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  • Broiler Litter as a Nutrient Source for Crop Production

    The US poultry industry generates roughly 13.9 million tons of broiler litter (BL) annually. Broiler litter is a mixture of chicken feces, urine, bedding material (such as pine shavings, peanut hulls, or sawdust), spilled feed, and feathers. Most BL is applied on agricultural lands such as pastures and row crops as a soil amendment to improve the soil organic matter. 

    Broiler litter typically contains 11 essential plant nutrients – nitrogen (N), phosphate (P2O5), potash (K2O), calcium (Ca), magnesium (Mg), sulfur (S), copper (Cu), zinc (Zn), iron (Fe), manganese (Mn), and boron (B).  It is a valuable organic fertilizer for sustaining soil fertility and supporting plant growth. However, nutrient concentrations in BL are highly variable and depend on several factors such as bird age, type of ration fed, number of flocks between cleanouts, age of litter, amount and type of bedding materials, compositing method, litter pH, and moisture content. The nutrient content of litter may also vary from one poultry operation to another. A survey analyzing the nutrient content of BL samples collected from poultry houses across Alabama revealed significant variability in nutrient composition. This is consistent with the BL analysis from Kentucky in a previous Southern Ag Today article (here). Table 1 provides the range of nutrient concentrations in BL collected from seven different poultry farms supported by three different integrators (Pilgrim’s Pride, Tyson, and Ingram). The analysis revealed that N content in litter can be as high as 66 lb/ton and as low as 34 lb/ton, with a median value of 58 lb/ton. Similarly, the P2O5 content was found to vary between lows of 38 to highs of 59, with a median value of 42 lb/ton. K2O was found to vary between 46 to 73 lb/ton with a median value of 52 lb/ton. Interestingly, the total carbon content of BL ranged from 260 to 609 lb/ton. Each ton of BL applied contributes a median of 528 lb of carbon to the soil. While the median values suggest a typical nutrient composition of broiler litter as 60-40-50, relying solely on these estimates can be costly for row crop growers purchasing litter as a substitute for commercial fertilizer—especially during periods of high fertilizer prices. To ensure accurate nutrient value and cost-effectiveness, it is strongly recommended that growers collect a representative sample of the litter and have it analyzed by a certified laboratory specializing in manure testing. This ensures they are getting the nutrient value they are paying for.

    Growers using BL as fertilizer should be aware of the potential environmental risks associated with its application. For instance, applying litter annually for more than five consecutive years can lead to phosphorus accumulation in the soil, which may negatively impact water quality. Growers should watch for extreme phosphorus buildup by routinely testing their soils. Additionally, applying litter to fallow fields during the winter months should be avoided, as rainfall can cause nutrients to dissolve and either wash away or leach into the soil, reducing effectiveness, increasing environmental risk, and lowering the economic value of BL. The ideal time to apply litter is 10 days before spring green-up in the case of pasture and 10 days before planting a row crop. The nutrients in litter are available as both fast-release and slow-release. The fast-release components provide nutrients within a matter of 10 days, whereas the slow-release nutrients become available over months or even years. Most farmers should take advantage of the fast-release nutrients by synchronizing the litter application timing close to the timing of spring green-up.

    Determining the value of BL compared to commercial fertilizer isn’t always easy. If you have values of N, P2O5, and K2O, the calculation is straightforward. However, the availability of fertilizer materials may include products such as DAP (18-46-0).  In this case, use the value of N from a material that is N only (Urea) and subtract that value from the price of DAP. The remaining value is the price of P2O5 in DAP. Recent fertilizer prices in Alabama averaged $655/ton for Urea, $884/ton for DAP, and $509 for Potash (0-0-60). These prices give us a per unit value of N $0.71, P2O5 $0.68 and K2O $0.42.  Using the median value of nutrient values in Table 1, the value of a ton of BL is $91.58. (N $41.18, P $28.56, K $21.84). If BL can be purchased, delivered, and spread for less than $91.58 per ton, it should be considered as a possible substitute for commercial fertilizer. Consider the micronutrients and carbon as a bonus towards soil fertility.

    Table 1. Range of nutrient concentrations in broiler litter 

      As sampled or wet basis (lb/ton)
    Sample #moisture content (%)N P2O5K2OC CaMgAlBCuFeMnSZn
    12934394626042105.00.11.16.40.752.30.7
    21853597352746120.30.11.40.30.912.20.9
    3206640526092380.20.30.30.20.89.30.6
    41858426054040100.30.10.30.21.023.40.8
    52065385452846100.40.10.30.20.924.40.8
    6275447485213490.41.40.50.41.012.90.7
    7256043505702780.20.30.40.10.89.30.6
    Mean2356445550837910.3111211
    Minimum1834384626023800.10.30.1191
    Maximum29665973609461251161521
    Median2058425252840100.330.100.380.250.8912.920.74

    Prasad, Rishi, Kent Standford, and Max Runge. “Broiler Litter as a Nutrient Source for Crop Production.” Southern Ag Today 5(24.1). June 9, 2025. Permalink

  • Understanding the Section 199A Tax Deduction

    Understanding the Section 199A Tax Deduction

    Recent tax discussions have focused on extending some of the provisions of the 2017 Tax Cuts and Jobs Act (TCJA), which were set to expire in 2025.  One of the lesser-known provisions that impact agricultural producers is the Section 199A deduction.  As in all tax provisions, the details are quite complex, but a layman’s explanation can give a flavor of the key provisions.  The history of the provision dates to 2004 when Congress passed the domestic production activities deduction (DPAD) which provided a deduction to companies that manufactured inside the U.S. Farming was included in the definition of manufacturing, so agricultural producers qualified, but there was also a W-2 wage requirement that limited the value to many commodity producers. Agricultural cooperatives were also included, and they could elect to reflect the farmer’s production and associated tax deduction at the cooperative level.

    The DPAD was eliminated by the 2017 tax bill in exchange for the reduction of the corporate tax rates.  Because over 98% of producers are operating pass-through taxation entities, few farmers benefited from the decrease in the corporate tax rates.  Agricultural cooperatives also did not benefit from the tax rate decrease since they typically pass on profits and the taxation of those profits on to their members through patronage.  In order to create parity for those groups the TCJA created the Section 199A qualified business income deduction.

    As a simplification, Section 199A provides a deduction equal to 20% of qualified income, which is roughly equivalent to taxable income.  That deduction lowers the effective rate on pass-through taxation entities such as sole proprietorships, partnerships and limited liability companies to be more on par with the corporate tax rate.  The deduction is limited to 50% of W-2 wages paid since the original intent of the DPAD legislation was to encourage manufacturing and employment in the U.S. 

    The cooperative provisions of Section 199A are somewhat complex.  The cooperative calculates the deduction based on their qualified income and it is limited to 50% of the cooperative’s W-2 wages.  In the case of cooperatives, qualified business income is calculated before patronage distribution, which is analogous to before tax income in a corporate firm. The cooperative can either retain the deduction at the cooperative level or pass a portion or all of it on to the producer. Because of that pass-through possibility, producers who market commodities through a cooperative have their farm-level Section 199A deduction reduced.  Unfortunately (in terms of complication) the cooperative member’s offset is based on formulas relating to the farm qualified income and W-2 wages and is not related to the amount of deduction (if any) passed on by the cooperative.  

    Because of that structure, cooperative boards of directors face complicated decisions on the amount of the cooperative level Section 199A deduction that is retained or passed on.  Those boards must consider both the loss of deduction that the member received from marketing through the cooperative and the value of the deduction to both the cooperative firm and cooperative member.The Section 199A deduction has been an important tool in creating tax parity between corporations, farm businesses and agricultural cooperatives.  As with many tax provisions it is perhaps unnecessarily complex. It has positively benefited both producers and agricultural cooperatives which typically did not benefit from the corporate tax rate reduction.  It has also created a new, and somewhat complex, role for agricultural cooperatives in pooling and distributing tax deductions. If Section 199A becomes and remains a permanent feature of the tax code, that tax deduction management may come to be viewed as just another aspect of the traditional roles of agricultural cooperatives.  I wonder if the Rochdale Pioneers envisioned that role when they developed the original cooperative principles in 1844?

    Kenkel, Phil. “Understanding the Section 199A Tax Deduction.” Southern Ag Today 5(23.5). June 6, 2025. Permalink

  • Just How Bipartisan are Farm Bills?

    Just How Bipartisan are Farm Bills?

    While the farm bill debate in the U.S. Senate has tended to be rather bipartisan in nature, that has not been the case in the U.S. House of Representatives, at least not in recent memory. Invariably, at some point in the farm bill debate, the minority party in the House will accuse the majority party of “partisanship” that will “bring about the end of the bipartisan coalition needed to pass a farm bill.” In this article, we examine these claims in the context of voting history on the farm bill in the House over the last 40 years.

    As noted in Figure 1, the 1985 and 1990 Farm Bills both had a significant share of minority (i.e., Republican) votes on the House version of the farm bill along with the conference agreement. With the Democrats in the minority for the 1996 Farm Bill – after having been in the majority in the House for 40 years – they accounted for just 20% of the “yes” votes on the House version of the farm bill but ultimately accounted for one-third of the “yes” votes on the conference report. The 2002 Farm Bill was very bipartisan in nature with the minority (i.e., Democrats) accounting for roughly half the “yes” votes on both the House version and conference report.

    The significant departure came in the 2008 Farm Bill when Democrats regained control of the House.  For the 2008 Farm Bill, the minority (i.e., Republicans) accounted for just 8% of the “yes” votes on the House version of the farm bill. Despite the partisan nature of the House version of the farm bill, Republicans ultimately accounted for 32% of the “yes” votes on the conference agreement. That dynamic persisted (and became even more pronounced) in the 2014 and 2018 Farm Bills, with the minority (i.e., Democrats) not voting for the House version of the bill in either case but accounting for 35% and 51% of the “yes” votes on the conference report, respectively. Notably, for the 2018 Farm Bill, more Democrats than Republican voted “yes” on the conference report, following the mid-term elections that resulted in Democrats retaking the House.

    Bottom line: accusations of “partisanship” threatening to “end the bipartisan coalition needed to pass a farm bill” generally falls on deaf ears as partisanship around the House version of the farm bill has become standard operating procedure, largely starting with the 2008 Farm Bill. Despite the rocky process in the House, the final version of the farm bill reported out of the conference between the House and Senate continues to be widely bipartisan.

    Figure 1.  Voting History on the Farm Bill, U.S. House of Representatives a/Passed by voice vote

    Farm BillMinority Party in HouseMinority Share of House SeatsMinority Share 
    of Yes Votes
    (House-Drafted Farm Bill)    		Minority Share 
    of Yes Votes
    (Conference Report)
    Food Security Act of 1985Republican42%35%40%
    Food, Agriculture, Conservation, and Trade Act of 1990Republican40%a/37%
    Federal Agriculture Improvement and Reform Act of 1996 Democrat47%20%33%
    Farm Security and Rural Investment Act of 2002Democrat49%48%49%
    Food, Conservation, and Energy Act of 2008Republican46%8%32%
    Agricultural Act of 2014Democrat46%0%35%
    Agriculture Improvement Act of 2018Democrat45%0%51%

    Fischer, Bart L., and Joe Outlaw. “Just How Bipartisan are Farm Bills?” Southern Ag Today 5(23.4). June 5, 2025. Permalink

  • Seasonal Movements of the Monthly December Corn Futures Price 

    Seasonal Movements of the Monthly December Corn Futures Price 

    Over the past 10 years the monthly average December corn futures contract price has peaked in June and declined through harvest (Figure 1). However, prices react differently each year. This article examines the December corn futures contract monthly average price from 2010 to 2024, for years when national average corn yield is above the predicted trendline (2014, 2015, 2016, 2017, 2018, 2021, and 2024) and below the predicted trendline (2010, 2011, 2012, 2013, 2019, 2020, 2022, and 2023). In years when the national average yield is above the trendline, the monthly average December corn futures price peaks in May and declines to September, before recovering at the end of the year. This trend can also be seen in 2024 (blue bars; Figure 1). In years when the national average yield was lower than trendline, average monthly December futures prices increased from May to October. May and June have historically been the months when December futures prices begin to move higher or lower. This is largely due to three factors: 1) confirmation of planted acreage (USDA June Planted Acreage report); 2) early season weather and crop conditions; and 3) increased accuracy for June-July yield forecasts. 

    Figure 1. Average Monthly December Corn Futures Price, 2024, 2025, 10-Year Average, Below Trendline and Above Trendline National Average Yield 

    Currently, 2025 USDA estimates for national corn acres planted are at 95.3 million acres (March Prospective Plantings report). The USDA will release the Acreage report on June 30th which will provide revised estimates. Due to beneficial planting conditions throughout a large portion of corn producing regions of the U.S. and a corn-to-soybean ratio that favors corn planting, many analysts are anticipating an increase in corn acres compared to current USDA estimates. 

    Weather has also been mostly favorable across the corn belt. On May 27th, the USDA estimated that 5% of corn production was in severe drought or worse, indicating most of the major production areas had average to favorable soil moisture conditions. This can change rapidly and in the recent past many states have experienced flash droughts that have reduced state level yield estimates later in the growing season. The May 31st 30-day NOAA precipitation forecast indicates average to above average precipitation for the corn belt, the Mississippi river portal and the southern seaboard. 

    Farmers concerned with downside futures price risk could consider purchasing a December put option at or out of the money to provide short term price protection. If futures prices move lower the put would provide a futures price floor. If futures prices start to trend higher, the put option could be sold and part of the put option premium recovered. Managing the downside futures price risk at key times in the production year can assist in removing risk and protecting against financial losses.     

    References and Resources:

    Barchart.com. December Corn Futures Price. https://www.barchart.com/futures/quotes/ZCZ25/overview.

    NOAA Climate Prediction Center. 30-Day Forecast. https://www.cpc.ncep.noaa.gov/products/predictions/30day/.

    USDA Ag in Drought. https://www.usda.gov/sites/default/files/documents/AgInDrought.pdf.

    USDA Prospective Planting Report. https://usda.library.cornell.edu/concern/publications/x633f100h.

    Smith, Aaron. “Seasonal Movements of the Monthly December Corn Futures Price.” Southern Ag Today 5(23.3). June 4, 2025. Permalink

  • Tallow and Lard

    Tallow and Lard

    It’s often said that everything is sold from cattle and hogs except the moo and oink.  These products include all the variety meats, hides, tendons, and anything else.  One category of these products that has been increasing in value is tallow, grease, and lard.  These can be edible or inedible.  Several factors have been important in increasing their values.  One is the renewable fuel market.  The increased demand for used cooking oil and animal fats to meet renewable standards has boosted prices.  On the edible side, recent trends in deep-frying foods and French fries in beef tallow have further boosted demand.  And it’s hard to make good biscuits or tamales without lard.

    USDA reports weekly prices for several types of these fats.  As you might expect for these types of products, prices are often not reported every week.  But what is reported can give us some insight into added values to cattle and hogs.

    Edible tallow, delivered to Chicago, was $58 per cwt for the week ending May 2nd compared to $49 per cwt the same week in 2024.  For the year-to-date, edible tallow has averaged $54.65 per cwt versus $51.82 per cwt last year.  While prices are generally higher than last year, tallow prices hit $92 per cwt in September of 2022.  A decade ago, edible tallow was about $30 per cwt.

    Choice, inedible white grease hit its high price for the year, $51 per cwt, in April.  It was $39 per cwt in April 2024.  Bleachable, inedible tallows have seen similar price increases compared to last year.  A decade ago, these products were about $26 per cwt.  

    While growing demand has certainly been a factor in rising prices, the supply side is also important.  Fed cattle weights have been increasing to record highs.  Increasing weights are mitigating tallow supply declines due to fewer head produced.  Heavier fed cattle weights have led to more yield grade 4s and 5s, resulting in more fat on the market.  While cattle are discounted in price if they fall into yield grade 4 and 5, the rising value of tallow helps to offset the lost value. Tallow, grease, and lard are a small portion of the total value of a carcass, but every little bit adds value to cattle and hogs.  

    Anderson, David. “Tallow and Lard.” Southern Ag Today 5(23.2). June 3, 2025. Permalink