Asymmetric Willingness-to-Pay Distributions for Livestock Manure

The Environmental Protection Agency's new Concentrated Animal Feeding Operations (CAFO) regulations are forcing some farms to export livestock manure to off-farm acres. The regulation compliance cost depends on the willingness of neighboring crop producers to accept or pay for the manure. This study estimates a manure willingness-to-pay distribution for crop producers using a contingent valuation mail survey. A flexible parametric distribution is borrowed from the crop yield literature, which shows that manure willingness to pay is left-skewed. Most crop producers in our sample will pay a positive price close to the savings in commercial fertilizer, but approximately 25% require a payment before accepting manure.
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Citation

Norwood, F. Bailey; Luter, Ryan L.; Massey, Raymond E., Asymmetric Willingness-to-Pay Distributions for Livestock Manure, Journal of Agricultural and Resource Economics, Volume 30, Issue 3, December 2005, Pages 431–448

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