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Business Opportunities to be Found in Poultry Litter

by 5m Editor
27 May 2009, at 8:34am

ARKANSAS, US - Litter haulage and spreading provides work and business in the state. This article provides an insight into the business of litter from poultry house to field.

Each year, roughly 238 million chickens are raised and slaughtered in Benton and Washington counties of Arkansas, leaving behind as much as 572 million pounds of litter – deemed trash by some and treasure by others.

The Morning News of north-west Arkansas reports that's enough litter to fill 12,435 semi-trailer trucks lined up from Rogers to Fort Smith and back. Hauling and spreading litter provides more than 150 jobs in the region that are somewhat resistant to the economic downturn, according to industry insiders.

"Litter is big business, no doubt. It's a great substitute for commercial fertilizer and farmers outside the region have discovered its value," said Frank Jones, owner of Performance Poultry Consulting and recently retired professor at the University of Arkansas.

He said the organic matter in the litter when applied to pasture land or crop acreage changes the composition of the soil, allowing it retain more moisture.

"I don't see poultry litter as a waste product but a resource. The benefits of using litter as a fertiliser include retention of both moisture and minerals within the soil as well as reduced erosion," said Josh Payne, animal waste management specialist for the Oklahoma State University and the Oklahoma Cooperative Extension Service in Muskogee.

Joe Christian farms 2,400 acres near Cash, west of Jonesboro. He said last year he purchased 100 tons of poultry litter but could not get any early enough this year before planting his rice, soy beans and wheat.

"More and more large farms here in eastern Arkansas are using litter because of the cost savings. There was not enough litter to go around this spring in my region," Mr Christian said.

He said litter works well to rebuild the land after the top soil has been scraped in between plantings. "It's bulky and contains foreign matter along with the nutrients to rebuild fertile ground."

Litter value

The price of litter changes much like any commodity. Quality, availability with respect to demand, comparable commercial fertilizer prices and transport all impact the price of litter purchases and delivery, said Denny Brown, co-owner of D & B Litter in Siloam Springs. Mr Brown has been in the business of brokering and hauling litter for nearly three decades.

Mike Traylor, owner of Traylor Spreading in Prairie Grove, said litter in the poultry house is bringing between $6 and $10 per ton, down from $15 per ton a year ago. Litter prices move in tandem with natural gas and crude oil prices because the litter is a substitute for commercial fertilizer and its price moves, litter prices follow suit, Mr Traylor said.

While it's not a lot of money to the grower, most will trade out the litter for fresh shavings and bedding, which would come out of their pocket, Mr Jones told Morning News. "I can remember when growers had to pay to have the litter scooped up and moved off their farms, so if they can at least trade it out for bedding, that's a help to the bottomline," he said.

Commercial inorganic fertiliser costs about $450 per ton for standard 13 per cent nitrogen, 13 per cent phosphorus and 13 per cent potassium, according to the Farmer's Exchange in Bentonville.

On the sell end of a litter trade, Mr Traylor said the going rate is about $30 per ton, which includes local transportation and spreading. That said, typical chicken litter contains about four per cent nitrogen, two per cent phosphorus and three per cent potassium and as is less potent, requiring more of the organic fertiliser per acre.

The margins for litter hauling and spreading are thin at best netting between $2 and $5 per ton after expenses, according to both Traylor and Brown.

"It's a volume business but we have been able to grow in size over the years, despite increased competition, Mr Traylor said.

Local extension agents estimate about a dozen local litter hauling businesses have sprung up in recent years as farmers and truck drivers have sought extra income.

Moving litter

Mr Traylor began hauling and spreading litter in 1976 with one truck, trailer and loader, accoridng to Morning News. Today, he employs 27 full-time workers, running 17 trucks, 30 tractors and several loaders. He said there is plenty of work between his litter spreading business and a sideline poultry shaving business.

"We haul litter as far north as Kansas, eastward into Mississippi and westward into central Oklahoma, about 350 miles is about as far as we go," Mr Traylor said.

Mr Traylor estimates he has invested more than $2 million in equipment to run the expanding business in recent years.

Mr Brown also brokers and sells litter in a 400 mile radius. Recently, Traylor and Brown worked together on a deal as Mr Traylor's trucks picked up more than 10 tons of de-caked litter on a large poultry farm east of Springdale, hauling it to a buyer in south-west Missouri, secured by Mr Brown.

"Brokering a deal between a seller and a buyer is much like orchestrating a dance. You have you work with the seller who is in between flocks – a two-week window – and a buyer who can take the exact tonnage and accepts the quality of litter from the buyer. Then we need dry weather to pull off the deal, because the spreaders will bog down in the fields and storing the litter is not an option," Mr Brown said.

Both Traylor and Brown said this wet spring has compromised their ability to serve all the farmers who called.

"We had to roll several farms over for another cycle because it was too wet to spread the litter," Mr Traylor said.

Typically, poultry farmers de-cake or skim the floor of the houses, cleaning them out one time a year. There are 571 broiler farms in Benton and Washington counties, according to the National Chicken Council. That does not include dozens of breeder farms, hatcheries or roughly 50 turkey farms that also produce litter.

Sheri Herron, executive director for BMP Inc. in Farmington, said the company hauled about 100,000 tons of litter out this region last year.

BMP is a non-profit group that began in 2005 with government grants to create a marketing strategy for selling litter and hauling it outside the nutrient excess areas of both the Spavinaw and Illinois watersheds.

Tracking litter

Ongoing litigation between Arkansas poultry companies and the State of Oklahoma with respect to water quality downstream has changed the rules in recent years for spreading litter within north-west Arkansas and north-eastern Oklahoma, Mr Payne told Morning News.

He said detailed records and tracking are required by the state governments from parties selling and buying litter.

Ms Heron said 99 per cent of the litter BMP hauls goes outside the immediate area. She said the state of Arkansas gives a five-cent per ton subsidiary to haulers who truck the litter outside this region.

Both Traylor and Brown said they keep records on who buys and sells litter, where and when it is shipped and spread.

Mr Payne said farmers are also required to have nutrient management plans in regions where nutrient excesses have been determined – north-west Arkansas and north-eastern Oklahoma.

Traylor and Brown said they sell and spread litter on smaller farms inside the Illinois Watershed when nutrient management plans allow but they haul a larger amount of the litter outside the immediate area.

Baling litter

Traylor and Brown work both sides of a litter sale in the same day, taking the litter from the chicken house and spreading it on the buyers fields, reports Morning News. Rain compromises their ability to spread and they must also work around the grower schedules, when they do not have birds.

Tracy Argo and White River Fertilizer in Fayetteville do not have to depend on a sunny day or same day move for the litter orders they broker.

The company uses a baling machine and compresses the litter into a 4-foot by 4-foot bale wrapped in plastic.

He said the bales weigh about 3,300 pounds and store and transport easily on flat-bed trailers.

Mr Argo began running the baler full-time last June when he and partner, Bruce Johnson, purchased the machine that was originally part of a poultry research grant by the University of Arkansas.

"We can process 240 tons per hour and focus on large commercial orders for row croppers in the eastern part of the state," Mr Argo said.

White River Fertilizer is a processor, acting as a middleman brokering the sale to commercial farmers. The company contracts the loading and hauling business through Bryan Bradley, a local hauler like Mr Traylor and also uses independent truckers to transport the bundles across the state.

The company does not apply or spread the litter for the farmers.

Mr Argo said the going rate for baled litter is about $35 per ton plus transportation costs.

Mr Christian said he is anxious to try the baled litter and plans to purchase some later this spring for a test run.

"Storing the litter is the biggest hurdle large commercial farmers face in using the organic fertiliser. We need to get the litter in early February and we typically use one to two tons per acre, depending on nutrient needs," Mr Christian said.

White River's large baler was recently moved from Lincoln to a farm location near Summers.

Mr Argo said they employ five full time workers to run the baler operation pumping about $470,000 into that rural economy on an annual basis.

Mr Jones said the baler concept is a good one because it allows for storage and easy transport, difficulties traditional haulers routinely face. The downside is the cost of the baler – more than $1 million.

The baler is manufactured by Mammoth Corp. and according to Mr Argo, White River owns the one and only such machine in operation at this time.

Mr Argo said the business is more or less break-even or slightly profitable at this time given the outlay costs and the lower prices of litter.

He is optimistic that the machine can also be used to bundle and blend solid waste for municipalities which is a broader application also being studied, concludes the Morning News article.