When using a custom manure applicator, costs are usually quoted as dollars/unit (ton or 1,000 gallons). Some will quote costs as dollars/hour. The dollars/unit charge will have some implied specifications such as hauling distance less than two miles or application rate at 5,000 gallons/acre. If these specifications are not met, the cost/unit will change. The dollars/unit charge makes it easy for livestock producers to estimate the cost of manure distribution because they usually have a good estimate of the number of units that need to be land-applied. The dollars/hour charge presents information in a way that allows the livestock producer to make better management decisions. For example, the livestock producer might be choosing between a field that is one mile away and a field that is three miles away. If the producer knows that the equipment travels 15 mph, the additional two miles will take eight minutes per load. This additional eight minutes per load can be multiplied by the number of loads to the field and the dollar/hour charge to arrive at a cost of going the extra two miles. With this information, the producer can decide whether the cost exceeds the value or not.
If the farmer owns the equipment, his/her cost is the annualized fixed cost of the manure-handling equipment and the operating cost for fuel and labor. These total costs should then be divided by the number of manure units applied.
Author: Ray Massey, Agricultural Economist, University of Missouri
