More than three billion tonnes of waste, including manure and urine, are produced by farm animals each year. This vast volume exceeds that of all other types of waste, yet it receives little attention from meat producers and investors. In China, an analysis published in 2022 found a near-perfect 0.87 correlation between livestock density and nitrogen loss to water. Research elsewhere has also shown strong correlations, such as in the Cape Fear river basin in North Carolina—the US’ second largest state for pig production. Regions with the densest livestock production tend to be most at risk of coastal eutrophication.
Manure represents a precious store of nitrogen and phosphorus fertiliser. However, its application is made complex by uneven nutrient loads, limited spreading windows and large liquid contents. With increasingly concentrated livestock production, this means that prices are as low as $12 to $20 per thousand litres in the US, assuming a regular 10,000-litre spreader tank capacity. This revenue covers neither the depreciation of storage and treatment facilities nor the transportation expenses. As a result, manure is routinely treated as a waste product as opposed to a valuable fertiliser. It is rarely transported more than a few kilometres to be spread on crops, thus failing to reach regions where livestock is sparse.
As well as targeting ten publicly listed pork and chicken producers with material shares in their respective markets, this engagement will also target two fertiliser companies whose range of services includes the extraction and marketing of nutrients from manure.
The biogas boom resolves neither the climate nor the biodiversity impacts of manure. Government and carbon-market incentives toward methane capture are driving more investment in biodigesters to mitigate the climate impact of manure, but these fail to address nitrous oxide (N2O), a greenhouse gas that is 273 times more potent than CO2 on a 100-year basis. Also, livestock excretions account for 53% of N2O emissions globally.
Consequently, methane capture still leaves protein producers exposed to climate risk, which is concerning when subsidies are generous enough to drive the expansion of livestock headcounts. Furthermore, it does not solve the problem of solid and liquid waste driving biodiversity loss and community health issues by polluting soil, water and air.
The impacts are nature-wide but investors can have a role in managing this risk. As with most drivers of biodiversity loss, manure management is found to overlap with climate change. Its impacts on water and air quality affect biodiversity, but also the health of local communities, leading to sizeable lawsuits and several examples of community opposition to farm expansion.
For investors and policymakers, manure mismanagement serves as a precursor to multiple ESG risks and is emblematic of unsustainable business practices.
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