Cost effectiveness of the mitigation options for the model farm systems

Each of the measures was subjected to a detailed costing. This was carried out using an Excel spreadsheet with each step of the costing being broken down into its components in order to enable complete transparency.

The output of the costing was determined by the needs of the Cost Cube analysis required, for example whether it was for producing the cost on a £ per ha, £ per tonne of slurry or £ per head of livestock basis. Any savings were calculated as well as the costs and the net result was used for the cost (+ or -) or the measure.

Some of the measures were presented as alternatives, for example Measure 1b where nitrogen reduction could be reduced by more than one approach.

Some of the measures were trading expenditure, others involved capital expenditure and some contained components of both. In the case of capital expenditure, it was amortised over a period of time relevant to that type of expenditure. Amortisation is a conventional method of spreading capital expenditure, over a period of years, for example investment in a permanent building. Clearly, this provides a lower the annual cost than allocating the whole cost in the year of investment. A full list of amortised measures is found at the end of this section.

Any references used for the basis of the costs were included in the document describing each cost in detail including personal communications with suppliers or experts in the particular field.

Source Measures:

Measure 1 Dietary Manipulation

1.a. Reduce/remove gut pathogens (antibiotics): £, dairy, pigs & poultry, per animal.

This measure may be practically possible, but recent trends in the industry are for these practices to become unacceptable and the large retailers are seeking to eliminate such additives from feed.

The cost of such additives would be up to £20/t of feed

In terms of cost per animal:Cowsup to £40/cow

Sowsup to £43/sow

Finishersup to £3.10/pig

Poultryup to £0.85/bird

Pers. comm. Mike Brade 14th October 2004, Nix 2005

1.b. Reduce dietary N intake, £/cow.

This is not straightforward. The practical approach that most farmers would take would be to change the quality of N feed to avoid losses of N from the cow. The alternative would be actually to reduce dairy cow intake of N, which would result in loss of both yield and quality.

The effects would not be straightforward due to the balance of energy and protein, the stage of lactation, the availability of grass and both the quality and intake of grass and forage. Other factors to balance would be any effects in changes to cow health regarding mastitis and antibiotic use.

Dairy cows receive a combination of feeds including bought in dairy compound, bought in straights, straw, home grown crops, urea and forage as fresh and conserved grass. The latter will vary greatly in nitrogen content and cows are fed with the aim of maximising yield and quality. Hence this is a complicated and subjective area to cost. The method of reducing dietary N intake is therefore not certain, but there could be two approaches.

1.b.i. An acceptable way of costing it is to take the difference in cost of feeding over the winter period as follows.

An average dairy cow consumes a tonne of compound over the winter feeding period plus other feeds mentioned above. A farmer would aim to reduce low quality N fed and replace it with high quality protein. This would result in maintaining milk yield and quality whilst reducing N losses in dung and urine. This would involve switching from a standard dairy cake at £107/t to one at £100/t and supplementing with soya, which would be fed at a rate of 2kg/day for 180 days.

This gives a total of 360kg at £148/t, or £46.28/cow.

Pers. comm. Nick Holt Martin 14 January 2005. Tel. 01572 747761 07836 348507.

1.b.ii. The alternative would be to feed a lower protein compound at £7/t less, but this would result in a loss of 4p/litre for milk quality (2pfor butterfat and 2p for protein and a loss of 12% of milk volume over the lactation assuming output of 6850l/cow @ 18ppl.

Cost £389.08/cow.

Pers. comm. Nick Holt Martin 14 January 2005. Tel. 01572 747761 07836 348507.

For sows, protein levels can be reduced from birth to finishing with less than 10% fall in production, say 7.5%, provided the correct balance of amino acids is provided at little or no additional cost. The cost will therefore be 7.5% output plus the additional cost of feed formulation, say £1/sow, a total of £17.28/sow.

Pers. comm. Mike Brade 1st March 2005. Tel. 01704 823173.

For broilers, there appears to be less scope to reduce CP intake and output reductions are greater, where a 4% reduction in crude protein resulted in a fall in output of 8.73%. Gross margin per broiler is very small in any case, so the numbers in the calculation are small, but numbers of birds is large. Hence there will be a £0.02 fall in output, but a saving of £0.02 in feed and a small formulation cost per bird, resulting in no effective change. However, greater reductions in protein in rations are likely to produce larger falls in output and because of the high numbers of birds, this would multiply up to a high figure. For small reductions in N input, cost per bird = £0.008 pers. comm. B Cottrill 2/3/05 01902 754190, Nix 2005.

Measure 2 Reduce total farm livestock numbers, £/head dairy, sows, pigs, layers, broilers.

Reduce numbers of livestock by 50%.

Dairy cows. This enterprise is complicated by stocking rate and forage costs per hectare. Although output per cow will remain similar, numbers will be halved, so in this case, the changes will be expressed in terms of a cow in the original herd. Hence, the gross margin before forage costs per cow will be halved from £777 to £388.50 at 6850l/cow.

There will be some gain in lower forage costs, since fewer animals need to be maintained on one hectare. These savings have been estimated at £50/ha for fertiliser and £65/ha for silage making, i.e. £50.11 per cow in the original herd @ 2.25cows/ha. Thus the net cost of reducing livestock numbers at the gross margin level will be £337.39/cow.

For breeding sows, the cost includes up to weaning. For finishing pigs, the cost is per finished pig. For sows, pigs and poultry, the gross margins per animal have been halved.

Cows£337.39/cow

Sows£108.50/sow

Pig£2.40/pig

Poultry£1.51/layer

£0.115/broiler

Nix, 2005. Any costs other than those included in the gross margin have not been included.

Measure 3 Export manure off the farm, £/t dairy, pigs and poultry.

Cows

Take 50% of the manure to farms that require extra nutrients.

A dairy cow produces some 19.35 tonnes slurry per year. Half of this would be produced in the housed period and of the other half, one sixth might be produced in the collecting yard, parlour and feeding area, a total of 11.3t/cow. Assuming this were diluted from 10% to 6% dry matter, this would increase to 18.8t slurry/cow or 2,820t for 150 cows thus 1,410t to export.

In many livestock areas, there is no requirement for extra nutrients. However, assuming moving from a 1km distance to 5km, using standard kit and a 1,410t spreading load.

SPREADS produces a marginal cost of £1.12/t.

Sows, pigs and poultry

The cost/t from the dairy costings has been used as a contract cost for the other farms, since they may not produce sufficient manure to justify their own machinery.

Storage and treatment of manures

Measure 4 Composting of solid manure (>55C for 3 days). £/t.

This has been costed on the basis of taking the manure to a field steading and ensuring that the whole heap reaches 55C for 3 days by turning twice in the first 7 days. Loading and transport would be carried out whether the manure were composted, so the only cost incurred would for turning with a loader tractor, the cost is £0.85/t (Nix 2005)

Measure 5 Batch storage of solid manure (90 days). £/t.

This measure requires no additional cost. The manure would be transported to a steading as a matter of routine and the only difference is that it would be left for 90 days, a cost of £Zero.

Measure 6 'Fill and draw' storage of slurry. £/t.

Deleted.

Measure 7 Batch storage of slurry (90 days). £/t.

The cost of a standard slurry store amortised over a period of 20 years, £3.99/t (Ryan 2002).

Measure 8 Anaerobic digestion of slurry. £/t.

AD is a difficult subject with a number of examples of different solutions available on the Internet from Defra and Iowa State University to Holsworthy in Devon. Costs vary widely. All reports suggest farm based units will produce a crude gas of low quality and are therefore not cost effective. However, larger units of higher technical quality can produce a high quality gas for generation of heat and power, which can reduce net costs. When these units are used for digestion of other wastes, such as slaughterhouse or pie waste, this income can make the whole enterprise profitable. However, digesters do not reduce the nitrogen content of the digested product and may therefore not be helpful in terms of disposal without exporting some of it to other farms with ‘spare’ capacity for receiving manures and slurries. Where this product is not simply farm slurry, there may be a low willingness to accept it.

Each digester would be an individual case subject to the capacity required for own waste and the nature and quantity of external waste taken in. There are also issues connected with the Waste Directive - controlled waste with imported waste and the disposal of the product of digestion and with biosecurity. In terms of cost effectiveness, the best solution would be to use the minimum slurry from the home farm and the third party waste in a plant constructed away from the livestock enterprise.

Based on a throughput of 2,700t the cost would be around £200,000 for the digester and associated equipment to take off the gas, burn it to heat the slurry to 37oC in order to maintain good bacteria activity. Over a 20-year life at 7% interest, the amortised cost per tonne of slurry treated would be £6.96/t.

However, the costs could be substantially more than this before any income is included. (Pers comm. P Metcalfe, 9/2/05).

Measure 9 Anaerobic digestion and pasteurisation of slurry. £/t.

Pasteurisation is another grey area with costs varying between systems. The technique involves holding the waste at 55oC for 5 hours for farm and ‘kitchen’ waste or 70oC for 1 hour if controlled wastes, such as slaughterhouse or pie waste are included.

The costing is based on 150 cows producing 53l/day slurry i.e. 7950l. This might be diluted from 10 to 6%, i.e. 13,250l per day. There would need to be a pasteurisation tank to hold this level of production, £10,000, a heat exchanger, £1,200 and a reception pit, £5,000 to hold another day of production so that it could be used in the heat exchanger when the first batch had been treated. Heat exchange is required at this point so that the bacteria in the AD tank are not killed. It has been assumed that the heat exchanger would have a capacity of 1,000l. Additional costs would be in pumps and pipework, £5,000.

Heating would be achieved using the gas produced in the digester, so there would be no energy costs for fuel used.

The cost for 2,700tonnes of slurry would be amortised over ten years at 7% to give a cost of £1.11/t. Together with the cost of anaerobic digestion, £6.96/t, the total cost would £8.08/t

Heaters may be required, for example in cold weather, although they have been included in this calculation.

Pers comm. P Metcalfe, 9/2/05.

For Measures 11, 12 and 13, the assumed delivery distance for quicklime etc. has been taken to be 50 miles.

Measure 10 Aeration of slurry. £/t.

A number of systems have been devised for the aeration of slurry. In this case, a robust method of venturi has been costed, which comprises a pierced tube and pump on the floor of a slurry tank, which forces air into the slurry. Because of the viscosity of slurry, several units would be needed in a slurry tank. Installation costs are £4,000 per unit, amortised over a life of 10 years at 7% and running costs of £0.50 per t. Total cost of treatment is £1.27/t. Pers comm. P Metcalfe, 9/2/05.

Measure 11 Quicklime added to slurry. £/t.

For quicklime, a storage system is required because of the health and safety implications. For 150 cows producing 13,250l of slurry per day, a 2% addition would be some 240kg of quicklime. For this quantity and to avoid handling the product, a 1tonne discharger is available at £10,000. This can dispense the required amount of quicklime and avoid any contact with farm staff. A delivered price per tonne at this level of usage would be £150/t. The amortised cost of the discharger plus the cost of the quicklime would be £3.87/t slurry treated. Pers. comm. Ross Marchington Buxton Lime 01298 768444.

Measure 12 Acid added to slurry. £/t.

As with lime, addition rate is 2% for sulphuric acid at a cost of £0.28/l acid. This is available in 1000l stainless steel container, an intermediate bulk container (IBC). Sulphuric acid has a very high bulk density @ 1.75t/1000l. Transport costs are up to 4 times the cost of non-hazardous freight, so £20/1000l has been allowed plus £130 handling charge on IBC. Total cost is £430/1000l and treatment cost is £8.60/t slurry. (Pers comm. K Smith, 9/2/05 & G Cranner of CSC, Perth, 01738 623201 17/2/05).

For nitric acid (commercial grade 60%) delivered in stainless an IBC with a bulk density of 1.365 a delivered price per tonne would be £179 plus £130 handling charge for the IBC or for 1000l, £374 or £7.49/t slurry. Pers. comm. Tennant’s Distribution Ltd. Manchester 0161 205 4454.

One caveat with both types of acid would be the high health and safety risks for on-farm use, requiring a retaining bund around the container, which has been allowed for in the handling cost.

Measure 13 Carbohydrates added to slurry. £/t.

This can be accomplished by adding any waste carbohydrate source, in this case, vegetable processing waste has been included at 1% at a cost of £10/t waste to allow for the waste and transport, a cost of £0.10/t slurry. Pers comm. K Smith, 9/2/05.

Measure 14 Cover slurry store to reduce volume. £/t.

The cost of a cover, amortised over 20 years @ 7% would be £1.08/t (Ryan 2002).

Reduce fertiliser inputs

Measure 15 Integrate fertiliser with manures. Saving £/t of fertiliser.

Using slurry at relevant rates for NVZ limit of 170kgN/ha, a N cost of £0.35/kg the financial values of slurry is as follows:

Savings for Cows£83.95/ha or £1.68/t slurry

Pigs£84.21/ha or £2.01/t slurry

Broilers£95.84/ha or £16.75t slurry

The availability of N in each of the slurries has been assumed to be:

Cows, 30%, pigs, 40% and broilers, 25%.

For arable, BSFP suggests that farmers already reduce bagged N inputs by 20kg making a saving of £8/ha at a N price of £0.40/kg. For dairy farmers, BSFP suggests that no allowance is made for N, so there would be no saving.

Measure 16 Introduce clover into the grassland system. £/ha, dairy only.

Based on ploughing up existing permanent pasture sward and drilling long term clover mixture on a dairy farm and assumes the management skills to maintain the clover sward. The use of clover will probably remove seasonal N use apart from 50kg in spring, so saving 150kg N per annum. Although this is not conventionally seen as a capital investment and is not amortised, the cost has been spread over a five-year period to take account of the long-term nature of the operation. This produces a negative cost, that is a saving of £15.43/ha per year (M Sims, British Seed Houses 11/3/05 Tel. 0117 9823691).

Measure 17 Remove artificial fertilisers from farm system. £/ha arable and dairy.

For arable this has assumed no manure or slurry, halving the yield of feed wheat from 7t/ha to 3.5t/ha @ £70/t (Farmers Weekly interactive 8 Feb 2005), a cost of £245.00/ha less the savings in N fertiliser not used, £80.00, i.e. 200kgN @ £0.40/kg(Andrew Wells, June 2004), a net cost of £165.00/ha.

For a dairy farm it has been assumed that the fertiliser will not be replaced by manures or slurry and that forage production will be halved. This will require silage to be brought in at a rate of, say 15t/cow @£20/t delivered, a total of £300/cow less savings in N fertiliser of £80.00/cow, i.e. 200kgN @ £0.40/kg(Nick Holt Martin, June 2004) for intensive grass, a total cost of £264.44/cow.

Measure 18 Change fertiliser type. £/t fertiliser.

I.e. change from ammonium nitrate to calcium nitrate. Using a N cost ratio of 0.35:0.50 NH4NO3 to CaNO3. NH4NO3 costed at £155/t (Farmers Weekly interactive, 8 February 2005) CaNO3 costs 221.43. A marginal cost of £66.43/t.

Mobilisation Measures

Management of dirty water.

Measure 19 Collect and store dirty water. £/cu m for 2,200 cu m.

Steel store plus cover, 4 traps, 2 gullies, 2 manholes and collecting pit all @ £5,245 costed @ 20 yrs. @7%, £5.29/t. (Ryan 2002, Nix 2005).

Measure 20 Minimise dirty yard area. £/dairy cow.

Provide quality fences @ £10/m length, 50m plus 2 no. gates @ £125 including posts and furniture, based on 150 cows, £1.22/cow. (Based on Nix 2005).

Fertiliser application timing.

Measure 21 Avoid fertiliser spreading to fields at times of high risk. £/ha.

Zero cost, but may be timeliness consequences in terms of opportunity cost. This may be zero or a higher figure if spring top dressing timeliness is not optimum on arable crops or grass, causing a 10% reduction in output. For dairy farms, total silage output might be 14t/ha DM with a 10% loss representing 1.4t/ha. The farmers would attempt to make up the loss by buying in silage, say 5t/ha fresh weight @ £20/t, £100/ha. Arable £49.00/ha, dairy £100.00/ha. (RB209, pers comm. B Chambers).

Manure application timing

Measure 22. Avoid FYM spreading to fields at times of high risk. £/ha.

This measure assumes that there will be an opportunity cost of not spreading FYM when initially planned and the possible clash with another operation when the weather improves, £1.00/ha.

Measure 23. Avoid slurry spreading to fields at times of high risk. £/ha.

Additional slurry storage for 150 cows for 60 days @ 53l/day requires 477t @3.99/t (Ryan 2002) = £1,903.23 over 200ha = £9.52/ha

Measure 24 Manure application location. Do not apply slurry/manure to well connected hydrological areas (Defra water code). £/ha

This measure may simply mean avoiding part of the farm or if all of the farm is well connected hydrologically, all of the farm. If it were a matter of simply avoiding one or two fields, the cost would be minimal at £1/ha management charge. If all of the farm needs to be avoided, it would be a case of exporting the manure.

Assuming export of manure, marginal cost of export to 5km = £1.12/t, see Measure 3.