Duck Creek Watershed, Texas Overview :: Research :: << Results >> :: Summary :: Papers Results and Discussion   Expansion Scenarios   Economic Impact (Robertson County) The economic impact of broiler industry expansion is calculated at the county rather than the watershed level because a county is a larger and more appropriate geographical area for estimation of economic impacts. For year 2000, it was estimated that the broiler industry in Robertson County directly contributed $1,715,000 of added value. Another $988,000 of added value was estimated to have been generated from indirect and induced business activity related to broiler production. An estimated 47 jobs were generated directly within the broiler industry while another 47 jobs were created as a result of indirect and induced economic activity. At 2000 levels, the broiler industry was estimated to have constituted 0.9 percent of total economic activity in Robertson County and 1.4 percent of jobs in the county. A change in the direct impact is the additional income (value added) directly contributed by an assumed expansion of the broiler industry. Change in total impact includes changes in the estimated indirect and induced effects related to an expansion in broiler production, in addition to the change in the direct impact. A doubling of the broiler industry would produce an estimated additional $2.7 million of economic activity in the county and produce an estimated 94 additional jobs. Production at 6.1 times 2000 levels would produce an estimated additional $13.6 million in economic activity while producing an additional 478 jobs. At this level of expansion, the broiler industry would account for an estimated 5.4 percent of county economic activity, and 8.2 percent of county jobs. Table 1: Changes in Economic Activity Resulting from Broiler Industry Expansion Economic Measure Expansion factor (Baseline = 1X) 0X 1X 1.2X 2X 2.3X 6.1X Economic Activity             Change in direct impact ($1,000) ($1,715) $0 $368 $1,715 $2,165 $8,613 Change in total impact ($1,000) ($2,702) $0 $580 $2,702 $3,411 $13,572 Percent of county economic activity 0.0% 0.9% 1.1% 1.9% 2.1% 5.4% Jobs             Change in direct effect (jobs) -47 0 10 47 59 238 Change in total Impact (jobs) -94 0 20 94 119 478 Percent of county jobs 0.0% 1.4% 1.7% 2.8% 3.2% 8.2% Note: Numbers in parentheses indicate negative values. Environmental Impact Expanding litter application in the watershed would also have environmental consequences. There is tremendous variation in annual nutrient and sediment loads depending largely on the amount, timing, and intensity of rainfall events.  When these variations are averaged out over multiple years, trends in nutrient and sediments loads can be seen.  The past 30 years of weather history was simulated for each expansion scenario. Soluble and organic P increase substantially for expansion scenarios. In-stream soluble and organic P loads more than double from year 2000 levels for the simulated 6.1X scenario. Table 2 Changes in Ambient Loads Resulting from Industry Expansion   Expansion Factor (Baseline = 1X) 0X 1X 1.2X 2X 2.3X 6.1X Ambient Loads (kg)             Soluble P 6,850 7,715 7,881 8,431 8,604 15,750 Organic P 13,070 14,880 15,230 16,150 16,410 30,370 Total P 19,920 22,595 23,111 24,581 25,014 46,120 Percent Change in Ambient Loads from Baseline             Soluble P -11.2 0.0 2.2 9.3 11.5 104.1 Organic P -12.2 0.0 2.4 8.5 10.3 104.1 Total P -11.8 0.0 2.3 8.8 10.7 104.1 BMP Scenarios BMP scenarios simulate the application of specified BMPs to the N rate (6.1X) scenario that serves as the BMP baseline. BMP Costs For scenarios involving a change in the amount of litter applied (P rate, double P rate, and haul-off scenarios) the net cost of a scenario involves the additional cost of commercial fertilizer and its required application to substitute for reduced application of litter. For the phytase and alum scenarios, product cost is the most important component of total cost; these scenarios also produce quantifiable benefits.  Costs of Additional Fertilizer The BMP baseline (N rate) scenario simulates application of litter that supply the N crop requirement to pastures and hay fields, which supplies levels of P and K in excess of crop requirements. Application of litter at less than the N rate requires application of commercial N and sometimes K in order to meet crop needs.  For the P rate and double P rate scenarios, this analysis assumes commercial N and K supplement litter application to achieve the same N and K application rates as commercially fertilized land.  The haul-off scenarios assume that litter is totally replaced by commercial N, P, and K fertilizer at rates observed in 2000. Substituting commercial fertilizer N, P, and K for litter nutrients results in net per acre costs to pasture and hay operations as depicted in Table 3. Table 3: Fertilizer Prices, Application Rates, and Total Per Acre Fertilizer Expense for BMP Scenarios for Representative Pasture and Hay Operation Annual Fertilizer Expense Baseline Fertilizer Price Alum Amend. Fert. Price         Total Cost BMP Cost BMP Scenario ($/acre) ($/acre) Hay operations       Baseline (N rate) 65.49     Alum 65.49 0.00   Double P rate 69.49 4.00   P rate 74.54 9.05   Hauloff 98.19 32.70 Pasture operations       Baseline (N rate), double P rate, P rate (hayed) 5.82     Alum 5.82 0.00   P Rate (not hayed) 6.49 0.67   Hauloff 11.41 5.59 Phytase Costs and Benefits Table 4 presents estimated cost and savings for a phytase supplemented broiler diet.  The literature reports a range of rates for which phytase can be substituted for non-phytate P sources. One gram of Natuphos® phytase contains 5,000 units and the product can be purchased for $14.95 per kilogram.  Given this cost and application rate, one ton of feed can be treated for $1.36. Utilizing phytase feed allows levels of dietary phosphorus to be reduced, resulting in cost savings.  Dietary P in broiler diets can be reduced by two pounds per ton of phytase treated feed, allowing a reduction of mono-dicalcium phosphate of 9.5 lb.  At an assumed price of $370/ton, reduction in mono-dicalcium phosphate in broiler feed results in savings of $1.76/ton feed. The amortized cost of spray equipment was estimated at $0.05/ton feed. Savings, then, of supplementing broiler feed with phytase exceed costs by $0.35 per ton. For production levels assumed for this analysis, broiler production for one broiler house requires an estimated 783 tons of feed annually. Savings resulting from phytase supplementation of feed was estimated at $274 annually per broiler house. Table 4: Annual Cost and Savings for a Phytase Supplemented Diet Per Ton Analysis     Savings from reduced requirement $1.76   Cost of Natuphos phytase $1.36   Savings from feed ingredients in phytase reformulation $0.40   Cost of spray equipment $0.05   Net per ton savings $0.35 Broiler House Analysis     Feed required for broiler growth (tons/house/yr) 783   Net savings per broiler house (yr) $274 Alum Costs and Benefits In addition to providing environmental benefits, application of alum to litter has been shown to be effective in controlling ammonia levels in laboratory experiments and in broiler houses. The benefits of controlling ammonia levels in broiler houses include higher nitrogen levels in litter, reduced heating and ventilating expense for growers, increased chicken weight gains, and reduced mortality. Grower costs for alum application are comprised of the delivered price of alum and the extra labor required for its application. Grower benefits include reduced electricity and natural gas expense and higher payments based in increased bird weights and lower mortality.  Despite these substantial benefits, grower costs are estimated to outweigh benefits by $2,625 per house annually. The integrator, however, also benefits from alum treatment due to a lower feed conversion ratio and lower mortality, which result in lower feed expense and a greater quantity of chicken. We estimate that the integrator would experience net benefits of approximately $3,600 per alum treated house annually. The combined benefit for both grower and integrator nets to about $1,000 annually per broiler house. Table 5: Annual Costs and Benefits of Alum Litter Treatment Per Broiler House Integrator net benefits $3,608 Grower net costs $2,625 Net benefits (grower & integrator) $982 BMP Costs and Benefits for Representative Farm Operations and the Watershed Information presented in Tables 3-5 was aggregated to estimate annual BMP costs for representative pasture, hay, and broiler operations, for the broiler integrator, and for the entire watershed. Results are presented in Table 6. Table 6 indicates that the users of broiler litter (hay and pasture operations) incur the cost of implementing the double P rate, P rate, and hauloff scenarios. These costs result from the substitution of commercial fertilizer nutrients for litter nutrients and are due to the higher cost of commercial nutrients. Table 6: Annual Costs (Benefits) of Implementing BMP Scenarios for Representative Operations, Broiler Integrator, and Duck Creek Watershed ($) BMP Scenario Representative Operation Broiler Integrator Duck Creek Watershed Pasture Hay Broiler Double P rate 0 300     26,426 P rate 70 679     69,309 Hauloff of cleanout litter 587 340   109,871 Complete haulout 839 2,452     330,229 Phytase addition to feed       (86,603) (86,603) Alum addition to litter     10,501 (1,139,414) (310,278) Note: Numbers in parentheses indicate negative values. This analysis indicates that substantial financial benefits accrue with the use of phytase in broiler diets, which were estimated at about $87,000 at the watershed level. These benefits result from reduced feed costs, since the cost of phytase is more than compensated for by lower supplemental dietary P requirements in broiler diets. The broiler integrator is here assumed to accrue all the benefits of phytase addition because the integrator controls and pays for the feed milling and feed ration formulation processes. The addition of alum to broiler litter provides an interesting situation where broiler operators would incur net costs, assuming they were responsible for its purchase and application. Although the grower would benefit from greater production, reduced mortality, and reduced electricity (fans) and heating expense, the cost of alum and its application would more than offset these advantages, resulting in net costs of $10,500 for a representative broiler operation. The poultry integrator, however, would substantially benefit from higher feed efficiency, greater production, and reduced mortality rates. When the costs and benefits experienced by broiler growers and the integrator are aggregated, net benefits of $310,000 accrue at the watershed level. Environmental Measures  As depicted in Figure 1, all BMP scenarios result in reduced levels of soluble and organic P loads at the mouth of Duck Creek watershed. The relative magnitudes of these reductions are consistent with expectations. Sediment and NO3 loads (not shown) exhibit very little variation across BMP scenarios. P loads, however, are progressively reduced moving from the N rate baseline, to the double P rate, to the P rate, to the haul-off of cleanout litter, to the complete haul-off. A simulated complete haul-off of litter resulted in a 57 percent reduction of soluble P load.  Phytase addition to feed yields a 13 percent reduction in soluble P loads while the alum scenario results in a 60 percent reduction in soluble P.  Simulated organic P loads for all scenarios are approximately twice the levels of soluble P loads.   Cost Effectiveness Analysis Cost effectiveness ratios indicate the cost of achieving a one unit change in water quality. Cost effectiveness ratios were calculated for soluble and total P reduction for the six BMPs considered. Cost effectiveness ratios are higher (less cost-effective) for haul-off scenarios than for reduced rate scenarios, because more litter nutrients must be replaced by commercial fertilizer nutrients per acre of land. Because the phytase and alum BMPs produce net economic benefits, their cost effectiveness ratios are negative.  Both amendment BMPs produce cost effectiveness ratios of similar magnitude.  The alum scenario, however, produces about 4.5 times the reduction of soluble P and about three times the reduction on total P as the phytase scenario. In sum, for a given reduction in ambient P, haul-off scenarios are roughly four times more expensive to implement than P rate scenarios, while the phytase and alum scenarios produce net economic benefits. Table 7: Cost-Effectiveness Ratios for Phosphorus BMPs Rates Hauloff Amendments Double P P Cleanout Complete Phytase Alum Total cost (watershed) $26,424 $69,306 $110,313 $333,896 ($86,603) ($310,278) Reduction in Ambient P Load             Soluble P (kg) 5,400 7,685 7,869 8,900 2,070 9,403 Total P (kg) 16,020 22,085 23,009 26,200 7,740 24,543 Cost Effectiveness Ratio             Soluble P ($/kg removed) 4.89 9.02 14.02 37.52 (41.84) (33.00) Total P ($/kg removed) 1.65 3.14 4.79 12.74 (11.19) (12.64) Note: Numbers in parentheses indicate negative values.   Overview :: Research :: << Results >> :: Summary :: Papers

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2002 Texas Institute for Applied Environmental Research