Hog Manure Moves From Liability to Ledger Asset as 2027 Margin Risk Looms

Walt and Shelli Traudt have run commercial synthetic fertilizer completely off their row crop operation since 2015 — replaced end to end by hog manure from the contract-finishing barns they added near Clay Center, Neb. That substitution, according to the operation's track record on irrigated ground and dryland pivot corners, has cut input costs while rebuilding soil health.

Their story frames the argument now facing U.S. hog producers heading into 2027: near-term profits look attainable, but deeper into that year, the picture darkens. The industry's light at the end of the tunnel, one analyst puts it, could be "a flicker of hope or the headlamp of a 200-ton locomotive barreling down on you."

What does manure pricing change for margins?

Plenty. Swine manure no longer sits as a disposal cost producers couldn't give away. It now earns its own column on the asset side of the ledger. With commercial synthetic fertilizer prices still pressuring crop budgets, the advice is direct: negotiate manure agreements for the upcoming year now, and make sure the price reflects real nutrient value. Crop producers swapping synthetic product for what the piece calls "commercial natural fertilizer" need replacement nutrients anyway. Hog producers who underprice their liquid nutrients leave margin in the field — literally.

For the Traudts, the logic ran the other direction. They added contract pork production to an existing row crop farm in 2015 specifically to capture the manure value, then applied it across irrigated acres and dryland pivot corners. Soil health improved. Fertility spend dropped.

Can dairy-style digesters work for pigs?

The dairy industry has answered that question for decades. At a Lake Benton, Minn., dairy open house held a year ago, the demonstrated technology converts manure from a 2,100-head Holstein herd into renewable natural gas via a methane digester.

Hogs are now getting their own proof point. Near Ellendale, Minn., Swinergy has launched its first commercial project, sited on the Matt and Erin Holland farm. The system converts livestock manure and other organic materials into biogas that can be processed into renewable natural gas, while supporting improved manure management and environmental performance.

Two revenue plays, one asset. Sell the nutrients to neighboring crop growers. Or capture the energy stream from what's already flowing under the barns.

Why the timing matters

Hog production runs on a continuous harvest cycle, unlike crop farming, so the calendar flip carries no agronomic meaning. But year-end is when producers audit the operation — and when the 2027 risk comes into focus. If business as usual isn't cutting it, the exit isn't necessarily out of hog production. It may mean widening the view of what the operation sells: pork, nutrients, and potentially energy.

The Ellendale digester and the Clay Center manure program both point the same direction. Producers who price manure aggressively in this year's fertilizer-market negotiations, and who run the numbers on biogas conversion while the technology proves out in Minnesota, enter 2027 with more than one line of income working against whatever that locomotive turns out to be.