Spreading Success: Inside Iowa's Manure Industry

Dan Andersen and Tony Mensing dive deep into the Iowa commercial manure application industry, uncovering fascinating insights from a 2024 survey. They explore the key concerns facing the industry, including the high costs of equipment, labor challenges, and application capacity issues, and highlight the role of seasonal employees in ensuring smooth operations.

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Dan Andersen: 0:00

Music. Hello, and welcome to Talkin' Crap, a podcast by Iowa State University Extension and Outreach. This institution is an equal opportunity provider for the full non discrimination statement or accommodation inquiries, go to www.extension.iastate.edu/diversity/ext. In this podcast, we discuss insights into the science technology and best practices surrounding manure management. Our objectives are to build awareness about the challenges farmers and the broader agricultural industry face around manure and to demonstrate solutions in areas of innovation. Hello and welcome back to another episode of Talkin' Crap. In this month's episode, we are going to be talking about Iowa's commercial manure application industry, and I have Tony Mensing to help me out. So Tony, could you tell us a little bit about yourself?

Tony Mensing: 1:00

Sure. Thanks for having me, Dan. My name is Tony Mensing, I'm the field ag engineer with Iowa State University Extension and Outreach based in southwest Iowa. So part of your team and do all things extension ag engineering related, and part of that is commercial manure application,

Dan Andersen: 1:18

Perfect. So Tony has been a great asset to her team. Great to have him on the podcast. And this really results from a survey we did this past spring, of all commercial manure application businesses in Iowa. We currently have about 562 different business entities in Iowa who put manure on and that has a wide range of meanings, anywhere from I'm one guy with a tank applying my manure, and maybe my neighbor's manure, all the way up to in one case, we saw a company that had 310 employees, many of them seasonal, with 310 employees. So a wide range, but they take that commercial manure applicator certification and try and be in the business of making at least a little money from putting other people's manure on. So I think the way we're going to run this is Tony's going to help me out and host and ask some questions, and I'm going to hopefully have been studied up on what we found from the survey results and try and work through that. So that's the plan today, and I'll give it a minute for Tony to get us rolling.

Tony Mensing: 2:14

Yeah, I'm excited to be here and get a chance to pick your brain a little bit about what you learned about commercial manure application in Iowa and what you found out from the from the applicators that you surveyed and got some results back from So you touched on it a little bit, but do you have any more overview of the industry as a whole that you want to share based on the survey?

Dan Andersen: 2:34

Yeah, I think 562 commercial manure applicators every year, in commercial manure applicator certification, we train about 2000 people. So that was sort of what we were hoping to find, is when we think about, what's the size of the industry, well, we certify about 2000 people. So we're hoping that we think there's 2000 people in the industry, and then, you know, they're a varied industry. And I think some of the questions that I phrased, I got answers that I loved, and I'm like, Man, I was good writing the question that day about what I wanted to know, and a few of the other ones I wish I would have known now what I knew then, but I think that's the way it's supposed to work.

Tony Mensing: 3:08

Sure, with with such a vast array of business types and setups and exactly what they're trying to accomplish, it's hard to have a one size fits all survey for that industry, I'm sure. So kind of to that note was, was there something that surprised you the most in the results you got back?

Dan Andersen: 3:28

I think how thoughtful they were. I always say the commercial manure applicators are extremely smart. They know what they're doing. They understand their business really well, and we're trying to add value to that. But anytime you ask someone to do something different, especially something that I offered no incentive for them to do, it's always great to get really thoughtful responses. And I think a lot of people are really curious about, what's the price of manure going and we'll talk about that. And I expected to get good responses there, but we asked a wide range of things like, what are your concerns in the industry? How much manure can you apply on average per day? What equipment are you using? What do you think the future might demand? And there was people who left comments in addition to just here's the numeric response, and that makes my life a lot easier and a lot more exciting to think through sort of what they had going on. One of the things I recognized that I failed to do as well as I wish I would have is you pointed out there's a large variety, and especially in solid manure. That could mean I'm the guy applying manure and I care about that application rate, or I'm a guy who's hauling from facility to field and stockpiling it in the field. And I now recognize I should have asked better questions about that, and thankfully, some of those individuals who responded were kind enough to point out, like, I actually don't apply any manure, I'm just moving it around. So I think that's really helpful. The other thing I wanted to say is I was reasonably pleasantly surprised with our response rate. Only 90 or so applicators actually responded to the 562 businesses, but I put it out in spring, right before application season was going to start, by about a month, so they could have been getting busy with prep. And I wish I would have done a better job of that, but I think we actually got a pretty representative response. Of those businesses, we saw that about two thirds handle exclusively liquid manure, about 20, 25% of them handle exclusively solid manure. And then I was surprised to learn that there are companies that do both. I mean, I knew a couple of companies were probably out there, yeah, but it seems like a lot of work right to do both, kind of at the same time, different style of equipment for both, and that's a fair amount of effort, right?

Tony Mensing: 5:24

And pretty potentially some vastly different customers, right? From a commercial applicator standpoint, those are two different realms, I think so that surprises me, also, that there would be that much overlap, yeah,

Dan Andersen: 5:39

and I think there's, there's some places where you can say, I'm on a swine farm, especially gestation farrowing, I have mostly this liquid manure, and then I have some mortality after birth compost that I generate, and I can see how it's value adding for a company, maybe to be able to handle both. But, man, I didn't think about that before I started seeing the responses. Or at a dairy farm, where we might have mostly liquid manure, some sludges, maybe some bedded pack from young stock, if we still keep the young stock on the farm. And that was just not an area that I thought they really are doing both as much as I saw. And you can say, well, it's only 10% of the industry, a little bit more than 10% of the industry, 560 companies. That's still a good

Tony Mensing: 6:15

Pretty significant.

Dan Andersen: 6:15

Yeah.

Tony Mensing: 6:16

Yeah, yeah. I agree that's and that's why it was great that you did the survey. So yeah, I think that there will be industry stakeholders interested in learning what you found out from the survey. So it's fun to get some insight on some of those things that maybe aren't quite what you would have expected, but may make sense when you kind of work through the details there. So I guess, yeah, you shared some of the breakdown on liquid, roughly two thirds handled liquid alone, maybe talk me through what the different transportation methods are for the commercial applicators that are doing liquid application.

Dan Andersen: 6:55

Yeah, so I think on the liquid side, we normally think, are you a tank company? Are you an umbilical company? Or you one of those other people who, for some reason, are invested in both, right? And I think that was one of the things I was interested to find out. I often get questions, do you see more of manure getting applied with hoses than we used to? Or are we moving away from tanks? And generally, I can say things like yes, but I don't have much data to support it, other than personal conversations with people. So of those liquid companies that responded, we saw about 70% of them are still using tank wagons exclusively. 20% or so were exclusively on umbilical systems. And then about 10% again, were invested in both. And I think that one I can understand a little bit more we could have started with some tank wagons had been invested and all of a sudden, said we got the right customer, have enough customers that we feel like a dragline is the next step in our progression, or the fact that 70% of Iowa's liquid manure is still handled by tanks. Oftentimes, when we have swine finishing manure, especially with low rates, if we're using umbilical system, we can make them fit, but it's sometimes small fields in northeast Iowa, doesn't make sense. Some of those low application rates, where it's set up and move a lot doesn't make as much sense. So that part didn't surprise me, but it was interesting to see how much tanks have held on to the industry, especially, you know, in a state like Iowa, as compared to maybe Wisconsin, where we see more of that umbilical system taking on.

Tony Mensing: 8:14

Sure, yeah, I don't know if you asked this question this survey, but what's your what's your best guess on the umbilical companies that would have what fraction of them do you think would have started just as an umbilical company, versus started with a tank and have transitioned?

Dan Andersen: 8:32

That's a great question, and unfortunately, I didn't ask it. But I think for the most part, given where we're at, probably half of the umbilical companies started as a tank company at some point, and found that they had got to a business where they were moving up. Certainly some of the newer companies that own only an umbilical said, I can find this one farm that's going to be my driver farm for supporting the umbilical, maybe a big dairy, maybe a gestation farrowing facility. But a lot of it was saying, I have this piece of equipment my own tank. I'm going to make a business of it and then working their way up to that. So I think that's a great question. I can say that when we surveyed in 2012, which was 2014, which was the last time I did this survey, we had fewer people using tanks than our umbilical systems than we do now. So we've seen some of that progression, but I didn't quite phrase it that way. I think one of the other interesting things that we started to try and understand is what does a company look like, right? And I was really curious about, how many gallons does a company do or what does it take to be a viable company? And we sort of started asking that in different ways, like overall for liquid, we can say things like the liquid manure industry in Iowa, just the survey respondents that I got did about 2.75 billion gallons of manure. And I know that's just a number, but there's 18.5 billion gallons or so of liquid manure in Iowa. So even though I didn't capture a huge percentage, about 15, 16% of the industry, all of a sudden you can start saying things like, I captured a third of the liquid manure just in this survey, right? And and we start thinking about. If that means that I got a representative sample. Well, the manure industry in Iowa is probably 60-65% applied by commercial manure applicators. And I think that's extremely useful for me to know. 10 years ago, when we did this, it was about 50/50, 50% commercial applicators, 50% confinement site people applying their own manure. And that's not a surprise, but it's nice to have a quantifiable number for how the industry is progressing.

Tony Mensing: 10:24

Sure, yeah, it makes sense that that's the direction things seem to be going. But to actually be able to put a number to support the change that's happening is is interesting fact for me to learn.

Dan Andersen: 10:36

Yeah, and I think that's something that people want to know from me. I get that question all the time, like, how much manure is put on by commercial applicators? And I've always put my finger up to the wind and said, based on the pulse on I'm somewhere above 50, and I didn't quite have us up to as high as I think we are now, but we knew it was growing. It's just a question of how much it's growing. It's nice to get to some data behind that. I want to talk a little bit about the size of companies. One of the things that we saw is, certainly, when you think about a tank, how far can I drive, how many loads can I get done in a year? There's a limit, and the expansion method on that is, well, get a second tank, get a second employee. And you knew that for a while, and then you're like, Man, this is maybe not the job I want to be in of managing people. I liked it when I was the guy doing things. But when we look at tank companies in Iowa, the sample that we got said they were doing anywhere between half a million gallons a year and 72 million gallons a year for exclusively tank companies, and the average guy was moving about 10 million gallons. So if we think about the average swine finishing barn site four barn site probably is a little under 2 million gallons a year. But give or take, they're doing about five swine finishing sites to be a business, right? And that seems pretty reasonable. You can keep five customers moderately happy with you all the time and and have a viable business to move around. But the guy's doing 72 million that's that's all of a sudden, working pretty hard and getting a lot of days, and I think moving manure around.

Tony Mensing: 11:52

There's, yeah, quite a variety there. And yeah, given, given the circumstances that we have to work around in the state, I can see where there could be anywhere from either of those extremes to the average that you gave, but there's a lot of difference in how much is actually being handled.

Dan Andersen: 12:09

That's right. And I think we knew some of this from the surveys we do for our commercial manure applicators and what they respond about, sort of the variation. But when you think about there's a company that does half a million gallons a year. There's a company with tanks that does 72 million gallons a year. They're all the same, right? They're all tank companies. But, man, that's a variation of how do you talk to each one of them wants to know about me and my business and how this applies to me. And that's before we get to the solid manure or the umbilical companies, where the average guy was putting a average company was putting on 72 million gallons. And we saw some of those get up to 400 million gallons a year.

Tony Mensing: 12:43

Sure. Yeah. And that variety over that that application method is similar to how different the tank applicators were, but is interesting in how it's different between umbilical systems and tank systems.

Dan Andersen: 12:58

That's right, we see a nice scaling that got bigger, but the variation, again, is still extremely big. And then that third one, where I own a little bit of both, essentially the same thing. The companies got bigger. They average about 100 million gallons per company, if you're trying to be both a tank and umbilical hose company. But the range, again, was just huge. We saw those companies handling all the way down to 7.5 million with both tanks and an umbilical system all the way up to 750 million gallons, right? So just a huge range of about a factor of 10 in all these from our smallest company in that that category, all the way up to our biggest category. And we want to say, You all look the same to us and and they don't, right? They're very unique in individual businesses.

Tony Mensing: 13:37

They're doing the same kind of work, but, yeah, the way they operate their business can be vastly different. Sure. We talked a little bit about about liquid application, solid newer application is a smaller chunk of the industry in the state, but it's still significant. Do you want to describe a little bit about the significance of solid manure application?

Dan Andersen: 14:00

Yeah. And I think one of the things that was interesting to me in the survey is really how similar results we got for both solid and liquid manure. And what I mean by that is, when you start saying, how much solid manure do we have in this state, how much are they getting done, right? I think of the people we surveyed, we got somewhere in that neighborhood of 4 million tons a year of solid manure being handled by commercial applicators. And that works out to about 60% of all the solid manure in the state, right? And we said, for the liquid side, we're in that 60-65% all of a sudden, I was, I was surprised to say they're both handling the same fraction of the manure available to us. That's that's sort of interesting to me. It makes some sense when you start thinking about maybe what price structures are. And a little bit later, we'll start talking about, how many application days do we need to get the job done right? Based on what they can get done in a day. How much manure is produced in the state? How many working days do we need? And interesting, both of them took about 60 to 65 working days. Really similar, and in some ways that makes lots of sense, right? We're trying. Had to respond to the same pressures, the same application season in the fall, same application season in the spring. It makes sense that the markets are going to respond similarly. Probably occupy about similar fractions. But I hadn't thought that when I see survey results that look pretty similar in terms of, how do we respond to meeting what the industry needs in Iowa, so that that surprised me, and then when you think about it, you're like, I guess it makes sense that where, that's where the pressure should direct everyone roughly to the same we all have to have the same number of days to get the work done. But it wasn't what I necessarily anticipated. And I think the other thing I'd point out on solid manure is we still, again, see a lot of variation, right? And that makes sense. You could be a company that's hauling for a couple poultry farms, or a really large poultry farm, where you could be a guy who says, My neighbors have beef cattle, I have beef cattle, and I'm doing him and me right?

Tony Mensing: 15:47

Right.

Dan Andersen: 15:47

Yeah, and, and we don't necessarily think about the industry being that way of I'm a guy doing two sites, and I'm a guy doing one site that's just massive, right?

Tony Mensing: 15:56

Right. Yeah, yeah. We look at them and, and both of those extremes are commercial applicators in the business of applying for someone else, but it can be such a wide variety in what they're actually trying to accomplish, and what that may mean to their application business itself, right? So,

Dan Andersen: 16:15

And especially, I look at some of the social media groups that support some of these commercial applicators, and you see the questions on there that represent that some of the guys are very strategic. They think about it as a big business. They know the price of moving manure around for them exactly. And other people are out there saying, What's a rough going rate on this? I don't normally put on manure for other people, but my neighbor asked me to.

Tony Mensing: 16:37

Sure, yeah. And I guess kind of to fit into that piece of how vastly different they can be. We're all working within somewhat the same constraints. Talk a little bit about how much time is available to get the work done in the state.

Dan Andersen: 16:57

Yeah, that's a great question, and it really it varies a lot, right? But we've had some blessings the last few falls with really dry falls, I would say every day in the fall is a working day. Probably at some point we won't get that advantage again. But just thinking about this last spring in 2024, I would say we had three working days that seemed fair,

Tony Mensing: 17:17

Not very many, yes.

Dan Andersen: 17:18

So, but the fall has been pretty generous to us. I mean, we start when corn silage starts coming out. I know ISU myself included, will push, wait till 50 degrees and cooling, and then when I see it take 60-65, working days, I understand the pressure.

Tony Mensing: 17:32

It's hard to not feel that pressure of not knowing for sure what you're going to get for weather tomorrow or next week or the week after that, but yeah, certainly to your point, there are lots of good reasons to want to wait until we get some cooler soil temperatures.

Dan Andersen: 17:48

That's right, and it's important for us to try and wait. But when I read some of the responses to what are your biggest concerns, the commercial applicators were really frank and direct about one of their concerns is their clients need us to get manure on that's the price of doing business. How do I make sure I get to everyone I need to everyone on the list that's counting on me at the end of the day to take care of this for them. And I think recognizing that pressure is important. And if we want to have people wait, how do we help this industry grow? How do we support them in doing that?

Tony Mensing: 18:17

Right? Yes, there are lots of factors involved in making those decisions for sure. So one of those has probably a lot to do with the employees of those businesses. Tell me a little bit about what you learned about the employment landscape from your survey.

Dan Andersen: 18:35

Yeah. Great question to ask. So we asked it in a couple ways, how many permanent employees do you have? How many seasonal employees do you have? And then tried to figure out what that means. And I told you, every year we certify about 2000 commercial applicator employees. So if my survey is any good, hopefully we got that many right. And luckily, when you look at sort of what the average was with 562 businesses, we came out at that there should be 2050 people that are that these businesses said that they would be employing. Man, that's pretty close to how many we train. And I know right, like we worry about this is everyone coming to training, and the numbers work out pretty close, and everyone's happy. I think it varied a lot. And I think some people had no permanent employees on their pay structure. Doesn't doesn't surprise me. The largest one, I think we had 10 permanent employees on our pay structure. And it comes back to that there's a huge variation in the industry of how to get this job done. But one thing that was really clear throughout was we are really reliant on seasonal employees. No surprise, we have one, maybe one and a half big windows when we're really doing this work, and we can't afford to keep everyone on the payroll all the time. But it does point to that that's a worry about the infrastructure, and how do we make sure we keep doing this? And when we asked, What are your biggest concerns moving forward? Number one was equipment costs. I wasn't too surprised about that. We've seen a lot of increases in equipment prices. We've seen a lot more sophistication on that those pieces of equipment that are driving that price up. But right there with it was labor concerns. Right? And when you think it takes 2000 people to do this, you can say that doesn't sound like that many. But here in Ames, we have the research park. It employs about 2000 people,

Tony Mensing: 20:10

Sure.

Dan Andersen: 20:11

Yeah, so.

Tony Mensing: 20:12

a significant number of folks involved in that industry, right?

Dan Andersen: 20:16

Yeah. And it's, it's actually a large amount of the workforce in a single, unified thing. If it was one company doing this, it'd be in the top 50 workforces in Iowa, right? And that surprises me a little bit.

Tony Mensing: 20:27

That's impressive.

Dan Andersen: 20:28

Yeah, it's not a single company, so there are a lot of small companies. But to be that coordinated and work through that, I think, is an interesting factor. And to think, how do we get all those people seasonally available at the right time, when maybe they have to help with harvest, so we can't. We're competing with other things where seasonal demands are sort of peaking at the same time.

Tony Mensing: 20:45

Right? Are, what did you say 60 some days to apply? Is a busy 60 days? Because there are a lot of other things that are trying to happen in the state that same time.

Dan Andersen: 20:57

Yeah. So we're competing with this labor source, right? And how do we how do we position ourselves for long term success with that? And I think the commercial businesses are worried about the same thing. How do we make sure we have employees? We recognize this is important part of Iowa agriculture. How do we satisfy this need, this demand? The other thing I want to point out is, while every company was a little different, on average, they all had a roughly two permanent employees, two part time employees. There was just huge variation based on the size of the company, of how we got there, but on average, we were looking, you know, roughly at that a couple employees, a handful of employees, to keep the business running.

Tony Mensing: 21:34

Sure, kind of the same ratio of part time, seasonal employees to full time, yeah.

Dan Andersen: 21:43

On average, for a small company now, as we got bigger, that often wasn't the case. The ratio got much more seasonal. But on average, given the size of the majority of the companies, they sort of looked at it as a half and half

Tony Mensing: 21:52

Sure, sure. Okay, so kind of on that on the employee side of things, then, so what kind of metrics might companies use, or might you use, as you're looking at the industry to to kind of categorize or look at what amount of work are we doing with those employees? Sure, yeah, it's maybe not necessarily what I

Dan Andersen: 22:18

Yeah, and I don't know necessarily how an industry would look at it, but I think we tried to look at it in terms of either gallons per employee or tons of manure per employee that you need to get done in an application season, right? And I wanted, I thought that's a way to normalize it, a way to understand how much I'm getting out of each person. And one would have thought right at the onset, but makes sense that thing that really surprised me was basically companies scaled by getting more out of each employee. If you were a bigger company, I had to get more tons of solid manure out of you, right? So sure, a better utilization of that equipment as companies got bigger, which probably makes some sense. you're gonna grow not just by the same amount of work per employee, but become more efficient in in the amount of manure that you're handling per unit of workforce. Yeah, it wasn't what I thought to start with, either. I was like, especially for solid manures where it's trucking, it has to grow just by hiring another employee, hiring another employee, and in some ways it does. But I think what we see there is maybe the industry changing from I'm handling my farm, a neighbor's farm, another neighbor's farm, to I need to figure out how to cash flow. This is a real business where it's my at least some of us are employed full time, just on this manure application business to make it go, keeping those relationships functioning. So I think that was interesting to me to think about, how do you go from I'm doing this as a part time gig, getting better utilization of my equipment that I already have to farm, to I need to do this as a living and make sure that myself and my employees are taken care of, and we have to push through more tons of manure, more gallons per employee to make that happen, oftentimes, and it's a struggle, and I think that comes through. And some of the numbers they got to per employee, yes, we got big surprise me, right? Like, if I told you, you got to get through 10,000 tons of solid manure as an employee to be a big solid manure handling company in Iowa in a year, you might think that's moving some stuff around, right?

Tony Mensing: 24:17

That's a lot of moving. Yes, and it does make sense, I think, looking from the outside in that if you're gonna focus on that as a as a primary business, that you're gonna work to find the efficiencies there.

Dan Andersen: 24:33

Yeah, you have to, right in order to take something that's a seasonal activity and turn it into a full time job, you have to maximize the number of days you're bringing in income. And we saw the same thing for liquid manure. Essentially, on the liquid manure side, the average employee moved about six gallons, 6 million gallons of liquid manure annually, right? And that's bigger than some of the liquid manure companies that we saw.

Tony Mensing: 24:55

That's, yeah, that's a sizable amount of moving as well.

Dan Andersen: 24:58

Yeah, that's each person is. Handling basically three swine sites on their own. Swine finishing sites on their own every every year to get it done. 2 million gallons of site, you got to handle three of those. And I can look at that and say, All right, I see how you're getting it done. That's a lot of work, but I see how you're getting it done.

Tony Mensing: 25:13

Right. I guess, along with the volume per employee, or some of those metrics that you might use from a business standpoint to evaluate where things are at, we also probably want to look a little bit at what the costs are to do that application, right? So tell me a little bit more about what you learned there.

Dan Andersen: 25:35

Yeah, that's what everyone really wants to know, right? You're cutting right to the chase of how much does it cost to move some manure around. And I think that's where we tried to do maybe some of our best survey questions. And that was something I learned from the last time we did this. Specifically for liquid manure, we asked, What would you charge to put manure on at 4000 gallons an acre, 10,000 gallons an acre, and then at 20,000 gallons an acre, trying to replicate close to what a swine finishing site might be, close to what a gestation farrowing site might be, maybe a deep pit beef facilities a little below that, but at least in the ballpark. And then what might a dairy application rate look like.

Tony Mensing: 26:11

Fair representation of most of the work that's getting done.

Dan Andersen: 26:14

That's right. So when we looked at the tank companies, on average, they were charging about 1.8 cents a gallon. The range on that is about two tenths of a penny. So if you told me you were charging two cents a gallon, nothing to it, right? You're within one standard deviation.

Tony Mensing: 26:28

Sure.

Dan Andersen: 26:29

What was interesting to me is they were pretty much a flat rate across the board, no matter what rate I was putting on charging the same price. And I hadn't thought of that before, because I thought, well, there's an economy of scale and and it turns out, with tanks, there probably isn't much of one. Most of one, most of my time is driving to the field, driving back. The amount of time I'm in the field, actually unloading is pretty insignificant. So it makes sense, with that cost structure.

Tony Mensing: 26:49

A smaller fraction of the actual time and equipment use that's involved in that. Yeah.

Dan Andersen: 26:54

That's right. Whereas when we looked at some of those umbilical systems, at swine finishing rates, essentially the same price, 1.85 cents a gallon.

Tony Mensing: 27:02

Sure.

Dan Andersen: 27:02

But we saw that decreasing price as we got to some of those higher application rates. Right? Essentially, I'm pushing more gallons through my piece of equipment. I can get better at utilization of that that equipment, I don't have to maybe move from field to field as much. And we saw the price drop for swine finishing manure, for gestation farrowing manure, maybe down to a penny and a half a gallon, and then at maybe some of those dairy rates closer to 1.2 cents a gallon.

Tony Mensing: 27:26

Interesting. That makes sense when you lay it out in that structure. But it's interesting how that may be different depending on what type of system you're using or what business model you're following.

Dan Andersen: 27:40

Yeah, and I think it also points to, I felt like for a while that we probably have been using umbilical systems more on gestation farrowing, it makes a lot of sense, and when you look at the price structure, it bears out why people would make that decision.

Tony Mensing: 27:50

Right? It's nice to see the survey results support what you think reality is.

Dan Andersen: 27:55

Thank goodness, right? The other thing is, back when we did this in 2014 we asked, basically, how much do you charge to go an extra mile with a gallon of manure? And we did that again this year. Back in 2014 the going rate was about a 10th of a penny a mile a gallon. So for every gallon I had to move it beyond the first mile, I'm gonna charge you a 10th of a penny. These days, the prices went up, fuel prices went up, labor prices went up. They're charging about 310 of a penny a mile a gallon.

Tony Mensing: 28:20

Okay.

Dan Andersen: 28:21

So as you think about moving manure further from our facility, maybe not quite as easy to make that decision as it would have been back then, right?

Tony Mensing: 28:28

Right. The increased cost is is something that everybody has to keep in mind on that side. But it's interesting to think through how that has changed over the last handful of years. ,

Dan Andersen: 28:40

Yeah, and I think when I did that in 2014 one of the things I said is, well, it's easy if you're pricing it that way, to say, I want to move it further, but we won't be able to finish if everyone's taking advantage of sort of that cost structure. And I haven't played with this number at all to see sort of how it works out, but hopefully it's a sign that they're valuing their time, the extra time it would take to move manure a little bit further closer to what it really takes to get the job done, and takes away maybe that huge advantage we saw before, and make sure that we can still finish manure application in Iowa.

Tony Mensing: 29:08

Sure. Yeah. I mean that also makes sense in that we as a industry are concerned about the time that's available to get the work done. So I know you ask some, some other questions about concerns that the industry has.

Dan Andersen: 29:24

I did.

Tony Mensing: 29:25

some of that.

Dan Andersen: 29:25

I do did, but before I get to that, I want to give some solid manure prices for applications.

Tony Mensing: 29:28

Oh, great

Dan Andersen: 29:29

Yeah, just to be equal opportunity, right? We replicated the same thing, trying to do two tons an acre to say, what maybe a layer facility might be putting on for manure. Six tons an acre to say, this is probably where a turkey facility might be. And then 15 tons for some of that other stuff, maybe separated dairy solids or bedded pack manure. At that low rate, we were in that $14 per ton on average. Again, a huge range, but $14 a ton to get it applied at six, we dropped closer to that $11 a ton. And by the time we got to 15, you might be in that. $8 a ton sort of range for application costs

Tony Mensing: 30:03

Sure.

Dan Andersen: 30:03

So just as a point of a comparison, but yeah, we also talked about concerns, and that was the place I wanted to know more about. What are the fears in the industry? And we've talked about this a little bit, but the ones that really came up at the top were sort of costs. They're driven by machinery costs. How much do I have to pay to get into the industry? Can people actually find a way to get in the industry with high machinery costs, and then labor. And I was actually surprised labor wasn't number one. I feel like there's a huge pressure, but it was really comparable. And lots of people answered both for those two. But we did see other things like application capacity. I have a lot of customers who want me to them. Well, they probably wanted me to them last week, essentially, and they're saying I need to get done. I'm full or I'm worried about what I'm going to store for next year, and you have a list that everyone expects you to get there.

Tony Mensing: 30:48

And not everybody can have the first spot on the list, right? That's right.

Dan Andersen: 30:51

And I don't know that you want the first spot on the list, but you definitely don't want the last spot on the list and being frozen out and not getting it done.

Tony Mensing: 30:58

Each comes with its own set of concerns, no doubt, but yeah, there's an optimal and if I'm the customer, I want the optimal right?

Dan Andersen: 31:05

That's right, and everyone can't be the optimal. But I think the way they answered that there was a lot of thoughtful responses about, how do we as an industry make sure that we can handle the capacity we need to how do we get this done? I'm worried about what my clients are asking, and we want to be there to support them. And I think that's great to see. It is a service based industry, and they care about Iowa farmers. They care about doing the best they can. But man, it's a rock and a hard place to say, I need to get this done. And like I said, we've been blessed with some few nice falls in a row. This one included where working days are probably stacking up one after the other, and you start to worry a little bit about what happens if I don't have those working days? What happens if we have a wet fall?

Tony Mensing: 31:48

And we will someday, right? I assume.

Dan Andersen: 31:51

I'd say we will we have in the past, I know. So it's got to come back to us at some point, right?

Tony Mensing: 31:55

And the other hard part of that is they are concerned, and they do a great job getting all their work done, but it still has to be economically viable for everybody that's involved.

Dan Andersen: 32:08

Yeah, and I think that came through as well, right? They asked, What are some of the things we need to be doing? I'm worried about hitting low application rates. I'm worried about pricing. It's got to be a price that works for me so I can be a business, but I want it to work for you too, right? You're my client, and I want you to still be in business yet next year, and a lot of that came through. And, and we saw things of concerns about neighbors changing regulations that might really be an impediment to getting the job done right. And I was excited to see them share thoughts on that. And I thought they were very frank and very useful concerns, concerns that I knew were out there, but it was nice to see they're thinking about the same challenges, probably from a more personal level than I have to yeah.

Tony Mensing: 32:46

Sure, yeah, that's that's good to know that they are aware of the potential issues that we're going to have to face.

Dan Andersen: 32:57

That's right, and I think it helps position us at Iowa State to maybe try and hopefully address some of these concerns. For instance, when I look at me, when I look at machinery costs being a primary concern, I don't know that I can make machinery costs go down, but it does mean that if we want new people that enter the industry, I could be doing a better job of helping say, this is a business model, this is what the average company looks like. How do we make this cash flow? What does it work? What does it look like to work? And can you do it as a full time job, or do you have to think about, I own pigs, I own a barn, and I have to figure out how to do this part time as I work my way into the industry. And I feel like that's a place we could strengthen where we've done certainly some of the equipment companies, I think, are helping with that, but I think there's a role for us to play there.

Tony Mensing: 33:35

Sure, there's a lot of value in that knowledge, in helping somebody see the big picture.

Dan Andersen: 33:42

And especially you have to show up to the bank and get a loan for this. Or what does it take to cash flow? Or if I have this piece of equipment, I need to say I'm going to run x gallons or x tons a year. How do I start thinking about I need this for a customer base, or I need to make sure I have a rock farm to start me out that's going to be X percent of my business, and then some flexibility to stack customers on that. And I don't think that's an area we ventured much, but it is an area that some of our colleagues, maybe in the farm management team, can help put together some numbers and say, This is how we would go get a loan for this, and this is what you have to think about it as a business. And is that what you really want to do? And how do you structure that for yourself to work.

Tony Mensing: 34:20

Sure, it's a it's a group effort, I think. And based on the survey results, I don't feel like there's an overabundance of supply from the commercial manure applicator standpoint. But also, to your point, if somebody's going to start in that business, how else are they going to know whether things are viable or not, without knowing even as simple as, what are my What are my options from a cost standpoint? So what can I charge? So if we got results back that, say average is 1.8 cents per gallon, that's a really good starting point. That's right.

Dan Andersen: 34:55

I think that basic information like that, you know what it might be for your company, but if you're starting out. It is hard to know what, what I can go to compete with, what I actually have to hit for a cost structure and all that, I think really helps just center the industry to know where we're at and maybe the direction we're moving. And I find that really helpful. I think it's been insightful for me, and hopefully we can take some more advantage of some of this data and get it shared a little bit wider with some publications here soon. Yeah, that sounds fantastic. All right, I wanted to say, thanks for talking me through this today, Tony, I really appreciated your time. I think it's been a pleasant conversation, and hopefully all those who have listened have learned a little bit more about the manure application industry we have in Iowa today, and can help direct where we want it to be in the future.

Tony Mensing: 35:35

I certainly know I have learned a lot, and it's really interesting information that you gathered from your survey. So thanks for having me on. I appreciate it, Dan

Dan Andersen: 35:42

Thanks, Tony. Thank you for joining this installment of Talkin' Crap. Be sure to take a look at the show notes on our website for links and materials mentioned in the episode. For more information or to get in touch, go to our website, www.extension.iastate,edu/immag/. If you found what you heard today useful or it made you think, we hope you subscribe to the show on your podcast app of choice, signing off from a job that sometimes smells but never stinks, keep on talking crap.