used
in this study may not be the index adopted by Michigan, it was the best agreed upon P-
Index by a group of Michigan manure management specialists, soil scientists, and CNMP
plan providers.

The research was conducted via personal interviews; humans are limited in their
ability to process all relative information. Thus, some costs could be the perceived or
remembered amounts instead of actual costs incurred. Some Operations took three years
to become veriﬁed and within those years many changes occurred. Some history may
have been lost as an operator may not have been able to sum up all changes made due to
MAEAP veriﬁcation during the sometimes long veriﬁcation process. Operators may
have made investment or managerial changes based on education they received through
MAEAP, but these changes may not have been required for veriﬁcation. Much of the
information collected was not documented on paper by the livestock producer; thus, the
livestock producer’s estimates were used. Any information collected during the
interview was taken as truth; therefore, some of the information used in this research
could have been exaggerated or discounted.

Evaluating MAEAP environmental outcomes and cost analysis should have
occurred using a “with and without” framework rather than a “before and after”
framework. The “with and without” framework would have held constant variables that
may have inﬂuenced the phosphorus balance outcomes, whereas the “before and after”
could not. Several variables that may have inﬂuenced the “before and alter” phosphorus
balance changes included regulation changes, additional education, input cost

ﬂuctuations (i.e., fuel, feed, or labor), EQIP cost-share funding, or technology advances.

150

These variables wOuld have been difﬁcult to hold constant overtime for this study, yet
they could have altered the producers’ decision making process regarding MAEAP, as
well as the producer’s capital investment or managerial practices. These variables could
have caused correlation between two other variables (i.e., spurious correlation) (Burns,
1997). Evaluating a program using the “before and after” framework lends itself to
spurious correlation, because the statistical relation could have been initiated by a third
unrelated variable (Burns, 1997). Nevertheless, a “before and after” framework was used
to proxy the “with and without” MAEAP veriﬁcation context because the unknown
variables that could have caused some of the changes or encouraged veriﬁcation could
not be pinpointed and/or estimated. Due to the proxy, the changes that would have
occurred if the regulations, education level, inputs, cost-share, or technology would not
have changed were not captured.
8.5 Recommended Future Research

From the research conducted in this study and the limitations drawn, there are
several studies that would add to the evaluation of MAEAP in the future. Additional
research focusing on the education and environmental implications of MAEAP could
help determine what level of beneﬁt MAEAP has compared to the NPDES permit or no
CNMP. The environmental impacts of the barnyard would add greatly to the risk
assessment of an operation and the amount of runoff reduced due to MAEAP-required
changes. Identifying who should receive ﬁnancial beneﬁts for cost-effectiveness could
assist MAEAP administrators in using resources more accurately.

Three types of operations: 1) operations seeking MAEAP veriﬁcation; 2)

operations seeking an NPDES permit; and, 3) operations seeking neither (i.e., the control

151

group), would need to be evaluated to accurately assess the level of environmental
stewardship change over time, the affect of the educational phase MAEAP requires, and
motivation for choosing the environmental path. This type of analysis would indicate
what level of environmental stewardship the MAEAP-veriﬁed operations had in place
before any CNMP changes were implemented. It could then be determined how the
operation’s environmental stewardship changed and how the education affected the three
types of operations. Those livestock participants not becoming veriﬁed could give more
insight about the level of change in environmental stewardship, beneﬁts, perceived costs,
and barriers. The livestock producers that chose not to participate in MAEAP would
offer a different perspective about the perceived beneﬁts or lack of beneﬁts that prevent
producers from becoming MAEAP veriﬁed. This sample population could also indicate
what areas MAEAP could improve to increase the number of MAEAP-veriﬁed
operations and ultimately its effectiveness.

Evaluating several farms in the process of seeking MAEAP veriﬁcation with
more detail, beginning with before an operation became MAEAP veriﬁed and ending
several years after the operation acquired MAEAP veriﬁcation, would increase the
accuracy of the environmental beneﬁts, costs incurred, and efﬁciencies gained due to
MAEAP veriﬁcation. Analyzing an operation on a ﬁeld by ﬁeld basis would lead to a
detailed assessment of the ﬁeld and whole-farm phosphorus runoff potential. The impact
of incorporating or surface applying manure; Observing set-backs; planting grass
waterways, cover crops, buffers, and ﬁlter strips could add depth to an evaluation of

MAEAP’S environmental outcomes, as well.

152

Currently, there is no widely accepted method to calculate the environmental
change of the barnyard (i.e., lagoons, driveways, roofs) (Hively et al., 2005). Capturing
the environmental outcomes of the barnyard management changes made for MAEAP
veriﬁcation would add depth to this research and any other research focusing on the
environmental impact of programs such as MAEAP or the NPDES permit. An index or
model used to measure the risk of pollution from the barnyard would increase the
exactness of this environmental analysis on an operation that implemented barnyard
changes.

Financial and technical incentives were not mentioned as a strong motivator to
become MAEAP veriﬁed. If MAEAP administrators want to know to whom to target the
ﬁnancial incentives and beneﬁts then, the characteristics of those operators that obtain
EQIP cost-share funds, insurance discounts, low interest loans, and other ﬁnancial
opportunities due to MAEAP veriﬁcation need to be examined. Some characteristics that
might need to be considered include geography, income level, age, number of animal
units, number of acres, previous enrollment in environmental programs (e.g., Pork
Producers Environmental Assurance Program, CSP, or CRP), type of Species produced,
insurance carrier, changes made due to MAEAP veriﬁcation, and total cost of
veriﬁcation. After identifying the need for and desire to seek ﬁnancial assistance,
additional incentives should be implemented.

One such example of ﬁnancial assistance that is linked to the adoption of a
voluntary program exists in Switzerland. In order for the Swiss livestock producers to
receive their government payments, they must cross-comply with the country’s

environmental program. They can choose to not adopt the program, but if the

153

environmental program is not adopted, the Swiss livestock producers do not receive any
form of government payments. It would be interesting to link a voluntary environmental
program, such as MAEAP, to state or federal programs (i.e., CRP, CSP, CREP, crop
payments). MAEAP could be linked with the Conservation Security Program (CSP) for
example. Livestock producers that have completed MAEAP veriﬁcation could receive an
extra payment, if the farm operation was in the CSP watershed. CSP payments are based
on the number of points an operation accumulates; MAEAP veriﬁcation could be
considered as one or several points. Payments designed to reward producers who are
already good environmental stewards will limit the cost-effectiveness of achieving new
environmental beneﬁts (Catteneo et al., 2005), but may complement other programs, such
as CSP, that target regions or producers with a high potential for environmental
improvement. Increased payments could also be given to those operations that have

multiple systems veriﬁed with MAEAP (i.e., cropping, homestead, and livestock).

154

APPENDIX A: Calculating Animal Units: Following Criteria from Permit MIG 010000
Compared to those criteria of the General Permit MIG 440000 (MDEQ, 2005)

155

The following table explains the methods used to calculate the number Of animal
units on an operation. Column A is used to calculate animal units for the general CAFO
permit on existing farms from December 2002 through December 2007. This column
uses the average body weight of a group, if the weight is not estimated or known, then the
number of animals in that group can be multiplied times the number indicated. If the
total number of animal units from the entire column sum to over 1,000 the operation is
considered a CAFO (see the example at the bottom of Column A).

Operators that are building new operations between February 2004 and April
2009 should calculate the number of animal units according to Column B, using the
permit MIG010000 standards. This method of calculating animal units does not sum the
entire column, but if one group (e.g., cattle or mature dairy cattle) has a total number of
head that sums to more than the indicated number then that operation is considered a
CAFO (see the example at the bottom of Column B). This column is based on number of
head rather than average or estimated weight. Under the new permit, MIG010000, one
animal unit is the same as: 1 feeder calf, heifer, or steer; or .7 mature dairy cow (whether
a milking or dry cow); or 25 swine weighing over 55 pounds; or .5 horse; or 10 sheep or
lambs; or 55 turkeys; or 100 laying hens or broilers when the facility has unlimited
continuous ﬂow watering systems; or 30 laying hens or broilers when facility has liquid

manure handling system. (MDEQ, 2004)

156

 

 

 

 

Animal Sector Column A: Column B:
ECOS MAEAP option andEermit M16010000: New
eneral Permit ource and Large CAFO
IG440000

 

Dec. 2002- Dec. 2007

 

Feb. 2004 - Apr. 2009

 

The threshold number of

 

ead it takes based on
nimal units, to be at 1000.

ot animal units, and group
re not added.

Ealculated based on head,

 

Blank columns indicate a group is not deﬁned for that
permit.

 

Beef: mature or feeder

1,000; each animal = 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cattle: heifers, steers, bulls, 1,000

cow/calf pair

Veal 1,000

Mature Dairy Cattle 700; each animal = 1.4 700

Swine over 551bs. 2,500; each animal = 0.4 2,500

Swine under 55 lbs. 10,000

Horses 500; each animal = 2 500

Sheep and lambs 10,000; each animal = 0.1 10,000

Turkeys 55,000; each animal = 55,000
0.02

Laying hens or broilers 100,000; each animal =

(continuous overﬂow 0.01

watering)

Laying hens or broilers 30,000; each animal =

(liquid manure) 0.03

Laying hens or broilers 30,000

(liquid manure handling)

Chickens other than laying 125,000

hens, includes pullets

(other than liquid manure)

Laying hens (other than 82,000

liquid manure)

Ducks 5,000; each animal = 0.2

Ducks (other than liquid 30,000

manure)

Ducks (liquid manure) 5,000

All other (e. g., pullets, 1 lb of body weight = 1

heifers, veal)

 

A.U.

 

 

157

 

 

 

Total animal groups,
<1 ,000 not a CAFO,
>1,000 is a CAFO

Groups are not additive. If
any group is > its speciﬁed
number, it is a large CAFO

 

 

Example: 600 mature
dairy cows and 600
replacements averaging
850 lbs.

 

600 young stock x 850 lbs.
+ 1000 = 510 A.U. + 600
mature x 1.4 = 840 A.U. =
1350 A.U. YES, a large
CAFO.

 

600 young stock is less than
1000. 600 mature cows is
less than 700, these groups
are NOT added. NOT a
large CAFO.

 

158

 

APPENDIX B: NPDES General Permit (MIG440000)
(MDEQ, 2005)

159

PERMIT NO. MIG440000

MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY
NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM

GENERAL PERMIT
CONCENTRATED ANIMAL FEEDING OPERATION

PART I

Section A. Water Pollution Control Requirements and Limitations

3. Manure and Wastewater Storage Structures

The perrnittee shall have large CAFO waste storage structures in place and operational
that are designed, constructed, maintained and operated to contain the total combined
volume of all of the following:

a.

All process wastewater, production area wastewater and manure resulting
from the operation of the CAFO generated in a six-month time period or other
time period as deﬁned by the United States Department of Agricultural
Natural Resources Conservation Service (NRCS) standards (including normal
precipitation and runoff in the production area during the same time period);
All production area waste from a 25-year 24-hour rainfall event. The
magnitude of the 25-year 24-hour storm event will be speciﬁed in the
certiﬁcate of coverage; and,

In addition to a. and b. above, manure and wastewater storage structures shall
include additional design capacity equal to the freeboard requirements in
NRCS Conservation Practice Standard N. 313, Waste Storage Facility.

The discharges in Part I.A.1.a. are not authorized unless the pennittee is in full
compliance with the requirements of this Part, Part I.A.3.

160

APPENDIX C: Plan Writer Cover Letter, Survey, and Results

161

Plan Writer Cover Letter

October 22, 2004
Dear Comprehensive Nutrient Management Plan (CNMP) provider,

You were identiﬁed as being a certiﬁed CNMP writer by the Michigan Department of
Agriculture. We would like to enlist your support in a Michigan Agriculture
Environmental Assurance Program (MAEAP) survey we are conducting to learn more
about livestock producer experience with nutrient management. This study is designed to

gain knowledge from your experience with writing CNMPS for livestock producers.

The information gathered in this survey will be used to help design livestock producer
surveys relating to CNMPS. We want to ensure the questions we ask livestock producers
are both relevant and necessary to learn about the ﬁnancial and environmental

implications of nutrient balancing using MAEAP, NRCS and/or DEQ CNMPS.

Your voluntary participation in this survey will take less than thirty minutes. To consent
to participation you need only complete and return this three-page survey in the
accompanying postage paid envelope. Please note you are free to decline to answer the
questionnaire or speciﬁc questions without penalty, if you choose. If you wish to
comment on any questions, please feel free to use the space in the margins. We will keep
your responses from this survey in strict conﬁdence. Your privacy will be protected by

the maximum amount allowable by law.

162

If you have questions about the study, contact Christopher Wolf at 517-353-3974 or
wolfch@msu.edu. If you have any questions or concerns regarding your rights as a study
participant, or are dissatisﬁed at any time with any aspect of this study, you may contact -
anonymously, if you wish - Peter Vasilenko, Ph.D., Chair of the University Committee
on Research Involving Human Subjects (UCRIHS) by phone: (517) 355-2180, fax: (517)
432-4503, email address: ucrihs@msu.edu, or regular mail: 202 Olds Hall, East Lansing,

MI 48824.

Thank you for considering this request.

Sincerely,

Dr. Christopher A. Wolf
Department of Agricultural Economics
Michigan State University

(517)353-3974

163

Plan Writer Survey

From your experience in writing Comprehensive Nutrient Management Plans (CNMPS),

we would like to gain insight to your and producers’ difﬁculties, attitudes and costs when

writing and implementing a CNMP. This information will be applied to producer surveys

and interviews to ensure these are more accurate and complete. All of the information

you share will be conﬁdential. Thank you for your help in answering the following

questions.

1.

2.

How long have you been writing CNMPS?
How many CNMPS have you written and signed?
a. How many are started that are not complete?
b. How many resulted in MAEAP veriﬁcation?
c. How many are in process that are not yet signed?
Do you specialize in a speciﬁc type of farm? If yes, which type(s)?

What other services do you provide (i.e., rental agreements, soil testing)?

 

Who have you called with questions regarding CNMPS?

 

Who have you called with questions regarding MAEAP?

 

What, in general, are the most common areas of increased cost to a livestock producer

after implementing all phases of a CNMP?

 

What, in general, are the most common areas of savings to a livestock producer after

implementing all phases of a CNMP?

 

What commonalities (i.e., age, number of acres, and type of farm) do you see in the

livestock farms or producers you write CNMPS for?

 

164

10. Please rank the importance of issues a typical livestock producer needs to address to

have an approved CNMP? ( 1 very important to 4 not important)

1 2 3 4

Adding eves to barns C1 1:1 :1 Cl
Installing a catch area for silage leachate Cl 1:1 E] El
Proper winter manure spreading [1 1:1 1:1 1:1
More accurate and comprehensive soil testing C1 1:1 C1 1:1
Implementing manure testing C1 C1 1:1 1:1
Properly disposing of parlor wastewater 1:1 1:1 13 1:1
Changing/adding manure storage E] 1:1 1:1 1:1
Adding land to spread manure on (high animal density) C1 1:1 13 Cl
Changing their attitude towards advice and advisors 1:1 El 13 1:1
Changing their attitude towards the environment C] C1 E1 E1
Informing their neighbors of spreading times 1:1 Cl 1:1 1:1
Informing their neighbors of environmental stewardship :1 1:1 13 El
Paying for the CNMP implementation 1:1 1:1 1:1 1:1
Other 1:1 [:1 1:1 [I

 

11. What percent of the livestock farms that you have written (are writing) CNMPS for
involve the following changes?

100-75% 74-50°/o 49-25°/o 24-0%

Record keeping 1:1 1:1 El E1
Manure testing 1:1 [I] 1:1 1:1
Water testing upstream C] 1:1 C1 C1

165

Spreading

Less winter manure spreading

Inject manure

Incorporate manure

Calibrating Spreaders

Observe setbacks — using buffers

Haul manure further (even Spread on ﬁelds)

Spreading agreement with local land owner
Storage

Add manure storage

Account for freeboard

Manage leachate with holding tanks
Fields

Reduce commercial fertilizer

More frequent soil testing

More accurate soil testing

Monitor tiled ﬁelds’ drainage

Test tiled ﬁeld drainage (at end of pipe)

Manage leachate with ﬁlter strips

Increase acreage — rent more land

Increase acreage — buy more land
Lots/Pasture

Add grass to qualify as pasture

166

Add drains to collect runoff 1:1 13 C1 C1

Roof over a lot to deter runoff 13 Cl 13 1:1
Roof water kept clean 1:1 D 13 1:1
Other changes C1 C1 1:1 [I

 

12. What is the cost to a livestock producer for (a range is adequate)

Reducing commercial fertilizer $

 

Changing feed ration $

 

Having a plan written $

 

Implementing a plan $

 

13. What does the price you charge for a CNMP depend on? Check all that apply.
1:1 Farm Size (acreage)
Cl Farm size (number of animals)
C] Your time
E1 Number of tests needed
13 Number of existing, potential water quality problems
1:1 Adequate farm records
13 Animal species

13 Other

 

14. What records does the typical livestock producer keep before he/she has a CNMP?

 

15. What records does the livestock producer keep after a CNMP is implemented?

 

167

16. According to the type and size of the livestock farm and type of CNMP how much

time does it take you to write a plan?

 

 

 

 

 

Acres - crops Livestock number & NPDES MAEAP Time to
species Permit write
Size of farm 400, grain/veg 1500 swine X 30 hrs
Size of farm
Size of farm

 

 

 

 

 

 

17. Is there anything else you would like to share with us regarding the writing and/or

implementation of a CNMP, your opinions on MAEAP or other information you

think would be valuable to us as we interview producers in the next six months?

 

168

 

Plan Writer Results

Introduction

All Comprehensive Nutrient Management Plan (CNMP) plan writers that were
certiﬁed in Michigan (26) as of September 1, 2004 were surveyed in the fall of 2004 to
determine what questions should be asked of the MAEAP-veriﬁed livestock producers.
The survey indicated how the cost of a CNMP was calculated, what changes typically
needed to be made on an operation, any commonalities among MAEAP participants, and
what cost savings the livestock producers might realize after they become MAEAP
veriﬁed. This survey aided in the development of a larger survey targeted towards
MAEAP-veriﬁed operations that took place in January and February of 2005.

Methods and Procedures

The CNMP Plan Writer Survey was conducted through a mail survey of 26 plan
writers throughout the state of Michigan. All certiﬁed plan writers were selected for the
survey since the number of plan writers was limited. The 2004 study did not include plan
writers from other states that may have written a CNMP in Michigan, nor did it include
any MAEAP program administers or committee members.

The survey questions were chosen to increase the researcher’s knowledge about
MAEAP-veriﬁed operations. The questions selected also addressed the changes an
operator needed to adopt for the CNMP and what the costs and saving an operator might
realize after fully implementing their farm-speciﬁc CNMP. Several Michigan State
University faculty and MAEAP program administrators reviewed the questionnaire.

Suggested changes were incorporated in the ﬁnal version. Since the survey was designed

169

 

to educate the researchers regarding livestock producers and the sample size was small, it
was not ﬁeld tested prior to use.

All 26 plan writers selected for the study were mailed a cover letter explaining the
need for the study, the three—page survey, and a postage paid return mailer during the
month of October. Of the 26 questionnaires mailed, 14 or 54 percent were completed and
returned. This high response rate provided an accurate measure to ensure the questions
asked of the livestock producers were relevant and necessary.

Results

The average plan writer surveyed had less than three years of experience writing
CNMPS (Table 1). The few years of experience was expected, as certiﬁcation
requirements to write CNMPS was also recent. However, plan writers wrote plans for
more operations than those operations seeking MAEAP veriﬁcation. About one in three
CNMPS written were for an operation seeking MAEAP veriﬁcation. When asked about
the average time it took to write a CNMP, the 14 respondents gave several scenarios, but
the average was about 70 hours to write. These scenarios also revealed that the average
farm seeking a CNMP, whether for MAEAP veriﬁcation or not, had about 1194 acres.
The average number of animal units could not be determined based on the varied answers

reported.

Table 1: Plan Writers Average Experience (Years and Number of CNMPS)

 

 

 

 

 

 

 

 

Years
Years of Experience 2.6
Number of CNMPS
Number of CNMPS completed 9.4
Number of MAEAP CNMPS completed 2.7
Number of CNMPS currently writing 4.]

 

170

The time it took to write a CNMP and the acres an operator owned were the two
largest variables that inﬂuenced the cost of the CNMP the most, 71 and 50, percent
respectively (Table 2). The number of soil and manure tests that an operation needed to
make also inﬂuenced the price of the CNMP (43 percent). To a lesser extent, the number
of animal units, farm records, and existing or potential water quality issues also
inﬂuenced the cost of the CNMP (36 percent). The number of operated acres on a farm
may be correlated with the number of animal units, which may mean that both variables
signiﬁcantly impacted the price of the CNMP. The plan writers indicated that a CNMP
could range in costs from $1,500 to $25,000; this range assisted in determining if a price

noted by a livestock producer was on target with what the plan writers were charging.

Table 2: Percent of Plan Writers that Used Each Variable to Calculate the CNMP
Price

 

 

 

 

 

 

 

 

Percent
Your time 71
Farm size (acreage) 50
Number of tests needed 43
Farm size (number of animals) 36
Adequate farm records 36
Number of existing, potential water quality problems 36
Animal species ' 29

 

 

 

 

The CNMP cost only included the writing portion and did not include the costs of
implementing the CNMP. Many of the changes listed in Table 3 required ﬁnancial
expenditure and while some required more management time. The plan writers surveyed
indicated that implementing a CNMP could cost between $0 and $400,000, in total. As
seen in Table 3, accounting for freeboard and additional recordkeeping occurred on over
75 percent of the CNMPS that the plan writers wrote. Manure needed to be hauled

further from the manure production and storage site (barnyard) than before the operator

171

implemented his/her CNMP (71 percent). Interestingly, more operations developed a
spreading agreement with their local land owner (57 percent) than changed their manure
application method to incorporation (45 percent) or injection (25 percent). These
questions helped develop several cost questions to decipher what costs a producer

incurred to become MAEAP veriﬁed.

Table 3: Percent of CNMPs that the Plan Writer Wrote that Implemented the
Following Changes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent
Account for freeboard 78
Record keeping 75
Haul manure further (to spread on ﬁelds) 71
Calibrating Spreaders 69
Observe setbacks — using buffers 68
Manure testing 68
Reduce commercial fertilizer 64
Monitor tiled ﬁelds’ drainage 62
More frequent soil testing I 60
More accurate soil testing 59
Spreading agreement with local land owner 57
Manage leachate with holding tanks 53
Add manure storage 53
Roof water kept clean 50
Add drains to collect runoff 48
Incorporate manure 45
Less winter manure spreading 40
Increase acreage — rent more land 38
Roof over a lot to deter runoff 33
Increase acreage — buy more land 27
Inject manure 25
Manage leachate with ﬁlter strips 25
Add grass to qualify as pasture 23
Water testing upstream 16
Test tiled ﬁeld drainage (at end of pipe) 14

 

172

The most important issues a plan writer believed a livestock producer needed to
address to have his/her CNMP approved were also captured (Table 4). The plan writer
rated the importance on a likert scale, 1 = very important, 2 = important, 3 = semi-
important, 4 = not important. No issue received less than a 2.6; leading the researchers to
believe that all topics were important for CNMP approval. The most important issues
regarding soil testing and manure storage were also implemented by more than 50
percent of the operations, as explained in Table 3. The least important issue from the
plan writers’ perspective was informing the operation’s neighbors of their environmental
stewardship. One plan writer even commented that producers do not want publicity on
their farm, thus the MAEAP Sign signifying the operation was MAEAP veriﬁed was
unnecessary and possibly not a large motivator. Different geographic areas may feel

differently about the neighbor relations, also.

Table 4: Important Issues Typically Addressed for CNMP Approval (1 = very
important, 2 = important, 3 = semi-important, 4 = not important)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Score
More accurate and comprehensive soil testing 1.7
Changing/adding manure storage 1.7
Installing a catch area for silage leachate 1.9
Adding land to spread manure on (high animal density) 1.9
Proper winter manure ﬂireading 1.9
Implementing manure testing 2.1
Changing their attitude towards advice and advisors 2.1
Addingeves to barns 2.1
Paying for the CNMP implementation 2.1
Properly disposing of parlor wastewater 2.3
Changing their attitude towards the environment 2.3
Informing their neighbors of spreading times 2.4
Informing their neighbors of environmental stewardship 2.6

 

 

173

All of the changes made on an operation had ﬁnancial or time repercussions.
When the plan writers were asked what were the most common areas of increased costs
or savings a livestock Operator incurred after fully implementing the CNMP, they
responded succinctly. From Table 5, 57 percent of the plan writers saw manure and
runoff storage as very common cost. It was not determined how much each variable
listed would cost the producer. However, 71 percent or ten plan writers commonly saw a
cost saving in commercial fertilizer due to implementing the CNMP. The amount of
savings operators obtained from less commercial fertilizer ranged from $3,000 to
$50,000. One plan writer thought producers could achieve a savings of about ﬁve dollars

per acre.

Table 5: Costs Producers May Incur that are Associated with Implementing a
CNMP

 

 

 

 

 

 

 

 

 

 

Percent

Increased costs

Manure and runoff stoge 57
Reduced and/or applying runoff 29
Controlling silage leachate 21
Controlling milkhouse waste water 14
Decreased costs

Commercial fertilizer 71

 

Conclusions

Developing and implementing the CNMP has a large cost range. It Should cost
the operator between $1,500 and $425,000 to develop and implement his/her CNMP.
There could be a cost savings of up to $50,000 occurring from following the CNMP
requirements and applying less commercial fertilizer. Two plan writers mentioned that
EQIP cost-share money took a long time or was difﬁcult to obtain to assist livestock

producers in paying for some of their costs associated with their farm-speciﬁc CNMP.

174

 

The plan writers commented that additional manure tests, manure spreading, and soil
testing records need to be kept up-tO-date on the operation; the process of writing a
CNMP would be much smoother with the added documentation. Plan writers felt that all
producers need to receive more education on the items necessary and rules involved with
CNMPS.

The CNMP plan writers that were surveyed provided valid and necessary
information to develop the livestock producer survey. These responses along with
additional ﬁeld testing will be used to further develop the MAEAP-veriﬁed Producer

Interview Questionnaire.

175

APPENDIX D: MAEAP Adoption Producer Interview Cover Letter, FAQ Page, and
Questionnaire

176

MAEAP Adoption Producer Interview Cover Letter

February 1, 2005

Dear livestock producer,

1 am Carrie Vollmer Sanders, a graduate student at Michigan State University. I grew up on a
swine and cash crop farm in Ohio and am currently working on my thesis for my master’s

degree. I’m asking for your assistance in completing my thesis.

You were identiﬁed as having a veriﬁed Comprehensive Nutrient Management Plan (CNMP)
for your farm. 1 would like to enlist your participation in a personal interview to learn more
about your concerns about the MAEAP program, the costs of implementing a CNMP and the
environmental improvements you anticipate once you have fully implemented your CNMP.
My objective is to assess how the state of Michigan can improve MAEAP and other
agricultural environmental policy development and implementation. These results will be
shared with industry, policy makers in Michigan and Washington as well as other producers.
This study will publish information in summary form so that ﬁndings will not be traceable to

you or your operation.

Cash payment for your participation will be $50, upon completing the interview. If you will
allow me to make a reference copy of your CNMP, which will be returned to you at the
completion of the study, you will receive an additional payment of $100. Temporarily having
a copy of your CNMP will help me analyze your Operation’s unique situation, make the
interview move much more quickly and enable me to quantify MAEAP’s environmental

effects. The information gathered and your CNMP will be held in strict conﬁdence.

177

I will contact you within the next week to set up a time to conduct the interview. Another
colleague will take notes during our conversation to ensure I don’t misconstrue your
responses. When I meet you, there will be a participation consent form for you to sign to
ensure conﬁdentiality. Please note that during the interview you are free to decline to answer
any speciﬁc questions of your choosing. As previously mentioned, we will keep your
responses from this interview survey in strict conﬁdence. Your privacy will be protected by

the maximum amount allowable by law.

If you have questions about the study, contact either Dr. Christopher Wolf at (517) 353-3974
or wolfch@msu.edu; Dr. Sandra Batie at (517) 355-4705 or batie@msu.edu; or Carrie
Vollmer Sanders at (419) 553-0622 or vollmer3@msu.edu.

Thank you for considering this request.

Sincerely,

Carrie Vollmer Sanders
Department of Agricultural Economics

Michigan State University

If you have any questions or concerns regarding your rights as a study participant, or are dissatisﬁed at any
time with any aspect of this study, you may contact - anonymously, if you wish - Peter Vasilenko, Ph.D.,
Chair of the University Committee on Research Involving Human Subjects (UCRIHS) by phone: (517)
355-2180, fax: (517)432-4503, email address: ucrihs@msu.edu, or regular mail: 202 Olds Hall, E.

Lansing, MI 48824.

178

MAEAP Adoption Producer Interview Frequently Asked Questions

. What is this interview for?

0 To help Carrie Vollmer Sanders with her agricultural economics thesis research
0 To learn more about your concerns with MAEAP

0 To understand the full costs of implementing a CNMP

0 To identify the environmental implications once the CNMP is fully implemented
0 To recognize how Michigan can improve MAEAP for future applicants

0 To inﬂuence agricultural environmental policy development and implementation

. When will I be interviewed?

c We will set up an appointment at your convenience during February

. How long will the interview last?

0 About an hour and ﬁfteen minutes

. Do I have to answer all the questions?

0 No — you are free to decline to answer any speciﬁc questions of your choosing
. What happens with my CNMP?

0 A copy will be made of it

o The original will be returned to you via priority mail or in person

0 The copy will be mailed to you once the research is completed

. Is all the information conﬁdential?

0 Yes —published information will not be able to be traced back to you or your
operation
0 All documentation will be destroyed upon completion of the research

. How were you selected?

179

0 You have a veriﬁed farm through MAEAP
8. If I agree what and when will I be paid?
0 You will receive $50 for your interviewing
0 You will receive $100 for allowing me to make a reference copy of your CNMP -
the CNMP copy will be given back to you
0 Cash payment will be given to you upon completing the interview and making a

copy of your CNMP

180

MAEAP Adoption Producer Interview Questionnaire

I. Farm Status Yes No
1. Do you have a NPDES CAFO permit with MDEQ? 1:1 13
2. Do you have a CNMP that is verified through MDA? 13 D

3. Is your farm enrolled with the Pork Producers’ Environmental
Assurance Program? 13 Cl
If you answered no above and own swine, do you plan to register with the Pork
Producers ’ Environmental Assurance Program in the next 2 years? 1:1 1:1
11. Comprehensive Nutrient Management Plan — Now, we would like to know a little
bit about how you manage the nutrients on your farm. Your answers will help enhance
nutrient management education and ﬁnancial assistance programs.
1. When was your CNMP started?

2. When was your CNMP completed?

 

3. When was your CNMP approved?

 

4. Is your CNMP veriﬁed by MDA?

 

If yes, when was it veriﬁed?
5. What encouraged you to have a CNMP? Check all that apply.

13 a. Someone asked you to adopt (Who)

 

Cl b. Insurance discounts

1:1 c. Environmental regulations directed at your size and type of farm

1:1 d. Mandated currently by regulation or you foresee it being mandatory
[3 e. Have a reduced risk of governmental ﬁnes

1:1 f. Increased concern about drinking water on your farm

181

E] g. Have a reduced risk of lawsuits

C] h. Became aware of a pollution problem on your farm

D i. Received technical and ﬁnancial assistance

[3 j. Mandatory for EQIP money

[3 k. Had more time to devote to managing your farm

E] 1. Your landlord encouraged/required it

D m. Your agricultural lender encouraged/required it

D n. Want the community to be aware of your stewardship effort

[I] o. Other

 

6. Which resources have you used in writing or implementing your CNMP? Check all
that apply.

[I] MSU Extension - Michigan State University Extension

[3 NRCS — Natural Resource Conservation Service

D MDEQ - Michigan Department of Environmental Quality

[:1 MDA —— Michigan Department of Agriculture

[:1 Private consultant

E] Conservation District Employee

:1 Michigan Milk Producers

C] Other

 

7. List the percent effort each of the following provided in writing your farm’s CNMP?

a. Yourself %
b. Plan writer/consultant that signed your plan %
c. An MSU Extension agent %

182

d. A family member or employee %

 

 

e. NRCS or Con. District ______%
f. Michigan Milk Producers _%
g. Co-op or elevator _%
h. Other %
TOTAL 100 %

8. Approximately how many hours of your personal time did you spend to get your
CNMP written (including consultation with the writer, information gathering, etc.)?

hrs.

 

9. How many hours do you spend annually to keep your CNMP updated? _______ hrs.
10. How much did or will you pay the plan writer(s) to write your CNMP? $______

11. To have a veriﬁed CNMP, what tests did you complete and what was the cost? If the
fees are covered in the cost of question #5 then simply check the tests you had completed

and how often you will have to update them in the future. How often...

 

 

 

 

[:1 Soil test $
D Manure test 33
[:1 Water test $
C] Engineering consultant $
[3 Other $

 

 

12. What were the largest barriers to implementing your CNMP (or other environmental

assurance program) changes on your farm?

 

13. What advice would you give your neighbor if (3) he was beginning to write his/her

CNMP?

 

183

14. Would you be interested in ever exchanging information with other similar producers

also implementing CNMPS? Why or why not?

 

15. Is there anything else you’d like to share with us about your nutrient management

plans? i.e., frustrations or things you wished you had done differently.

 

III. Farm Characteristics — Next we’d like to ask you a few questions speciﬁcally about
your farm, to get an idea about size and sc0pe of your operation. This will allow us to
better estimate the costs of implementing a CNMP.

Livestock Inventory

a. What have been the changes in livestock in the last two years?

 

Type of Enterprise Average Number per year Reason For Change_

 

Weight, #, meat, breeding Before CNMP After CNMP

 

 

 

 

 

 

 

 

b. What was your annual production last year? For example if you have laying hens,

number of eggs sold or if milking cows, pounds of milk sold.

 

Land, Crops & Facilities

1. Of the land you farm, how many acres do you own? acres
2. Of the land you farm, how many acres do you rent from others? acres
3. Of your owned land, how many acres do you rent to others? acres

4. What percent of the land you farm do you use the following tilling practices?

Before After
a. No-till _% _%
b. Minimal till _% _%
c. Conventional till _% %

184

TOTAL 100 % 100%

5. How many acres of the land you operate are... Before CNMP After CNMP
a. Tillable cropland in production acres acres
b. Animal pasture/ grazing acres acres
0. In government programs (CRP, ﬁlter strip) acres acres
d. Woodlot, unable to be tilled acres acres
e. Wetlands, unable to be tilled acres acres
Total acres acres

6. On average, how many acres of the crops below do you plant and what are the average

yields?
a. Corn — Grain acres bu./ac.
b. Corn - Silage acres ton /ac.
c. Soybeans acres bu./ac.
d. Wheat acres bu./ac.
e. Alfalfa & grass hay acres tons/ac
f. Dry Beans acres bu./ac.
g. Sugar beets acres unit _/ac.
h. Other acres unit _/ac.

 

7. How much fertilizer do you purchase to spread on your crops since you implemented

the CNMP? Nitrogen Phosphorous Potassium
a. Corn — Grain __ lbs/ac __ lbs/ac — lbs/ac
b. Corn - Silage __ lbs/ac __ lbs/ac __ lbs/ac
c. Soybeans _1bs/ac __ lbs/ac __ lbs/ac

185

d. Wheat lbs/ac lbs/ac lbs/ac

e. Alfalfa & grass hay __ lbs/ac __ lbs/ac __ lbs/ac
f. Dry Beans __ lbs/ac __ lbs/ac __ lbs/ac
g. Sugar beets __ lbs/ac __ lbs/ac __ lbs/ac
h. Other __ lbs/ac __ lbs/ac __1bs/ac

 

8. Have you changed the number of acres you plant to speciﬁc crops since you

implemented the CNMP and how much has the average yield changed?

Increase Decrease Yield Change

a. Corn — Grain acres acres bu./ac.

b. Corn - Silage acres acres tons/ac.

c. Soybeans acres acres bu./ac.

(1. Wheat acres acres bu./ac.

e. Alfalfa & grass hay acres acres tons/ac

f. Dry Beans acres acres bu./ac.

g. Sugar beets acres acres ___unit __/ac.
h. Other acres acres _unit /ac.

 

IV. Management and Capital Changes
A. Management
1. What type(s) of manure storage do you currently have?

a.

 

b.

 

 

186

2. Which describes your manure holding capacity before and after your CNMP? Check
all that apply.

Before After

:1 C] a. Daily haul to ﬁeld, no appreciable storage
[:1 [:1 b. Short-term storage, (0-3months)

[3 [:1 c. Intermediate storage, (3-5 months storage)
C1 C] d. Long-term storage, (at least six months)

C1 [:1 e. Other storage

 

3. If you put in new manure storage, what kind of storage did you put in?

 

4. Why did you change your manure storage facility? Check all that apply.
[:1 To reduce winter spreading
C] To account for freeboard
[:1 To account for the 24hr — 25yr event

[:1 Other

 

5. Has need for winter spreading changed your operation by
:1 Adding more storage
[:1 Finding more land

[3 Traveling farther to haul manure

 

 

 

[:1 Other
6. What manure records do you keep? Before After How often?
a. Freeboard height [:1 :1
b. Weather conditions when spreading [:1 D
c. Manure nutrient levels 13 D

 

187

d. Manure application time

e. Soil conditions you are spreading the manure on D

f. Spreader calibrations

 

 

 

7. Before writing your CNMP, how would you answer the following questions and does

the answer change after the CNMP has been implemented?

a. I know the rate at which I apply manure nutrients to the soil
b. I know the nutrient value of manure I apply to the soil

0. I change the amount of manure nutrients I apply based on

proximity to water sources & slope

d. I have the ﬂexibility to not apply manure nutrients when the

ground is frozen

e. When I know the manure nutrient value, I A the amount of

manure I spread

Yes No A
C] a
D a
CI [:1
D [:1
C1 [:1

8. Do you have a method in place to control the odor emitted from your manure

storage? Yes No

If yes, what method do you use?

 

Is this method new because of your CNMP?

Yes [:1

9. How far is the closest manure storage area (in ft.) from the following before and after

your CNMP? Before

a. From a creek, river, lake
b. From a wetland
c. From a well

(1. From a pond

188

feet

feet

feet

feet

feet

feet

feet

feet

10. What setback is observed (in ft.) from where you spread manure before and after your

CNMP? Before After
a. From a creek, river, lake feet feet
b. From a wetland feet 3 feet
c. From a well feet feet
(1. From a pond feet feet

11. What manure application method do you use (in %) before and after your CNMP?

Before After
a. Liquid injection _% _%
b. Liquid surface applied, no incorporation _% _%
c. Liquid surface applied, with incorporation _% _%
(1. Solid, no incorporation _% _%
e. Solid, with incorporation _% _%
f. Irrigation _% _%

12. Where does your milk house and parlor wastewater drain?

 

Will/has this change/d because of your CNMP? Yes [:1 No D

How did it change?

 

 

13. Where does your feedlot rainwater drain?
Will/has this change/d because of your CNMP? Yes [:1 No [:1

How did it change?

 

14. How do you control silage leachate?

 

Is this method new because of your CNMP? Yes D No {:1

Before After CNMP

189

15.

16.

17.

18.

19.

20.

21.

22.

How many acres of cropland that you operate have tiled or acres acres

drained ﬁelds?

How many acres of cropland that you own, are applied with acres acres
manure?
How many acres of cropland that you do not own are applied acres acres

with manure?

 

What percent of your farm’s manure do you sell to others? _% %

Is there a: Yes No Written 8 Share%
a. Manure contract for land you rent from others? C] D C] _ _
b. Manure contract for land you rent to others? Cl C] D _ _

If you rent land from/to others, are there nutrients application terms? YES NO

If there are terms, what are they?

 

If you spread manure on land but do not own or rent the land, is there any contract
terms regarding the nutrients applied to the soil? YES NO

If there are terms, what are they?

 

What is the distance (in road miles) to the cropland you spread manure on?

Owned Rented

_% _% O - 1 Mile
_% _% 1 - 2 Miles
_% _% 2 - 4 Miles
_% _% 4 - 8 Miles
% % > 8 Miles

190

23. Do you anticipate the need to seek alternative arrangements for manure application

within the next ﬁve years? Yes or No What?(i.e., location, equipment,

technologies) Why?

 

24. Did you add any new technologies to decrease the amount of manure needed to be

spread? What do they allow you to do differently?

 

25. What other changes did or do you plan to make in your farm operation to follow your

CNMP?

 

B. Financial

1. What are the changes in production volume and/or costs made solely for the CNMP?

(If you have not implemented the CNMP, what are your anticipated changes?)

 

Changes in Costs - %

Increase

0

Decrease

Remarks

 

Revenue from livestock

 

Animal density

 

Manure sales

 

Crop consultant/CNMP TSP

 

Soil tests (frequency and cost)

 

Manure tests (frequency & cost)

 

Equipment usage

 

Fertilizer bought: Phosphorous

 

Fertilizer bought: Nitrogen

 

Feed additives: diet changes

 

Feed bought off farm

 

Energy and utility costs

 

Fuel costs

 

Labor for manure spreading

 

Labor for manure storage

 

 

Labor for crop production

 

 

 

 

 

191

 

 

Labor for record keeping

 

Composting/Methane digesters

 

Supervision hours

 

Insurance premium

 

 

Other

 

 

 

 

 

2. Which of the following did you have to purchase or lease in whole or part to comply

with your CNMP? How much did it cost and what percent was cost shared?

 

 

Yes No Cost o/oCost Shared
a. Additional Machines/Equipment
1. For production E] D $ _%
2. Transport manure 1:1 [:1 $ %
3. Spreading manure C] E] $ _%
4. Calibrating manure [:1 C] $ ______%
5. GPS/GIS technology a D $ _%
6. Other E] D $ _%
b. Improvements/New construction
1. Manure Storage (:1 [:1 $ _%
2. Drainage E] D $ _%
3. Gutters [:1 D $ _%
4. Fences C] D $ _%
5. Buildings C1 D $ _%
6. Roofed lots C] D $ _%
7. Feed Storage D D $ _%

192

 

8. Grass waterways C] [:1 $ %
9. Buffers [:1 [:1 S %

10. Other Cl C] $ %

 

c. Additional land to spread manure

l. Purchased D E] $___ _%
2. Rented Cl C] $__ _%
d. Additional labor :1 [:1 $____ _%
e. Other [:1 a $____ _%

 

V. Opinions — This next section is solely your opinions; there is no correct answer. From
this section we will be able to better educate policy makers about your concerns
regarding the environment.

1. How serious are the following problems in your locality? Chose between 1 and 5, l =

not serious and 5 = very serious. Not -------- Very serious
a. Animal manure polluting ground and surface water 1 2 3 4 5
b. Ag fertilizer polluting ground and surface water 1 2 3 4 5

c. Ag pesticides & herbicides polluting ground/surface water 1 2 3 4 5

d. Municipalities polluting ground/surface water 1 2 3 4 5
2. In your county (several county area), if an agricultural producer were to pollute water,
which would be the most likely to cause a water problem?

D Beef cattle production

Cl Dairy production

E] Swine production

[:1 Poultry production

193

[:1 Crop production
[:1 Horticultural Production

[:1 Other

 

3. What are the most serious opportunities and threats to your farm operation in the next
5 years? Threats Opportunities
a. Changing commodity prices
b. Variable proﬁt margins
c. Vertical integration and contracting
(1. Government regulations on the environment__
e. Possible lawsuits or liability issues
f. Fluctuating interest rates
g. Urbanization
h. Exotic pests
i. Technology advances _ _

j. Diversiﬁcation/specialization of enterprises

k. Other

 

4. Do you think, given the cost of the CNMP, it was a worthwhile investment for the

environmental state of your farm? Please explain.

 

5. How would your attitude change towards CNMP and MAEAP if you were offered

more or less cost sharing to complete the plan?

 

6. If a farm has had a spill, do you think the owners should still be eligible for cost share

money? Why or why not.

 

194

7. Do you think the CNMP is the appropriate solution to eliminate any environmental

 

problem that may exist on a farm? Please explain.

8. Below are statements, please select the one of the following 1 = strongly agree 2 =

 

 

agree 3 = no opinion 4 = disagree 5 = strongly disagree SA A N D SD
My farm operation can be proﬁtable without causing or 1 2 3 4 5
contributing to any signiﬁcant water quality pollution.
My CNMP is so valuable to my Operation; it is my intent to l 2 3 4 5

maintain and imdate it in the future.
Modern agriculture is a cause of environmental problems & needs 1 2 3 4 5
continual, careful management to be environmentally sound.
Even though clean water beneﬁts the public, producers should pay 1 2 3 4 5
for the majority of mandatory environmental practices to ensure
pollution prevention.

Trends in environmental regulation are clear enough to justify 1 2 3 4 5
changing my environmental practices, even those that require
permanent structure investments.

 

 

 

 

 

 

 

The law requiring “no discharge” of polluted runoff over land or 1 2 3 4 5
via tiles is adequate to counteract agricultural water pollution.

MAEAP educational programs have helped me become a better 1 2 3 4 5
steward.

Liability and law suits are of li_tt_le_: concern for the livestock 1 2 3 4 5
industmin Michigan.

Michigan governmental agencies are doing a good job helping l 2 3 4 5

 

 

 

 

 

 

 

producers reduce pollution without substantially hurting proﬁts.

 

VI. Environmental Effects — Due to changes that have taken place over the past few
years on your farm, we would like to see if there has been some immediate environmental
advantages for your participation in MAEAP.
1. What are the soil changes on your farm since you implemented CNMP? What are your
long-term goals for the farm?

Change Long-term Goal

a. Phosphorus soil level

 

 

b. Heavy metals

 

 

195

0. Water holding capacity

 

 

(1. Percent organic matter

 

 

e. Soil erosion

 

 

2. Is there an increase in wildlife habitat due to the changes you’ve made with the

CNMP? Explain.

 

3. Is your farm limited in the phosphorus it can spread? Yes [:1 No C]

How close is the farm to reaching mass balance (inﬂows = outﬂows)?

 

4. Do you feel the water quality on or near your farm has improved (will improve) do to

the changes you made (will make) by implementing your CNMP?

 

VII. Operator Characteristics - Finally, in this last section we would like to know more
about you, the operator. This information will give me better background information
about your situation and help explain how much technical and ﬁnancial assistance
generally a producer might need. Keep in mind this is strictly conﬁdential and will not be
able to be traced back to your farming operation.

Primary 1’t Partner 2"d Partner 3rd Partner
1. Age as of January 1, 2004

2. Farm operator’s education level:

Less than 12 years Cl C] C] C]
High school graduate D E] E] [3
Training past high school C] [:1 C] [:1
College graduate 1:] D D a
Post-graduate Cl [:1 C] D

3. How many years have you been in agriculture? yrs.

 

196

4. How many years have you worked in this operation? __ yrs.
5. How many years have you managed this operation? __ yrs.
6. How many years has this farm been in the family? __ yrs.
7. What was your family’s income (before taxes) last year?

I: a. Less than $50,000

a b. $50,001 - $100,000

[:1 c. $100,001 - $150,000

[:1 d. $150,001 - $250,000

:1 e. $250,001 — $400,000

E] f. More than $400,000
8. What was your family’s expenses (both on and off the farm) last year?

[:1 a. Less than $50,000

b. $50,001 - $100,000

[:1

D c. $100,001 - $150,000

[:1 (1. $150,001 - $250,000

[:1 e. $250,001 - $400,000

13 f. More than $400,000
9. What percentage of your 2003 family income was from off-farm work %
10. What was the total farm revenue for your farm last year (crOps, livestock, livestock

products and government payments)? $

 

l 1. What percent of this total cash value came from:

a. Animal sales %

b. Milk sales %

197

c. Crop Sales %

(1. Government Payments _%
e. Co-op dividends _%
f. Tourism _%
h. Other specify %

 

TOTAL 100 %

12. What is the total value of all farm liabilities?

C] a. Less than $500,000

[:1 b. $500,000 - $1,000,000

[:1 c. $1,000,001 - $2,000,000

:1 d. $2,000,001 - $5,000,000

D e. $5,000,001 - $7,500,000

[:1 f. $7,500,001 - $10,000,000

[:1 g. More than $10,000,000
13. What is the total value of all farm assets?

C] a. Less than $500,000

[:1 b. $500,000 - $1,000,000

[:1 c. $1,000,001 - $2,000,000

C! (1. $2,000,001 - $5,000,000

1:] e. $5,000,001 - $7,500,000

f. $7,500,001 - $10,000,000

D

a g. More than $10,000,000

14. What are your plans for the farm? Check all that apply

198

E]

1:]

Increase in size

Decrease in size

Maintain size

Diversify

Specialize

Sell, if price is right

Transfer it to the next generation
Transition to niche markets

Other, specify

 

Is there anything else you’d like share with us?

 

199

APPENDIX E: Comprehensive Nutrient Management Plan Components of the Michigan
Agriculture Environmental Assurance Program (MAEAP) (MAEAP Steering Committee,
2000)

200

Comprehensive Nutrient Management Plan Components of the Michigan
Agriculture Environmental Assurance Program (MAEAP)
Approved August 10m 2000
MAEAP Steering Committee Meeting
Introduction

The Michigan Agriculture Environmental Assurance Program is a voluntary
program for agricultural producers enabling them to develop management plans and
implement practices that are protective of the environment while maintaining the
economic viability of their farm operations.

The MAEAP has developed a three-phase approach: 1) education; 2) operation-
speciﬁc action plan development and implementation; and, 3) veriﬁcation of the plan to
obtain certiﬁcation as an environmentally assured farm operation.

The development and implementation of a farm-speciﬁc Comprehensive Nutrient
Management Plan (CNMP) is an integral part of the program. The objectives of a CNMP
include: protecting water quality, obtaining beneﬁcial use from animal manure and
organic by-products of the operation, and minimizing impacts to the environment and
public health from animal feeding operations.

A Comprehensive Nutrient Management Plan (CNMP) describes the production
practices, equipment, and structure(s) that the owner/operator of an agricultural operation
now uses and/or will implement to sustain livestock and/or crop production in a manner
that is both environmentally and ﬁnancially sound. It combines conservation practices
and management activities into a system that addresses animal production operations
from feed inputs through use of animal manure and other organic by-products. The

CNMP is a planning tool as well as a record of decisions in that it details the activities

201

that the landowner/operator implements. The CNMP also assists the producer in
maintaining records to document where manure or organic by-products will be generated,
handled, or applied.

The CNMP, as outlined in this document, is consistent with the Generally
Accepted Agricultural and Management Practices (GAAMPs) developed and adopted
under the Michigan Right to Farm Act, including the GAAMPs for Manure Management
and Utilization, and Site Selection and Odor Controls for New and Expanding Livestock
Production Facilities. In addition, the CNMP conforms to USDA Natural Resources
Conservation Service Technical Guidance for developing CNMPS which includes
meeting NRCS technical standards for structural conservation practices proposed and all
management activities in the CNMP.

CNMP Process Overview

The CNMP concepts are introduced to the landowner/operator through the
education phase of the MAEAP. The data and records needed to complete a CNMP are
presented along with the components and purpose of CNMP. A good plan should help the
landowner/operator see the "big picture" and trends in their operation. It should also
provide a more comprehensive view of the operation that enables better decision-making
and day to day management.

The CNMP is developed in conjunction with the landowner/operator. For small
and straightforward farm operations, the landowner/operator may be able to complete a
CNMP with technical assistance. However, particularly for complex and/or larger
operations, a professional planner can help the landowner/operator understand his/her

site-speciﬁc resource needs and develop a plan.

202

CNMP Components

pages:

9

O

The major components of a CNMP are listed here, and detailed on the following

Overview

Farm Headquarters Map

Animal Outputs

Conservation Practices on Fields Used for Land Application
Land Application Management

Record of CNMP Implementation

Inputs to Animals—Feed Management (where applicable)
Alternative Utilization Activities (where applicable)
Inspection, Operation and Maintenance, Training
Schedule of Implementation

Emergency Action Plan

References

Appendices

Overview

A brief statement describing the farm operation including enterprises, goals, and

long-term plans for resource management is in this section.

Farm Headquarters Map

A site map showing locations of farm buildings, animal housing, manure storage

structures, other sources of manure and wastewater, feed storage, farm house(s) and any

other relevant physical features.

203

Animal Outputs
This section should include information regarding the total animal units, amount
of manure produced, approximate nutrient levels of the manure (i.e., the amount of
nitrogen, phosphorus, and potassium). The method the operator will use on the operation
to collect, store, treat, and transfer or spread the manure produced on the operation should
also be detailed in this section.
Production
9 Identify species, weight, production level, etc. of livestock (herd/ﬂock inventory)
0 Identify the total amount, location and characteristics of manure, wastewater and
other organic by-products generated, including method(s) of calculation:
— Manure and wastewater nutrient content and volume
— Milk house and parlor wastewater
— Water from plate coolers/supplemental cooling
— Runoff from feedlot/barnyard, stored manure, or stored feed areas
— Silage leachate
— Spoiled feed
0 Identify water control devices (e.g., diversions, roof gutters, etc.) to reduce
amount of polluted water
0 Identify the management of animal mortality (i.e., compost, render, burial, etc.)
0 Identify the management of animal veterinary wastes
Collection
6 Manure and waste water collection method(s)

0 Location of collection points at facility

204

0 Schedule of collection
0 Equipment and/or structural facilities needed
Storage
9 Type, location and size (dimensions) of storage facility(s)
0 Storage capacity:
— Volume
— Duration of storage time based on waste production
0 Assess volume and site suitability for storage (existing and planned)
9 Means to measure freeboard, where applicable, and ﬁll rate
Treatment (where applicable)
0 Type, function, capacity and location of any treatment facility or equipment
Transfer
9 Method, frequency/schedule and structures or equipment needed for movement of
manure and wastewater from or between collection, storage, treatment and
utilization locations.
Conservation Practices on Fields Used for Manure Application
This section should evaluate each ﬁeld to determine the erosion potential
(RUSLE(2) score), sensitive areas, conservation/management practices, and winter
application (MARI score). Maps should indicate the above mentioned areas or practices
within each ﬁeld operated.
0 Evaluation of potential for nitrogen or phosphorus transport off-site (i.e., to
surface and/or ground water) includes such factors as:

— Soil

205

' Soil Hydrologic Group
' Soil Management Group
' Percent Slope
' Topography
' Soil Test P. Value (Bray P 1 in lbs/ac)
' Nitrogen Leaching Index for Soil Hydrologic Group
— Water Quality
' Concentrated Water Flow or Surface Inlet
' Tile drainage system
' Setbacks from Surface Water
— Surface Cover
' Residue Cover/Cover Crops
. Vegetative Buffer Width
— Manure
' Manure P. Application
' Manure N. Application

' Manure application method(s)

Identiﬁcation of sensitive areas such as sinkholes, streams, water bodies, wells,

gullies/swales, surface inlets, drinking water sources and property boundaries

Identiﬁcation of conservation and management practices needed for erosion

control and water management in order to control offsite transport of nitrogen and

phosphorus

Identiﬁcation, by ﬁeld, if winter application of manure is acceptable

206

0 Develop maps showing sensitive areas, setbacks and locations of
practices/activities
Land Application Management
This section outlines the nutrients available on cropland, crop rotation, equipment
calibrations, and on which ﬁelds, at what rates, and via which method manure will be
spread.
0 Nutrient budget for nitrogen, phosphorus, and potassium from all sources (include
form, source, amount, timing and method of application)
9 Calibration of application equipment
9 Application schedule (planned dates of application — i.e., month)
9 Determine application rates, by ﬁelds, based on:
— Crops to be grown
— Realistic crop yield goals
— Crop nutrient needs
— Soil test results (within last three years)
— Previous crops grown, including residual nutrient credits
— Manure and wastewater nutrient content
— Nitrogen or phosphorus limiting nutrient
—- Winter spreading requires special provisions to control runoff and erosion
0 At time of application, consider ﬁeld-speciﬁc conditions (wet, dry, frozen, etc.)

and adjust application rate, accordingly.

207

Record of CNMP Implementation
A record of the animal outputs, conservation practices, and land application
management practices that were in fact observed should be kept in this section.
9 Records to be kept by ﬁeld:
— Soil test reports
— Date(s) of manure/wastewater applications(s)
-— Source and rate of manure/wastewater applied
— Date and rate(s) of other nutrients applied
— Date(s) of incorporation (where applicable)
— Method of application (e. g., surface applied, injected, irrigated)
— Acres and area of ﬁeld applied
-— Weather conditions during application of manure
— Field conditions during application of manure (wet, dry, frozen, etc.)
- Recommended nutrient application rates
— Previous crops grown and yields
— Plant tissue sampling and testing reports (where applicable)
— Pre-Sidedress Nitrate Test (PSNT) reports (where applicable)
0 Other records:
— Manure/wastewater quantities produced and nutrient analysis results
— Inspection and maintenance records
— Records of rental agreements or other agreements for application of

manure/wastewater on land not owned by the producer

208

— Record of manure/wastewater sold or given away to other landowners
(where applicable)
Inputs to Animals - Feed Management (where applicable)
This section should outline any change or future plan to change the feed ratio.
0 The management of animal diets that results in:
— optimum production and/or animal body maintenance
-— best economical use of feed materials
— minimize the amount of (recoverable) nutrients contained in manure
Alternative Utilization Activities (where applicable)
This section explains where manure was transported or for what it was used, if all
manure was not spread on the operated acres.
0 Transport and environmentally sound off-site utilization
9 Power generation (e. g., methane production, combustion for energy)
0 Conversion to value-added products (e. g., compost)
Inspections, Operation & Maintenance, Training
A plan to inspect or review practices and equipment and how the operator will
train their employees to follow the CNMP is in this section.
6 Schedule for inspection of structural and vegetative practices and equipment
0 Operation and maintenance practices/activities
0 Schedule for review of management practices/activities to ensure implementation
of plan
6 Plan for training employees how to follow CNMP, including when training will

be provided, such as:

209

— New employees hired
— New processes, procedures or equipment
— Employee responsibilities
Schedule of Implementation
A plan to implement any new components and when the entire CNMP will be
reviewed and updated in this section.
6 New components that are planned and the implementation schedule for each new
component
6 Annual review and update of plan, as necessary
Emergency Action Plan
A plan to be implemented should manure or other wastes from the operation leak,
overﬂow, or run off the site.
9 Actions to take in the event of a spill, discharge or failure of a collection, storage,
treatment of transfer component.
0 Telephone numbers to report and seek assistance in the event of an emergency
9 Anticipated ﬂow paths in the event 0 f a spill, discharge or failure. Show on a site
map.
References
This section includes sources of information that were cited in the plan.
Appendices
Copies of documents cited in the plan or additional material that adds to the
explanation of the plan.

0 Copies of pertinent references cited in the plan

210

0 Environmental documentation, as appropriate

9 Other appropriate supporting documents not included in other parts of the plan

(i.e., worksheets, forms, etc.)

211

APPENDIX F: Phosphorus Index (Michigan Trial)

212

The Michigan phosphorus index (P-Index) used in this study is still being ﬁeld
tested prior to it being adopted by any governmental agency, university, or MAEAP. A
separate matrix, like the one below, is completed for each ﬁeld to be scored with the P-
Index. A score above 18 signiﬁes that the ﬁeld has a high potential risk of phosphorus
runoff entering surface water. The total P-lndex score is the sum of the transport and
source scores.

The transport score consists of the RUSLE2, RCN, distance to surface water,
subsurface drainage, and buffer score. This score can range from zero to 36. The most
accurate method to determine the distance to surface water, subsurface drainage, and
buffers is to examine the ﬁeld in person. Maps can be used, but often the aerial
photographs are out-of-date and do not portray the entire picture as an on-site view can.
The RUSLE2 and RCN scores are calculated based on information from the operator and
ﬁeld soil data. Altering the crop rotation can affect both of these numbers.

The source score consists of the soil test P, P fertilizer method, manure method,
and P205 rate from all sources. This score can range from zero to 32. A scientiﬁc soil
test determines the soil test P, while the producer controls the other three variables with
his/her management practices chosen for each ﬁeld.

Each variable is given a score based upon which text box it most closely follows.
For example, if a ﬁeld had a RUSLE2 score of 5.8 then that ﬁeld would receive four
points for the transport score of RUSLE2. If an operator surface applied commercial
fertilizer two days before planting but never incorporated the fertilizer, then the source
score for P fertilizer method would be eight. After all variable scores are determined,

they are totaled for the ﬁeld’s P-lndex score.

213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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