Author: Jordan Shockley

Forest-based carbon programs are gaining momentum and offer opportunities for woodland owners in the Southeast to receive payment for sequestering carbon. While many carbon programs in agriculture have focused on generating carbon credits in row crop production, most verified carbon credits in global registries were generated from forest-based carbon projects. However, family forest owners have had limited access to such programs until now. Across the Southeast, there is an average of 16.5 million acres of forest land per state, of which an average of 85% is privately owned. Figures 1 and 2 illustrate total forest land and the percent privately owned for each state in the Southeast. Offering carbon programs to family forest owners provides ample opportunities to generate carbon credits from previously untapped resources. Two forest-based carbon programs of interest to woodland owners are The Natural Capital Exchange (NCX) and the Family Forest Carbon Program (FFCP). NCX and FFCP programs differ in a number of ways, including contract length and forest management approaches. For example, NCX offers a one-year harvest deferment contract, while FFCP is a long-term contract that pays for implementing forest management practices. Before enrolling, it is crucial to understand the differences between the two programs. Visit their respective websites for more information. Furthermore, ask questions, read the fine print, and consult with a lawyer to ensure the carbon program is right for you.  

Figure 1. Total forest land by state in the Southeast

Figure 2. Percent of forest land privately owned by state in the Southeast 

Shockley, Jordan. “Carbon Program Opportunities for Woodland Owners in the Southeast“. Southern Ag Today 2(41.3). October 5, 2022. Permalink

As high path avian influenza (HPAI) spreads rapidly across the U.S., the on-farm financial ramification of an infection in a commercial poultry flock can be catastrophic.  This article is a follow-up to the recent Southern Ag Today article posted on March 29^th, 2022, titled “The Cost of Avian Influenza to the Southeastern Broiler Industry.”  That article highlights that as of March 21^st, 2022, there were 11,901,888 commercial birds destroyed due to HPAI.  Fifteen days later, that number has nearly doubled (22,851,072 as of April 5^th, 2022).  While the continued outbreaks of HPAI have been mainly in commercial turkey and layer flocks, commercial broiler flocks are not immune to outbreaks.  

Understanding the financial implications of contracting HPAI in a commercial broiler flock is critical and will hopefully highlight the importance of strict adherence to biosecurity measures. While the federal government provides financial aid to a grower for depopulation, cleaning and disinfecting, indemnity payments are only for the birds infected with HPAI.  It is important to note that the contract grower is not guaranteed 100% of the indemnity payment, as a portion can be distributed to the owner/integrator.  There is also no financial assistance provided for future loss of production while the contaminated area is cleared of the virus.  This timeframe could last more than 120 days and has lasting financial implications.  For example, the HPAI outbreak in a 12-house broiler operation in Kentucky in early February 2022 is not expected to receive new placements until August 2022.  A +120-day loss of operation could mean the producer loses income associated with 2-3 broiler flocks but still has the expenses of maintaining the facilities and making any payments on debts related to the operation.  With the lack of financial support from the federal government for future losses and no private insurance options, the farm-level financial impact of contracting HPAI is significant.  

We examined the financial impact of contracting HPAI in a standard four broiler house (43 ft. x 600 ft.) operation in Kentucky with 32,300 broilers per house, a 56-day grow-out period, and 17 days to clean between flocks.  The loss in net farm income from contracting HPAI was $46,512, $97,658, and $158,348 for the loss of one, two, and three flocks, respectively.  This loss in net farm income could also be interpreted as the on-farm equity required to self-insure the operation from HPAI.  Therefore, early adoption of biosecurity measures is imperative as a financial risk mitigation method for a disease outbreak like HPAI.  Producers should also consider how they would manage this type of risk, should they be forced to deal with it.  

References:

Brothers, Dennis. “The Cost of Avian Influenza to the Southeastern Broiler Industry”. Southern Ag Today. March 29, 2022. Available online: https://southernagtoday.uada.edu/the-cost-of-avian-influenza-to-the-southeastern-broiler-industry/

USDA-APHIS. “The HPAI Indemnity and Compensation Process”. Available online: https://www.aphis.usda.gov/publications/animal_health/2016/hpai-indemnity.pdf

Shockley, J.M., T. Mark, K. Burdine, and L. Russell.  “Financial Implications from Contracting Avian Influenza in a U.S. Broiler Operation”. Journal of Applied Farm Economics 3, no. 1 (Spring 2020). Available Online: https://docs.lib.purdue.edu/cgi/viewcontent.cgi?article=1034&context=jafe

Shockley, Jordan. “On-Farm Cost of Contracting High Path Avian Influenza in a Commercial Broiler Flock“. Southern Ag Today 2(16.3). April 13, 2022. Permalink

According to USDA-NASS, the southern region accounts for over 75% of the broiler production in the United States.  This provides an excellent opportunity for row crop producers to utilize broiler litter as an alternative to commercial fertilizer.  With commercial fertilizers reaching record prices and broiler litter abundantly available, understanding the economic value of broiler litter going into the 2022 growing season is critical for making nutrient management decisions.  The value of broiler litter will vary greatly depending on management practices (when applied, how it is applied, and to what crop), nutrient content of the litter, soil test data, and commercial fertilizer prices. 

Spring application right before a light rain or incorporating after application maximizes plant-available nutrients resulting in the maximum economic value of broiler litter.  However, buyers who do not measure litter for nutrient content before an application can face economic and environmental risks.  Unlike commercial fertilizer, broiler litter will vary in nutrient content depending on the timing and length between cleanout, type of cleanout (de-crusting or full), in-house litter management, bedding material, and feed mix differences between broiler companies.  Over 700 broiler litter samples submitted for analysis were evaluated to look at the range of nutrient content.  Like soil samples, broiler litter samples are sent to labs for nutrient analysis and, in this case, the University of Kentucky Regulatory Services for analysis.  Table 1 provides the statistics for the broiler litter samples that were assessed.   The average nutrient content of broiler litter was 50 lbs of nitrogen (N), 56 lbs of phosphorous (P₂O₅), and 47 lbs of potassium (K₂O) per ton of broiler litter.  For spring application of broiler litter, 50% N, 80% P₂O₅, and 100% K₂O of the nutrients are plant available.  Therefore, the nutrients available to the crop from an average ton of broiler litter would be 20 lbs of N, 45 lbs of P₂O₅, and 47 lbs of K₂O.  

With current fertilizer prices of $899/ton for Urea ($0.98/lb N), $834/ton for DAP ($0.52/lb P₂O₅), and $800/ton for potash ($0.67/lb K₂O), the average expected value of broiler litter is $80/ton.  Therefore, if you can buy broiler litter and have it delivered and spread for less than $80/ton this Spring, broiler litter is a better economic option than commercial fertilizer.  Last year, with lower fertilizer prices, the nutrient value of an average ton of broiler litter was $48/ton.  But remember, broiler litter nutrient content will vary (see max and min values in Table 1).  Figure 1 applies current fertilizer prices to each broiler litter sample submitted for analysis to illustrate the range and frequency in the value of a ton of broiler litter.  Given the wide range in value, make sure you measure broiler litter for nutrient content to understand what you are receiving and avoid the risk of overpaying for broiler litter. 

Table 1. Sample statistics for the nutrient content of broiler litter samples (n=740)

	N (lbs/ton of litter)	P2O5 (lbs/ton of litter)	K2O (lbs/ton litter)
Average	50	56	47
Minimum	7	4	2
Maximum	186	124	109

Figure 1. Variation in value of broiler litter samples given current commercial fertilizer prices and 50% N, 80%P2O5, and 100% K2O plant available nutrients (n=740)

Shockley, Jordan. “What is the Current Nutrient Value of Broiler Litter?“. Southern Ag Today 2(8.3). February 16, 2022. Permalink

The emergence of developing carbon markets and programs aimed at the agriculture sector have provided farmers with the opportunity to receive payments for adopting management practices that reduce greenhouse gas emissions.  The United States Environmental Protection Agency (EPA) estimates that over half of the greenhouse gases emitted in the agriculture sector come from soil management (Figure 1).  Therefore, most carbon programs in the agricultural sector provide payments to farmers who generate carbon credits by adopting no-till or conservation tillage practices or cover crops.  The majority of current carbon programs require the concept of additionality; meaning they will only pay for new (added) carbon-sequestering practices.  Therefore, if you were an early adopter of conservation practices like no-till or cover crops and are standard practices on your farm, today you are not eligible to enroll those acres in most carbon programs.  Current contracts offer farmers a range from $15-$20 per ton of carbon sequestered, but capacity to sequester (tons/acre) and the conservation practices adopted will vary by individual farm.  It is essential to understand the costs and risks of implementing new practices and critically compare those to the potential benefits before enrolling in any carbon market program.  Furthermore, due to the complexity and nuances of current carbon market programs, it is recommended you seek legal advice before entering into any contract.

Figure 1. Percent of U.S. greenhouse gas emissions from agriculture activities (source: U.S. EPA Inventory of Greenhouse Gas Emissions)

Shockley, Jordan. “Adopting Farm Management Practices for Carbon Credit Payments?”. Southern Ag Today 1(42.3). October 13, 2021. Permalink