The information below has been supplied by dairy marketers and other industry organizations. It has not been edited, verified or endorsed by Hoard’s Dairyman.
Dairy producers have many duties to carry out in their dairy operations, one of which is storing, handling and applying manure. Manure handling can be a significant cost on most dairies even when considering the value of the nutrients in the manure. Seldom do producers consider their costs of handling and applying manure on a per hundredweight (cwt) of milk sold basis like they do with many of their other costs.
In Iowa, the annual grain production requires replenishment of the fertility of the soil. Deep soils and high yields are a perfect solution for recovering value from manure. Technologies for better application and more efﬁcient handling are applied throughout Iowa. Dairy manure values, according to Iowa State University specialists, are such that a corn producer can easily have more than enough fertility brought onto his farm to fully fertilize the following year’s crop and more.
Stewardship of the land and water are goals common to all Iowans. All around Iowa are established wetlands, buffer strips in riparian areas and other efforts intended to manage water quality. The guidance applied by Iowa regulatory agencies has been developed and strengthened with strong, continuous involvement from state commodity organizations and general farm organizations working collaboratively for the best outcomes.
There is now strong understanding, and in many cases scientific consensus, about how varying manure systems may offer different environmental benefits and financial impacts across dairy farm systems and climates. The potential to produce renewable natural gas (RNG) from dairy manure can offset manure handling costs especially with the value of manure-derived RNG as high as $80/dekatherm in current markets. Several companies are promoting digesters in dairy dense areas including Iowa-based EcoEngineers.
At the recent Dairy Discussions program hosted by the Iowa State University Extension and Outreach Dairy Team in partnership with Eco Engineers, featured speakers Shelly Peterson, Dr. Kris Kohl and Brad Pleima focused on manure management systems, opportunities in renewable natural gas (RNG) to maximize profitability in the dairy industry, and the benefits of co-locating a dairy and biofuel facility in the Midwest.
Shelly Peterson, P.E., is a program manager with the state energy office, housed at the Iowa Economic Development Authority. The energy team supports many emerging energy opportunities in the State of Iowa, including RNG. Peterson discussed how the Iowa Economic Development Authority can support Iowa dairies adapting digester technology.
Peterson outlined the on-farm potential for Renewable natural gas (RNG) from biomass resources including manure, cover crops, food waste and landfills. In addition to on-farm systems producing energy revenue, she pointed out water quality benefits, odor control and soil health benefits.
Peterson stressed that the on-farm potential for RNG really centers on swine and dairy facilities in Northwest Iowa that can combine for economies of scale and are located near natural gas pipelines. She cited the new environmental stewardship goals from the Innovation Center for U.S. Dairy in Wisconsin.
The goals to be achieved by 2050 focus on:
- Becoming carbon-neutral or better
- Optimizing water use while maximizing recycling
- Improving water quality by enhancing use of manure and nutrients
Dr. Kris Kohl was the next presenter. Kohl has been the Iowa State University Extension and Outreach Agricultural Engineer in Northwest Iowa for the past 32 years. His expertise includes manure handling and management plans, composting and ag building ventilation.
Dr. Kohl started his presentation noting a major problem with dairy manure is that it is too thick to pump and too thin to scoop, plus cows produce 12 to 20 gallons of it every day. At ten percent solids, it has a high cost of handling, storing and land applying plus the fertilizer value will not normally cover the cost.
Kohl shared that there are also “hidden hazards,” one of which is sand. It is the gold standard bedding in free-stall barns and wears hard on steel and moving parts in the manure system. Another issue centers on our high use of distillers grains that promote higher levels of hydrogen sulfide and sulfuric acid that can be deadly and is also corrosive to the manure system and handling equipment.
Kohl also reviewed maintenance on pumps including greaseable bearings, screens, parts and parts availability. He noted that impeller pumps must have non-clog type impellers and large inlets and outlets to reduce blockages. Piston pumps have high pressures and low flow rate and can transfer very high solid content manure.
Kohl gave four keys to effective effluent pumping:
- Know what you are pumping
- Know how much you are needing to pump
- Select the right pump for the job
- Install pump and related parts correctly
The final presenter was Brad Pleima, P.E., a Senior Engineer and Senior Regulatory Consultant at EcoEngineers with over 17 years of consulting and engineering design experience in water, wastewater, and renewable energy project work. Pleima leads the Asset Development Consulting services at EcoEngineers, and he discussed opportunities for dairymen with digesters producing renewable natural gas (RNG).
Pleima notes that there are currently 15 or 16 dairy RNG operations in the United States. From the digester, there are three uses for the biogas - power, heat production or renewable natural gas to be sold into the gas grid or as transportation fuel.
He outlined the opportunities for producers:
- Divert manure from lagoons to new anaerobic digestion system
- Generate biogas, upgrade to RNG, and inject into nearby natural gas pipeline
- Sell RNG volumes into California as CNG or LNG and generate RINs and LCFS credits
- Use revenues to pay off project and supplement dairy incomes
- Works best with more than 2,000 head of milking cow equivalents.
- Third-party developers and finance can build with no capital involvement from the dairy farm.
When considering the value of the gas in dekatherms is currently $2.50 to $3. With the value of RINs and LCFS credits, the value is near $78.
From the example used during the presentation of a dairy milking 3,000 cows with a lagoon-based manure system, the capital cost would be 10-12 million with an annual operating cost between $750, 000 and one million dollars. Gross revenues would be $4 million annually and EBITDA nearly $2.5 million annually. This all assumes the current programs and prices remain in place.
From the retrospective survey of the webinar, we found that 50 percent of the participants were from industry and nearly 14 percent were from government or academia. The remainder of responses were from investors or potential investors, plant managers and self-identified environmentalists.
Eighty five percent of those responding were completely or mostly satisfied with the program.
Take-home messages included:
- Lucrative opportunity for larger farms under the right conditions. Smaller farms, and larger farms far from a pipeline, may not be able to take advantage of LCFS.
- Utilization of animal waste should be viewed as a potential resource, but it needs to be integrated with the rest of the farm business. You need to contact an appropriate professional in order to realize an efficient system and the maximum value potential of your resource.
- RNG is not a silver bullet to the nutrient management challenges in Iowa.
- As someone who is mostly interested in policy information, it was interesting to find out about the Carbon Sequestration Task Force being formed in Iowa.
- There's opportunity to get more from our land and livestock and improve air and water quality at the same time.
The presentations and questions were recorded and are available at https://www.extension.iastate.edu/dairyteam/webinars.
For more information and clarification on the data presented, contact: Shelly Peterson, P.E., Iowa Economic Development Authority, firstname.lastname@example.org; Kris Kohl, Ph.D., Iowa State University Extension and Outreach, email@example.com; or Brad Pleima, P.E., EcoEngineers, firstname.lastname@example.org.