Differences between Livestock and Crop Producers' Participation in Nutrient Trading

Descriptions of agricultural producers' participation in nutrient trading schemes generally refer to crop producers reducing nutrient run-off from fields to generate credits. However, livestock producers may participate differently than crop producers because some are regulated as Concentrated Animal Feeding Operations (CAFOs), and because agricultural producers generating manure face different costs of reducing nutrient application (and therefore generating credits) from those only using fertilizer. These differences may affect nutrient reduction credit prices and the supply of agriculturally supplied credits, thereby raising the costs to non-agricultural operations of meeting water quality goals. We examine how CAFO laws interact with nutrient trading requirements. We model trading participation by farm type and then simulate trading participation by applying the model to 2007 Census of Agriculture data. Copyright 2013, Oxford University Press.