MSU Agricultural, Food, and Resource Economics
Dissertations, Theses and Plan B Papers -- Abstract
, James Donald. A Managerial Perspective of the Likely Economic Benefits and Costs of Environmental Regulations to the Michigan Dairy Industry
Major Professor: Connor.
Agricultural trends toward fewer dairy products and larger herds have increased
the concentration of animal manure on Michigan farmland. The financial burden
of internalizing the costs of externalities such as pollution from livestock
operations may be placed solely on farmers. This study explores the financial
obstacles and opportunities facing Michigan dairy managers as they seek to profitably
comply with increasingly strict manure mangement standards. Representative dairy
farms are developed and a whole farm budgeting program is employed to assess
the impacts (investment costs, labor requirements, nutrient savings, debt considerations,
etc.) Of compliance with possible regulations on these farms. Investment in manure
storage facilities is found to yield a negative return of 2.9 to 6.6 percent.
Impacts for dairy farms of complying with long-term storage plus injection regulations
is estimated under strict assumptions: profitability of 60 and 120 cow herds
would decline by $1700 and $9900 per year and aggregate capital investment for
the Michigan dairy industry would be $112 million.