Animal Waste

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Animal Waste
David Zilberman EEP 101/ECON 125
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Animal Waste Concerns

• Manure and wastewater emit nitrogen and
  phosphorus, organic matter, sediments, pathogens,
  heavy metals, hormones, antibiotics, and ammonia.
  
• Low levels of dissolved oxygen (anoxia) result in
  eutrophication and toxic algal blooms which lead
  to
• Outbreaks of microbes (Pfiesteria piscicida)
• Kills fish.
• Produce pathogens (Cryptosporidium) in drinking
  water.
• Food safety risks when manure is applied to
  crops.
• Ground water contamination by nitrates.

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Animal Feeding Operations

• Animal feeding operations (AFOs) are agricultural
  enterprises where animals are raised in confined
  structures.
• Feed is brought to the animals. They do not
  graze.
• There are 450,000 AFOs in the United States.
• AFOs are main sources of animal waste pollution.
• Concentrated animal feeding operations (CAFOs)
  are AFOs regulated as point sources by the EPA.
• CAFOs are big (more than 1,000 animals per
  facility) small AFOs are nonpoint sources.

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Basic Statistics on Livestock

• The U. S. has a large population of various
  livestock animals. Some (beef cattle) graze, and
  disposal of waste per unit of land is
  controllable. Others are in confined structures,
  and they are the main source of environmental
  problems.
• Even in the case of beef cattle, there are some
  pollution problems with grazing, and cattle
  spends a significant part of their lives in
  feedlots.
• However, the main concerns are with dairies,
  poultry, and swine.

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U.S. Cattle Statistics
Rank State All Cattle (1000)
1 Texas
14,300 2
Nebraska 6,650
3 Kansas
6,550 4 Oklahoma
5,450
5 California 4,600
6 Missouri
4,300 7
Iowa 3,750
8 Wisconsin
3,600 9 South
Dakota 3,550
10 Colorado 3,100
United States
99,501
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Swine 1997
All Hogs Inventory Rank
State (1,000 Head)
1 Iowa
14,000 2 North
Carolina 9,700
3 Minnesota 5,400
4 Illinois
4,750 5
Indiana 3,800
6 Nebraska
3,550 7 Missouri
3,500
8 Oklahoma 1,640
9 Ohio
1,620 10
Kansas 1,430
United States
59,920
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Broiler A new kind of farming. Mostly
contracting
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Poultry
Rank State Inventory (1,000)
1 Ohio
33,142 2
California 30,500
3 Georgia
29,910 4 Indiana
27,189
5 Pennsylvania 26,920
6 Iowa
25,685 7
Arkansas 23,145
8 Texas
22,700 9 North
Carolina 17,175
10 Alabama 16,091
United States
403,495
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Other Waste Sources

• More than 3 million horses.
• 272 million turkeys raised in the U. S. during
  2002.
• North Carolina, 45.5 million.
• Minnesota, 44.0 million
• Arkansas, 29.5 million
• 2002 Sheep and lamb inventory, 8.10 million head
• 2002 Lamb Crop Expected, 4.31 million head
• Dogs and cats.

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Animal Waste and Pollution

• An EPA study (2000) found that agriculture is the
  leading pollution source, affecting 20 of all
  assessed rivers and streams in the United States,
  and AFOs account for 16 of the agricultural
  pollution in the rivers and streams, without
  accounting for manure runoff from cropland.
• 17 of 37 states in the EPA study (2000) indicate
  that animal feedlots are one of the top 10
  sources for ground water contamination in their
  states.
• A waste lagoon has spilled in recent years. The
  most notable occurred in North Carolina in 1995.
  There a 22 million-gallon-spill from an 8-acre
  lagoon, killing 10 million fish.

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The Expansion of North Carolinas Hog Population

• North Carolina's hog population has grown faster,
  from 2.6 million to 10 million hogs between 1987
  to 1997, for a 285 increase in hogs.
• The hogs produce a mind-boggling amount of waste
  19 million tons of feces and urine a year, or
  over 50,000 tons per day.
• They cause health and quality-of-life problems
  for the people who live in the vicinity of
  factory farms.
• Hog waste and the way it is stored harms
  wetlands, rivers, and coastlines.

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From Corn Hog Operations to AFOs

• Midwest farmers have grown corn and used much of
  it to feed their hogs, disposing waste as
  fertilizers.
• Development of cheap fertilizers reduce use of
  manure as fertilizers. Farmers cannot sell much
  of it .
• Livestock facilities increased application of
  waste on their land. High waste/acre causes
  externality.
• New management practices, cheap labor, and
  reduced transportation cost led to migration of
  production to North Carolina and industrialized
  production.
• They have a large volume of animals and high
  rate of disposal per acre.

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Externalities of Animal Production Conceptual
Analysis

• There are two types of externalities
• Runoff and deep percolation that are
  deterministic.
• Random spills.
• In both cases there is concern about
• Surface water
• Groundwater
• Air pollution
• Odor
• Each type of pollution may be addressed by
  different types of policies, but there may be
  some linkages.

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Groundwater Contamination

• Modeling ground water contamination as a result
  of excess disposal
• a waste per cow
• N number of cows/acre
• Z waste seepage
• either N a - C
• Or 0
• C is amount absorbed
• per acre.
• For example, a cow contri-
• butes .2 tons of salt per acre
• Amounts above .3 is leaching
• C .3 and a .2

Z
ZNa-C
N
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Alternative Policies

• Suppose the social cost of pollution is w dollars
  per acre.
• Policy formation depends on information
  availability.
• If pollution is observable, policies include
• Pollution tax of wZ.
• Introduce tradable permits to achieve a regional
  target of pollution.
• If a number of animals and disposal acreage are
  observable
• Tax of aw for every cow above c/a. So, if w 100
  and n 5, the tax will be 100(5-1.5).2
  .7100 70. This results in optimality.
• Limit on cows per disposal area is an inefficient
  policy. It may lead to exit of farmers who are
  efficient but with low acreage. Can be improved
  by allowing trading of disposal rights.
• If only the number of cows is a availablenot cow
  per acre
• First-best outcome is not feasible unless farms
  are identical.
• A tax per cow or a tax on milk can reduce
  pollution by reducing herd size, but obviously
  they are inefficient.

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Expanding the Disposal Area

• The pollution of groundwater is a result of high
  density of animals per disposal acre.
• This can be alleviated by reducing the size of
  the animal population or increasing disposal
  acreage.
• A subsidy on the use of manure as fertilizers
  increases the disposal area and reduces disposal
  per acre as non-livestock operators adopt this
  activity for the gain.
• To be effective, this policy requires monitoring
  of shipment of waste outside the region and of
  disposal activities.
• If a pollution tax is introduced, and an
  effective monitoring of shipment and disposal is
  feasible, then polluting dairymen may sell
  manure as fertilizers at a discount.

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Changes in the Structure of Livestock Production
Systems

• Traditionally, grain and livestock productions
  were integrated into one farming system. Farm
  animals were grazed on grass or fed on grains
  produced using animal manure as a fertilizer.
• Today, livestock is raised on one farm or in one
  region while grains are produced on another farm
  or in a separate region.

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Contracting

• Most producers who raise livestock neither
  purchase inputs nor sell outputs in traditional
  markets.
• Instead, these producers (known as growers) sign
  production contracts with intermediary firms
  (known as integrators).
• Production contracts specify that the integrators
  will provide the growers with production facility
  specifications and inputs, including genetic
  materials, feed, and veterinary assistance.
• Market contracts, which processors and growers
  agree on, pre-determined output prices.
• Contracting has played a major role in the growth
  of the U.S. broiler sector. Prior to the 1950s,
  very little poultry were raised for meat, mostly
  because meat prices were unstable.
• Contracting assures integrators that they have
  buyers for the feed and growers that they have
  buyers for their chicken.
• More than 90 of U.S. broilers are currently
  produced under contract arrangements (USDA,
  1996).

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Reasons for Contract Production

• Reduction of market risks for growers.
• Growers have specific knowledge of local
  conditions
• Growers provide financing for production capital,
  allowing integrators to expand at a faster rate.
• Contracting increases the chance to observe
  behaviors of higher management.
• Environmental regulations and enforcement
  standards.
• Only the producers who actually raise livestock
  are directly liable for damage from the waste
  residues generated at their production sites.
• Assistance programs and local resistance to
  environmental damage.
• Producers can generally qualify as recipients of
  cost-sharing assistance from the government,
  while integrators are too large in size to
  qualify for such assistance.