Financial costs and economic tradeoffs of alternative manure management policies on dairy and dairy/poultry farms in Rockingham County, Virginia

This study examines farm-level financial costs and environmental benefits from three alternative manure management policies, incorporating all manure (INCORP), limit nitrogen applications to agronomic recommendations (NLIMIT), and phosphorus applications limited to crop removals (PLIMIT), on representative 60, 100, and 150-cow dairy and dairy/poultry farms. Current nutrient applications are manure-based, with each farm substituting poultry litter for commercial fertilizer. Potential field-level nutrient losses estimated by EPIC, a soil/plant growth simulation model, indicate the highest nitrogen losses on grass hay and pasture and the highest phosphorus losses on no-till com. The highest nutrient applications and nutrient losses occur on the 60 and 100-cow dairy/poultry farms. INCORP is ineffective at significantly lowering nutrient losses. NLIMIT reduces nitrogen losses by 30% and phosphorus losses by 6%. PLIMIT is the most effective policy, lowering both nitrogen and phosphorus losses over 34%. The largest farm-level reduction in nutrient losses is on the 60-cow dairy/poultry farm. Ryelage was the only crop yield that varies under the alternative policies. Financial simulation with FLIPSIM indicates that INCORP and NLIMIT do not affect farm financial performance. PLIMIT reduces farm net cash income and ending net worth as farms substitute commercial fertilizer for poultry litter. PLIMIT does not cause dairy farms to go out of business but does significantly reduce their cash available for family living expenses below minimum requirements. Dairy/poultry farms maintain adequate cash incomes under PLIMIT. PLIMIT lowers net cash income on all county dairy and dairy/poultry farms by 8% to 16% under litter disposal costs of $10 to $40 per ton. The smaller land-intensive 60-cow dairy/poultry farm has the largest decrease in cash income while the smallest decrease is on the 150-cow dairy/poultry farm. The 100 and 150-cow dairy/poultry farms maintain higher ending net worth than corresponding size dairy farms at disposal costs of $40 per ton. County net cash farm income declines by $2.57 to $5.16 per pound of reduced nitrogen losses and $15.68 to $31.44 per pound of reduced phosphorus losses. The study indicates that NLIMIT reduces nitrogen losses without affecting farm incomes whereas reducing both nitrogen and phosphorus losses under PLIMIT substantially reduces farm income. Nutrient management plans need to be directed at smaller land-intensive farms to achieve substantial nutrient loss reductions.