Delmarva hauler doubts enough regional farmers will pay for excess litter under new environmental regs
By: Jeremy Cox, BayJournal.com(Republished)
Ray Ellis makes a living hauling chicken poop — tons of it, often across state lines.
He owns the largest manure transport company on the Delmarva Peninsula, a region with one of the highest concentrations of meat chickens in the country, with a capacity for 150 million birds.
In other words, if anyone stood to personally gain from a new regulation that would require more chicken farms to ship manure somewhere else, Ellis would be your guy.
An advisory committee gathered in December to recommend whether Maryland’s portion of the peninsula — and the rest of the state — should go forward with a measure that would do just that. The other option was to delay it for a year.
The 19-member group included farmers, environmentalists and, yes, Ray Ellis. Twelve members voted to urge the state to move ahead with the regulation. State Agriculture Secretary Joseph Bartenfelder decided to follow the committee’s recommendation.
Ellis was one of the five who voted against it. Here is why:
Ellis grew up in a small farming community called Willards on the lower Eastern Shore. His father was a carpenter; his mother ran grocery stores. Agriculture wasn’t part of his life until he met and married a farmer’s daughter.
In those days — the late 1980s and early ‘90s — it would take a crew of five to seven workers about four hours to clean out a chicken house between flocks. The floor becomes crusted over time with litter — a mixture of bird droppings, feathers and bedding material.
But with a skid loader, which resembles a miniature bulldozer, the job could be done by one worker in about an hour. Ellis decided to buy one, making him one of the few farmers in the region with such equipment at his disposal.
Soon, his phone started ringing with neighboring farmers asking to have their chicken houses cleaned — or “caked out,” as they call it. For a time, Ellis spread the manure as fertilizer on his corn and soybean farm in Millsboro, DE. But it didn’t take long until he was collecting more nutrients than his crops needed. So, he began selling it to other farmers for $4 per ton.
Like it or not, he was in the business of transporting chicken poop. “It’s a crappy business,” Ellis said. “Who wants to play in chicken manure every day?”
What began as a side gig slowly evolved into a full-time venture called Ellis Farms, Inc. The agribusiness giant, Perdue, opened a plant in the early 2000s in nearby Blades, DE, where it processed chicken manure into fertilizer pellets. With that, Ellis recalled, “People started asking, ‘Well how valuable is this manure I’m getting rid of?”
Perdue’s new operation translated into steady business for Ellis. Reflecting the newfound demand, his price for a ton of manure shot up to $10 within a year. Changes in farming drove his profits higher. In many cases, new poultry operations were constructed without any adjoining cropland. With nowhere to spread their manure, they called on Ellis’s services to keep their chicken houses clean.
Farmers who wanted to fertilize their crops with manure began paying Ellis $18–$21 per ton to truck it to them. His business quickly expanded. He bought several tractor-trailers and hired about 20 employees. Then came new regulations in Maryland limiting how much manure farmers could apply to their fields.
Decades of heavy use had saturated thousands of acres on the Eastern Shore with phosphorus. Multiple studies showed links between nutrients washing off the region’s farms and algae blooms growing in the Chesapeake Bay. When they die off, those blooms rob the water of oxygen, creating massive “dead zones” that kill any marine life that can’t escape.
Ellis’ phone was constantly ringing with farmers looking to offload manure because they could no longer spread it as free on their own land.
But the biggest game-changer was yet to come. In 2015, Maryland adopted the Phosphorus Management Tool, which restricts or bans the application of phosphorus on fields, depending on its existing concentration in the soil and the likelihood it will pollute the Bay.
Regulators phased in the program, starting with the fields with the highest phosphorus concentrations. But it pushed Ellis’ business to a tipping point. As more farmers signed on to have their manure trucked away, it strained the supply of those willing to use it in their fields.
Just to find takers, Ellis began hauling manure as far as Pennsylvania, where it was used as fertilizer on mushroom farms. As his customers dwindled last year, he asked the Maryland Department of Agriculture for a list of potential recipients.
The state gave him 10 names, he said. But most would only receive shipments in the spring during the planting season or they would take it but not pay for it.
“I’m the largest broker on Delmarva,” Ellis said. “No one’s calling me” to buy manure. The annual amount of manure handled by his company has plummeted from a peak of 250,000 tons to 100,000 tons, he said. He blames part of that difference on the emergence of competition from other trucking companies in the market, but it’s mostly because of the tighter nutrient regulations, Ellis said.
Meanwhile, the state was moving forward with the next phase of the tool’s implementation, expanding the phosphorus restrictions from 65,000 acres on 350 farms to 228,000 acres on 1,600 farms.
A state-commissioned study released in December concluded that the state lacks the funding and trucking infrastructure to handle the extra manure.
“There’s going to be a need for new equipment and new drivers to transport this,” said Salisbury University economics expert Memo Diriker, the study’s author. “With that much more manure that’s going to have to leave The Shore, or at least that high [phosphorus] value acreage where it cannot be spread, you’re going to have to transport it out of the region.”
The scenario puts hauling companies in a difficult financial spot, he added. The industry will need to invest in 10–20 trucks at a cost of $80,000-$120,000 per unit, Diriker said. But new alternatives, such as facilities that heat the manure to create electricity, could come online over the next several years, reducing the need for it to be transported.
“People like Ray bought this equipment to take these things all the way up to Pennsylvania and then there’s suddenly no need to take them,” said Diriker, adding that the state may wish to consider subsidizing the companies for such costs.
Diriker’s report also suggests subsidies to cover higher transportation costs because of an expectation that the manure will have to be trucked still farther away to find willing buyers.
For Ellis, the Salisbury report confirmed his fears about the next phase of the phosphorus regulation.
“If anybody should be voting for it, it should be me because I’m going to get paid for moving it,” he said.
Ultimately, he didn’t. The transportation industry isn’t ready to absorb the new supply of manure, especially when demand for the product is so low, he said.
He blames fellow industry members for bowing to political pressure to advance the regulation. The future, as he sees it, isn’t pretty and smells worse.
“We’re going to have manure running out of the sheds and piling up on the farms,” he said, “and that’s when you’re going to have a nightmare.”