SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

APPENDIX C 

COMPLIANCE COSTS AND COST EFFECTIVENESS ANALYSIS FOR 

REVISED PROPOSED AMENDMENTS TO RULE 4570 

(CONFINED ANIMAL FACILITIES) 

October 21, 2010 

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Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

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Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

APPENDIX C 

COSTS AND COST EFFECTIVENESS ANALYSIS 

I. SUMMARY 

Cost effectiveness is the change in capital and operating costs between the current rule 

and the draft rule divided by the estimated emission reductions associated with the 

change. For this rule project, the changes to the regulatory thresholds will cause 

sources that are currently exempt from the rule to become subject to the rule. 

Additionally, for certain CAFs already subject to the rule, there are changes in the 

management practices that would result in additional compliance costs. Table 1 

summarizes the estimated total compliance costs for each type of CAF. Details of the 

calculations are discussed later in this appendix. 

Table 1 – Estimated Compliance Costs and Cost Effectiveness by CAF Type 

CAF Type 

Annual Cost 

($/yr) 

Estimated 2012 

Emission 

Reductions (tpy) 

Cost Effectiveness 

($/ton VOC 

reduced) 

Dairy $61,312,210 9,158 $6,695 

Beef Feedlot $0 0 not affected

Other Cattle $0 0 not affected

Swine $0 0 not affected

Poultry $274,000 51.1 $5,362 

Other, not listed 

above $0 0 not affected

Total $61,586,210 9,209 $6,688 

II. REQUIREMENTS OF ANALYSIS 

The California Health and Safety Code 40920.6(a) requires an air district conduct both 

an absolute cost effectiveness analysis and an incremental cost effectiveness analysis 

of available emission control options before adopting each Best Available Retrofit 

Control Technology (BARCT) rule. The purpose of conducting a cost effectiveness 

analysis is to evaluate the economic reasonableness of the pollution control measure or 

rule. The analysis also serves as a guideline in developing the control requirements of 

a rule. 

Absolute cost effectiveness of a control technology is the added annual compliance cost 

in dollars per year divided by the emission reduction achieved in tons of VOC reduced 

per year. This report presents the District staff's analysis of both the absolute and 

incremental cost effectiveness of proposed amendments to Rule 4570. 

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SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

Incremental cost effectiveness is intended to measure the change in costs, in dollars 

per year, and emissions reductions, in tons of VOC reduced per year, between two 

progressively more effective control technologies. Incremental cost effectiveness 

compares the differences in costs and the differences in emissions reductions of the two 

candidate control technologies. Incremental cost effectiveness does not reveal the 

emission reduction potential of the control technologies, merely the additional cost of 

adding the next most effective control to a given control measure. Unlike the absolute 

cost effective analysis that identifies the control technology with the greatest emission 

reduction; incremental cost effectiveness does not present a meaningful correlation 

between emissions reductions and cost effectiveness. Therefore, the relative values 

produced in the incremental cost effectiveness analysis and the absolute cost 

effectiveness values are not comparable and cannot be evaluated using similar 

standards. 

III. ANNUAL COMPLIANCE COST METHODOLOGY AND RESULTS 

Absolute cost effectiveness is the total annual compliance costs divided by the 

estimated emission reductions. In order to calculate the cost effectiveness, District staff 

must first estimate the compliance costs and the associated emission reductions. The 

emission reductions calculations are detailed in Appendix B of this staff report. This 

section of Appendix C outlines the estimated compliance costs for each type of CAF 

affected by the proposed amendments to Rule 4570. 

Rule 4570 allows operators to implement a combination of mandatory measures and 

choose additional requirements from a table. For the additional measures, District staff 

selected the mitigation measures that are most likely to be chosen by operators and 

evaluated the compliance costs associated with implementing the preferred mitigation 

measures. In choosing the measures, District staff expects that operators would elect 

to put in place only those measures that are least costly to execute. 

In general, implementing mitigation measures is a function of labor costs and, 

depending on the measure, there may be equipment that needs to be purchased. 

Therefore, implementing mitigation measures is a function of the labor hours to perform 

the measures and the cost of equipment, annualized over the life of the equipment. 

District staff estimated that labor cost was $19.00 per hour and represents the wages 

and overhead for a typical CAF employee as determined from the Employment 

Development Department (EDD). For some of the chosen mitigation measures, there is 

no cost associated with implementing the measure because it can easily be 

incorporated into current practices. 

 C-4 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

IV. COMPLIANCE COSTS FOR INDIVIDUAL MITIGATION MEASURES 

The following paragraphs outline the costs for individual mitigation measures and 

estimate what fraction of dairies will be implementing the mitigation measures. 

A. Dairy CAF Compliance Costs 

Dairy CAF compliance costs affect two different dairy populations. Because District 

staff is proposing that the regulatory threshold for dairies be reduced from 1,000 milking 

cows to 500 milking cows, there will be dairies that will be required to institute mitigation 

measures that are not currently required to do so. These dairies have between 500 and 

999 milking cows and are defined in the rule as medium dairies. In order to 

conservatively estimate the costs, it will be expected that the same percentage of 

medium size dairies as the large dairies is currently implementing certain measures. 

The second affected group is those already subject to the rule’s control provisions. 

District staff is proposing that these dairies increase the frequency that certain control 

measures are performed. The following paragraphs outline the methodology used to 

estimate costs and present the results of the analysis. 

1. Compliance Costs for Dairy Feed Menu 

Feed to NRC Guidelines

Based on information obtained from a local dairyman and a dairy industry 

representative, the average cost for a nutritionist required to provide proper guidelines 

on NRC feeding is $1,200 per month. This cost is for a typical/average dairy. The 

District projects that by 2012 the average number of cows per dairy in the valley will be 

1,277. Based on this information, the cost per cow per year for the services of a 

nutritionist is $12/cow/yr. Statistics from the District’s permits database (PAS) were 

used to estimate the percentage of facilities already performing this measure. Based on 

these statistics, 14% of all dairies are currently implementing this measure, so the 

annual cost per cow is adjusted to $10.32. 

However, this cost may be slightly lower than the actual cost of the measure because it 

considers only the services of the nutritionist. Other costs than can reasonably be 

expected include the purchase of additives and minerals required to meet NRC 

guidelines, additional labor required to formulate feed rations per nutritionist’s 

instructions, and also additional labor to feed a wider variety of rations depending on the 

specific diet required for different groups of cows. 

Push Feed Within 3 Feet of Feedlane Fence

Data was obtained from a local dairy and dairy industry representative. The dairy 

indicated that their monthly expense for cleaning out feed from the lanes is 

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Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

approximately $3,000. This expense covers a herd of 6,000 milk cows. Based on this 

information, the cost per cow per year is $6.00/cow/yr. About 50% of the facilities are 

expected to already be performing this mitigation measure and, therefore, the cost is 

adjusted to $3.00 per cow per year. 

Remove wet feed from bunks

For 150 cow herd, amount of labor required per week is 0.25 hr. The District estimates 

that the total number of rain events in the San Joaquin Valley will not exceed 12. Rain 

in the San Joaquin Valley generally occurs over a 20-week period between November 

and March. Cost per cow per year is $0.38. Statistics from the District’s permits 

database (PAS) were used to estimate the percentage of facilities already performing 

this measure. Based on these statistics, 13% of all large dairies are currently 

implementing this measure. The annual cost per cow for this measure is adjusted to 

$0.33. 

Begin feeding or disposing of rations within 2 hours of grinding 

No additional cost to coordinate feeding times with ration prep times. Rations are 

generally fed immediately after grinding/mixing. 

Store grain in a weatherproof storage structure/covering 

A cattle industry representative provided statistics showing that the capital cost of grain 

storage structures is generally $250/ton of grain. This figure was supported by a 

university research extension document discussing the economics of using grain 

storage structures. 

The grain consumption of an average dairy cow is estimated to be 1.46 tons/yr. The 

capital cost per-cow per year for grain storage structure is therefore $365. The grain 

structure is estimated to have a useful life of at least 25 years. This cost is therefore 

annualized over the 25-yr life to obtain the equivalent cost/yr of $40.21. It will be 

estimated that 50% of all large dairies are currently implementing this measure. The 

costs are adjusted to $20.11. 

2. Compliance Costs for Silage Menu 

Cover Silage Piles

Based on information obtained from a local dairyman and a dairy industry 

representative, the typical cost for covering silage is $0.80/ton. Since a typical dairy 

cow consumes about 4.56 tons/yr (25 lb/day) of silage, the cost per cow per year = 

$0.8/ton x 4.56 tons/cow/yr = $3.65. Statistics from the District’s permits database 

(PAS) were used to estimate the percentage of facilities already performing this 

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Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

measure. Based on these statistics, 41% of all dairies are currently implementing this 

measure so the cost is adjusted to $2.15. 

Increase Silage Bulk Density

Based on papers containing information on silage quality, most corn silage piles have a 

bulk density of about 40 pounds per cubic foot or less and most alfalfa silage piles have 

a bulk density of about 36 pounds per cubic foot or less. Thus, this mitigation measure 

requires the density to be increased by at least 10%. Increasing silage density can be 

achieved most cost effectively by using thinner layers when building the pile and 

compacting the layers as much as possible, with special attention being paid to the side 

slopes of the pile and the outer layers. Using this approach, the primary cost associated 

with increasing silage density will be additional labor and additional fuel for compacting 

equipment. 

Based on statistics from a cooperative extension research document, the time required 

for ensiling (storage) is 4 hours for 200 tons of silage. The quantity of fuel required is 13 

gallons for 200 tons. The District estimates that this measure requires double the 

amount of ensiling time and fuel to accomplish. The additional times required is 

therefore 4 hours for 200 tons and the additional fuel expense will be 13 gallons per 200 

tons. The annual costs are $2.40 per cow. 

Maintain Silage Face

The prevailing method for removal of silage from a silage bunker is the use of a frontend load. Silage is excavated from the bottom area of the face, which makes the top 

part of the face collapse downwards. This process produces an uneven face since it is 

hard to control the way the upper portion of the face collapses. 

An alternative to this method would be the use of a silage facer. This is a simple 

implement that can be used as an attachment to a skid steer or similar small or medium 

sized tractors. The implement resembles a large rake, with a long boom by which it is 

attached to the tractor. It is operated by being pulled downwards from the top to the 

bottom of the silage face. As is it drawn downwards, it shaves off a uniform amount of 

silage from the entire height of the face, thereby leaving a clean and evenly cut face. 

Available marketing information as well as university cooperative extension research 

documents indicates that this implement can be purchased for approximately $5,000. 

The District estimates that it will have a useful life of 10 years, hence the initial cost is 

annualized over 10 years to obtain an equivalent annual cost of $0.28. 

Using this device is also expected to increase labor costs slightly. Usually the operator 

uses the front-end loader for removing silage from the pile and also for loading it into the 

mixer, in one continuous operation. The use of a silage facer will require the operator to 

rake out the silage first, and then change equipment for loading the silage into the 

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Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

mixer. The District estimated an additional 1 hour per day will be required for this added 

step in the feed preparation process. Using this information, the cost for the mitigation 

measure is the annual cost of the facer plus the annual operation cost of $5.71 per cow 

per year. 

Silage Additives

Various additives may be added to silage at the time of ensiling to improve its nutritional 

value or to foster desirable fermentation conditions. One of the most common additives 

used is inoculum containing lactic acid bacteria. This inoculation is intended to boost 

the preexisting population of lactic acid bacteria in the forage being ensiled in order to 

produce as much lactic as possible in the shortest period possible after ensiling. 

Production of lactic acid is desirable because lactic acid itself is a valuable energy 

source, and its presence lowers the pH of the silage enough to inhibit the growth of 

other microbes that cause spoilage. 

The document cited in this analysis indicated that the typical cost of inoculating silage is 

$1.00/ton, but the range may be anywhere from $0.60 to $2.00. Due to lack of sufficient 

data from which a more concrete cost value may be derived, the District will use the 

more conservative estimate of $0.60 per ton. The cost of inoculation is $2.76/cow/yr. 

3. Compliance Costs for Dairy Milking Parlor Menu 

Flush or hose milk parlor

No additional cost; parlor cleanliness is practiced for food safety purposes. 

4. Compliance Costs for Dairy Freestall Menu 

Pave feedlanes at least 8’ along corral side

All the dairy freestall barns in the San Joaquin Valley are currently in compliance with 

this measure. To the best knowledge of the District, there are no freestall barns with dirt 

feedlanes anywhere within the District. Therefore, no dairies will incur costs associated 

with this mitigation measure. 

Flush or scrape freestall feedlanes after every milking or at least 3 times/day

Based on estimates obtained from a local dairy, a single flush takes about 1 hour, using 

a 30-horsepower electric motors. It is estimated that facilities currently flush two times 

per day as standard practice, hence only an additional one flush per day will be required 

for full compliance. Using an average electrical cost of $0.0974/kWhr, the cost to flush 

one additional time per day is $0.18 per cow per year. 

 C-8 Final Staff Report with Appendices For 

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SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

Statistics from the District’s permits database were used to estimate the percentage of 

facilities already performing this measure. Based on these statistics, 24% of all large 

dairies are currently implementing this measure. The annual cost is $0.14 per cow. 

Remove manure that’s not dry from individual stalls

- Medium Dairy - Remove wet manure from individual stalls every 14 days 

- Large Dairy - Remove wet manure from individual stalls every seven days 

Based on estimates obtained from a local dairy, removing manure from freestalls takes 

about 10 hours to complete, per event. When removing it once every 14 days, the cost 

per cow per year is $0.88. The cost for implementing this measure every week is $1.78 

per cow per year or twice the cost of removing the manure every 14 days. 

Statistics from the District’s permits database (PAS) were used to estimate the 

percentage of facilities already performing this measure. Based on these statistics, 

27% of all large dairies are currently implementing this measure. The cost is adjusted 

to $0.64 per cow for removing manure every 14 days and $1.28 per cow for removing 

manure weekly. 

5. Compliance Costs for Dairy Corral Menu 

Pave feedlanes at least 8’ along corral side

The length of feedlane space per cow is estimated to be approximately 2 feet. Thus 

feedlane area to be paved per cow is 16 square feet. Cost of poured concrete is 

generally about $2.65/sq. ft., based on information obtained from a local dairy 

construction company. Using a ten-year life for the concrete, the annual cost is $6.90 

per cow per year. 

Most corrals feedlanes within the District are expected to be already in compliance with 

this measure. However, it is possible that a certain proportion of dairies, especially 

older facilities, still have dirt feedlanes that may need to be paved in order to comply 

with this measure. The District estimates that such facilities will not exceed 5% of the 

dairy facilities that become subject to the rule. In this case, the cost is equivalent to 

$0.35 per cow per year. It is expected that both large and small dairies will be affected 

by this mitigation measure. 

Clean manure from corrals at least 4 times per year

Data was obtained from a local dairy and dairy industry representative. The dairy 

indicated that it costs $24/load to remove manure from corrals. Per occurrence, they 

generally remove 500 loads for their entire facility. The manure is usually removed by a 

contractor and applied to land. Using the herd breakdown by cow type (milking, dry, 

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Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

heifers, calves) District staff estimates that the annual per-cow cost of this mitigation 

measure is $5.16 per cow per year. 

Statistics from the District’s permits database (PAS) were used to estimate the 

percentage of facilities already performing this measure. Based on these statistics, 6% 

of all large dairies are currently implementing this measure. The total cost for this 

mitigation measure is $4.85. 

Scrape or flush concrete lanes in corrals every 7 days

Based on estimates obtained from a local dairy, a single flush of concrete lanes takes 

about 4 hours, using a 30-horsepower electric motor. The local dairy has 4,500 milking 

cows. The annual cost is $0.10 per cow per year. 

Statistics from the District’s permits database (PAS) were used to estimate the 

percentage of facilities already performing this measure. The annual cost is adjusted to 

$0.04 per cow. 

Inspect water pipes and troughs and repair leaks

Based on estimates obtained from a local dairy, this measure takes about 2 hours to 

complete, per event. The dairy has 156 troughs for watering 10,000 cows. It will be 

estimated that over the course of one year 10% of the trough float valves (16 valves) 

will need to be replaced. Each float valve costs $23 and the labor for replacement is 

$10; therefore the cost to perform the inspection and repair pipes and water troughs is 

$0.18 per cow per year. 

Statistics from the District’s permits database (PAS) were used to estimate the 

percentage of facilities already performing this measure. Based on these statistics, 

64% of all dairies are currently implementing this measure. The adjusted cost is $0.06 

per cow per year. 

Harrow, rake or scrape corrals to maintain dry surface

Based on estimates obtained from a local dairy, this measure takes about 10 hours to 

complete, per event. The frequency of the measure is once per week, however, for a 

more conservative cost estimate, the costs will be evaluated for 26 weeks per year. 

Using these assumptions the annual cost per-cow is $0.51 per year. 

Statistics from the District’s permits database (PAS) were used to estimate the 

percentage of facilities already performing this measure. Based on these statistics, 

41% of all dairies are currently implementing this measure. The adjusted cost is $0.30 

per year per cow. 

 C-10 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

Install shade structures with light-permeable roofing

Based on information obtained from a local dairy construction company, the cost of 

shade structures is generally around $4 per square foot. Shade structures are usually 

sized so that there is at least 40 square feet of shade per cow. The light-permeable 

material of choice for roofing shade structures is shade cloth. 

For this measure, it will be expected that a facility will need to remove existing roofing 

material and replace the shade structures’ roofs with shade cloth. It will be estimated 

that, the cost of shade cloth and the labor to install it will be about 25% of the cost of a 

brand new shade structure. Shade cloth is estimated to have a useful life of 5 years, 

hence this upfront cost will be annualized over the 5-year useful life. Overall the cost on 

a per-cow basis is $10.55 annually. 

Statistics from the District’s permits database (PAS) were used to estimate the 

percentage of facilities already performing this measure. Based on these statistics, 

39% of all large dairies are currently implementing this measure. The adjusted cost is 

$4.11. 

Clean concrete lanes such that the depth of manure does not exceed 12 inches

Based on estimates obtained from a local dairy, this measure takes about 10 hours to 

complete, per event. The amount of fuel required for equipment used is 12 gallons. The 

labor rate is $12.00/hr, and fuel costs $2.25 per gallon. The frequency of the measure is 

once per week. Using this information the cost is $0.51 per cow per year. 

6. Compliance Costs for Dairy Solid Manure Handling Menu 

Within 72 hours of removal from cow housing, cover dry manure pile with a 

weatherproof covering (large dairy only)

Large dairies already have this mitigation measure in the Phase I so they will incur no 

costs. Medium dairies are not subject to the solid manure handling menu and therefore, 

incur no costs. 

7. Compliance Costs for Dairy Liquid Manure Handling Menu 

Remove solids from waste water

The capital cost for a separator system, including pumps and plumbing and solids 

storage, is $105.81 per cow. This system is expected to have a useful life of 10 years. 

The annual capital cost is $17.22. 

Statistics from the District’s permits database (PAS) were used to estimate the 

percentage of facilities already performing this measure. Based on these statistics, 

 C-11 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

38% of all dairies are currently implementing this measure. The cost to implement this 

measure is adjusted to $10.68. 

8. Compliance Costs for Dairy Land Application Menu 

Land-incorporate manure within 72 hours

Incorporation of manure is a typical practice required to provide maximum benefits 

within soil. A 72-hour time limit is unlikely to cause any added costs. 

Allow liquid manure to stand in fields no more than 24 hours after irrigation

Incorporation of manure is a typical practice required to provide maximum benefits 

within soil. The mitigation measure is unlikely to cause any added costs. 

B. Beef Feedlot CAF and Other Cattle CAF Compliance Costs 

No significant changes will need to be implemented for beef feedlots and other cattle 

facilities and since there is no change to the thresholds for these categories, no new 

facilities are expected to become subject to Rule 4570; therefore cost of compliance is 

minimal. 

C. Swine CAF Compliance Costs 

There is no change to the swine threshold and, therefore, staff believes there will be no 

new swine facilities subject to Rule 4570. The single facility that is currently subject to 

the control requirements is expected to continue to comply without any additional costs 

to the facility. In summary, swine operations would have $0 per year in compliance 

costs associated with the proposed changes to Rule 4570. 

D. Poultry CAF Compliance Costs 

As with the dairy CAFs, there are CAFs that would be new to the rule’s control 

requirements. The requirements for layer operations are similar but not identical to 

broiler/duck/turkey requirements. In the following paragraphs, each mitigation measure 

cost is prefaced with whether it is on the layer menu, the broiler/duck/turkey menu or 

both. 

1. Compliance Costs for Poultry Feed Menu 

Layer and Broiler/Duck/Turkey – Feed according to NRC guidelines

This measure is a good practice that would not be difficult for most commercial growers 

to implement but there will be additional costs associated with recordkeeping for this 

 C-12 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

measure to newly subject facilities. The additional labor for facility staff and a registered 

nutritionist would cost $1,000 per facility per year. 

2. Compliance Costs for Poultry Housing Menu 

Broiler/Duck/Turkey – Use a dry cleaning method

This measure is a good practice that would not be difficult for most commercial growers 

to implement. Additional administrative costs are all incurred wit recordkeeping and 

management oversight. The cost to implement this mitigation measure is $1,000 per 

facility per year. 

Layer and Broiler/Duck/Turkey – Use drinkers that do not drip continuously

Precluding the use of less expensive drinkers and alternative water measures adds 

about $3,000 per facility per year. 

Broiler/Duck/Turkey – Inspect drinkers at least once every seven (7) days and adjust 

the height, volume, and location

The additional time for recordkeeping and management oversight for this practice adds 

about $2,000 per facility per year. 

Layer and Broiler/Duck/Turkey - Inspect water pipes daily

District staff is expecting that 0.5% of drinkers will leak and that piping leaks and breaks 

very rarely occur. This measure required that the ranch staff have the necessary time, 

expertise, and supplies on hand to perform the needed repairs. Small leaks and drips 

cannot be left for specialized maintenance crews in between flocks. There are 

additional costs for the actual inspection, recordkeeping and management oversight. 

The annual cost for this measure is about $5,000 per ranch per year. 

Turkey - If the facility houses turkeys in pens: install mounds or berms. 

Implementation of this control measure is expected to be $0, since it would be in the 

best interest to prevent water from accumulating in the pens. Turkeys are the animals 

most likely housed in outdoor pens, and allowing the birds to stand in water for any 

length of time would be detrimental to the birds’ health. 

 C-13 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

3. Compliance Costs for Poultry Solid/Liquid Manure Handling Menu 

Layer and Broiler/Duck/Turkey – Within 72 hours of removal from housing, either 

remove all litter/manure from facility or cover piles

Ranches will normally not have difficulty meeting this requirement. Occasional extra 

costs will be required for collection crews and trucker. The estimated average cost for 

this measure is $2,000 per ranch per year. 

4. Compliance Costs for Poultry Land Application Menu 

For land application, District staff expects that the operators will modify their processes 

to land-incorporate in a very short time, however the changes will not be extensive 

enough to change the expenses already incurred by the operator. 

V. TOTAL COMPLIANCE COSTS 

A. Dairy Annual Costs 

1. Medium Dairy CAF Costs 

For each required mitigation measure, the per-cow cost was multiplied by the projected 

number of cows on medium dairies in 2012. Since a cow is housed in either a freestall 

or a corral, the housing costs were allocated between the two. It is estimated that 

milking cows are split evenly between freestalls and corrals and 10% of the support 

stock is in freestalls and 90% in corrals. Results of the calculations are shown in Table 

2. 

Table 2 – Medium Dairy CAF Compliance Costs 

Menus 

Annual Cost 

$/cow/yr 

Annual Cost 

$/yr 

Total Feed Menu $33.76 $15,270,593

Total Silage Menu $13.02 $5,889,311

Total Milking Parlor Menu $0.00 $0

Total Manure Handling Menus $17.22 $7,789,088

Total Land Application Menu $0.00 $0

Weighted Housing Menu - Milk Cows $3.73 $1,091,010

Weighted Housing Menu - Support Stock $8.96 $1,428,643

Grand Total $76.68 $31,468,645

 C-14 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

2. Large Dairy CAF Costs 

The calculations for large dairies are performed in the same way as for medium dairies 

except that the milking cows are allocated 70% to freestalls and 30% corrals. The 

support stock is allocated similar to the medium dairies. The resulting costs are shown 

in Table 3. 

Table 3 – Large Dairy CAF Compliance Costs 

Menu 

Annual Cost 

$/cow/yr 

Annual Cost 

$/yr 

Feed Menu $3.00 $4,739,199

Silage Menu $13.02 $20,568,124

Milking Parlor Menu $0.00 $0

Manure Handling Menus $0.00 $0

Land Application Menu $0.00 $0

Weighted Housing Menu - Milk Cows $2.20 $2,217,693

Weighted Housing Menu - Support Stock $4.05 $2,318,550

Grand Total $22.27 $29,843,565

B. Poultry Total Annual Costs 

There are 18 broiler facilities and 2 layer facilities that would incur costs because of the 

change in the regulatory threshold for these CAFs for a total of 20 affected facilities. 

Poultry operations already subject to this rule are not expected to incur any additional 

costs for implementing the Phase II. The costs for poultry facilities are displayed in 

Table 4. 

Table 4 – Poultry Annual Costs 

Process Menu 

Layers 

($/yr)

Broiler/Duck/Turkey 

($/yr)

Total Annual Cost

($/yr)

Feed $2,000 $18,000 $20,000

Housing $16,000 $198,000 $214,000

Solid and Liquid Manure Handling $4,000 $36,000 $40,000

Land Application $0 $0 $0

Grand Totals $22,000 $252,000 $274,000

VI. ABSOLUTE COST EFFECTIVENESS ANALYSIS 

Absolute cost effectiveness is the total estimated annual compliance cost divided by the 

estimated emission reductions associated with the changes to the rule. District staff 

used the compliance costs above and the emission reductions from Appendix B of this 

 C-15 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

staff report. Table 5 lists the absolute cost effectiveness for each type of CAF. The 

cost effectiveness ranges from $5,362 per ton VOC reduced to $6,695 per ton for the 

various CAFs and is $6,688 per ton for the entire rule. 

Table 5 – Absolute Cost Effectiveness 

CAF Type 

Annual Cost 

($/yr) 

Estimated 2012 

Emission Reductions 

(tpy) 

Cost Effectiveness 

($/ton VOC reduced) 

Dairy $61,312,210 9,158 $6,695 

Beef Feedlot $0 0 not affected

Other Cattle $0 0 not affected

Swine $0 0 not affected

Poultry $274,000 51.1 $5,362 

Other, not listed 

above $0 0 not affected

Total $61,586,210 9,209 $6,688 

VII. INCREMENTAL COST EFFECTIVENESS ANALYSIS 

Incremental cost effectiveness compares the differences in costs and the differences in 

emissions reductions of the two candidate control technologies. This rule has a 

combination of required and additional mitigation measures available to the operator, 

depending on the source category. For beef feedlots, other cattle, swine and poultry 

operations, there are no more effective control technologies than the ones provided in 

the draft rule. Since we are not comparing two technologies against each other, the 

“more effective” control technology is already included in the rule’s provision. Since 

there is no more stringent technology than what is proposed in Rule 4570, no 

incremental cost effectiveness analysis for these types of operations was performed. 

A. Dairy Operations 

The dairy menus are made up of a combination of mandated and additional measures. 

Generally, the most effective and practical measures are required while measures that 

may need more flexibility or require higher costs may be additional. Cost for the 

additional measures that facilities are expected to choose have been determined as part 

of the absolute cost effectiveness analysis above. This analysis will determine the costs 

of the additional measures that are less likely to be chosen to determine the economical 

feasibility of requiring these measures. 

 C-16 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

1. Compliance Costs for Additional Feed Measures 

Feed steam-flaked corn or other steam-flaked cereal grains.

A research document on the economics of feeding steam-flaked corn indicated that the 

cost of steam-flaking ranges from $6.79 to $7.16 per ton of corn. An average of $6.98 

per ton was used for this estimate. The average grain corn consumption per dairy cow 

is estimated at 8 lb/day (mixed into ration that contains mostly silage). The annual 

consumption is 1.46 tons. The additional cost of flaked corn is therefore estimated to be 

$10.19 per cow per year. 

For total mixed rations that contain at least 30% by weight of silage, feed animals total 

mixed rations that contain at least 45% moisture.

The District acknowledges that there is a cost for adjusting the moisture content of the 

TMR to the required range, but it is not possible at this time to determine an 

approximate cost. The adjustment may be done using molasses, whey, water, or the 

addition of moisture rich vegetables such as beets, potatoes or carrots. In addition, the 

level of adjustment depends on the starting moisture content of the main ingredient. 

Silage-based TMRs usually have high moisture content and may require little 

adjustment since silage is generally moist in nature, whereas hay-based rations will 

require a greater degree of adjustment due to the dry nature of the main ingredient. 

The measure remains additional due to stakeholder concerns of the possible detriment 

to the health of cows. California dairies in the San Joaquin Valley have access to an 

amazing variety of food processing residuals that also happen to be appropriate for 

dairy feed. The moisture of the TMR can be influenced by both the NRC guidelines and 

the available commodity. In addition, adding excessive moisture to a TMR that contains 

a high percentage of fermented forage may decrease cows’ intake of feed dry matter 

and reduce their consumption of neutral detergent fiber. Decreased intake of dry matter 

and fiber may decrease milk production. Reduced fiber intake can also adversely affect 

the health of cows by increasing the risk of ruminal acidosis and other ailments; 

therefore, making the moisture content a required element would limit the operator’s 

flexibility in providing appropriate nutrition for the health and productivity of the animals. 

2. Compliance Costs for Additional Silage Measures 

Utilize a sealed feed storage system (e.g., AG-BagTM) for silage.

Information from a bagged silage making contractor was used the estimate the cost of 

bagged silage. The cost per ton is estimated to be $12.04 per ton silage harvested. 

Since chopping silage is a cost that will be incurred regardless of whether the silage is 

bagged or ensiled in traditional bunkers, the cost of chopping alone must be subtracted 

from the combined chopping and bagging cost in order to estimate the cost of bagging 

 C-17 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

alone. The cost of chopping is estimated at $15/acre, and an acre generally yields about 

20 tons of silage. The cost per ton is therefore $0.75 per cow per year. Based on the 

above information, the cost of bagging is $11.29 per ton of silage. 

Based on a cow’s silage consumption rate of 4.56 tons (dry matter) per year, the cost of 

bagged silage = $51.48 per cow per year. 

The measure remains a choice since it is not practical for most dairy facilities to store all 

of the silage crops that they harvest in a sealed forage system. For many dairies using 

a sealed forage system for all of their silage would require miles of bags. Because of 

space constraints at existing dairies, many operators must store the harvested silage 

crops in piles or bunkers that are exceptionally high. It is clear that many facilities do 

not have sufficient space available for the miles of bags required for a sealed forage 

system. In addition, with usage of sealed forage systems much larger amounts of 

plastic would need to be disposed. This will increase the already higher costs of the 

system compared to silage piles. Therefore, this measure must remain a choice to 

allow individual operators to determine if it is feasible for their operation. 

3. Compliance Costs for Additonal Freestall Measures 

Use non-manure-based or separated solids-based bedding for at least 90% of the 

bedding material.

Sand is a typical non-manure based bedding material. Artificial bedding materials such 

as water mattresses are also used, but these would not be representative of most dairy 

operations. Small and medium dairies in particular might not consider artificial bedding 

systems due to high initial costs. Just like manure bedding, sand is a loose material 

that is continually displaced from the bedding stall by the cow’s movements, especially 

when rising from a lying position. The displaced sand falls into the flush lanes below the 

stalls and is removed with the manure during lane flushing/scraping/vacuuming. Some 

of the sand also is contaminated with fresh manure in the stall and has to be removed 

for sanitary reasons. Sand therefore has to be replenished frequently to maintain the 

optimum level in the stall. The information reviewed indicates that this on-going 

replenishment requires an average of 40 lb of sand per day per cow, or 7.3 tons/cow/yr. 

Some sand can be reclaimed and if a flush system is used for cleaning manure lanes, 

but reclamation may not always be cost effective. For this analysis, it is expected no 

reclamation is used and that all the sand is purchased fresh. The cost of sand varies 

greatly depending on the region, season, distance from supplier, etc. Based on this 

cost, the total expense for replenishment sand = $63.88/cow/yr 

It is important to note that this estimate is very conservative. The costs are expected to 

be higher because often special equipment, or attachments to existing equipment, is 

required for raking sand in the stalls for replenishing sand. The sand also gets into the 

manure system and facilities using flush systems for manure removal will incur 

 C-18 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

increased wear on the pumps and other liquid manure handling equipment, as well as 

extra labor removing sand from the settling ponds. 

Have no animals in exercise pens or corrals. 

Total cost: $0.00/cow/yr 

There are no foreseeable additional costs to restrict animals to indoor housing based on 

typical dairy operation practices. However, restricting access to exercise pens by 

enclosing the barn may exacerbate animal welfare and animal health concerns, as 

access to open exercise pens is important for good breeding and pregnancy rates and 

hoof health. This measure would reduce emissions by reducing the area in which the 

animals have to excrete. This measure could affect animal health and therefore remains 

as a choice for operators. 

4. Compliance Costs for Additional Corral Measures 

Knockdown fence line manure build-up prior to it exceeding a height of twelve (12) 

inches at any time or point.

This measure is estimated to be similar to raking corrals which costs $0.51/cow/yr. 

Use lime or a similar absorbent material or thymol in the corrals according to the 

manufacturer's recommendation to minimize moisture in the corrals

The cost of the measure to apply lime to the corrals is dependent on the amount of 

space to which lime must be applied and the quantity of lime needed. The total cost 

must also include the costs of labor and equipment used for spreading and applying the 

absorbent. The application of lime/absorbent will need to be done every 5 years, hence 

cost is annualized over a 5-year period to be = $166.23 per cow per year. 

Like lime, the cost to apply thymol includes the quantity of thymol required and the cost 

for the labor and equipment used for spreading and applying thymol. Thymol would 

need to be applied every two weeks. The resulting cost is = $375.68 per cow per year. 

5. Compliance Costs for Additional Solid Manure Measures 

Within 72 hours of removal from cow housing, cover separated solids pile with a 

weatherproof covering.

This measure would need to take into consideration the surface area for the pile, the 

price of the plastic cover and labor to cover the manure pile. 

The following assumptions were made: 

• Surface area of manure pile for 150 cows = 10, 000 sq. ft 

 C-19 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

• Price for plastic cover = $0.09 per square foot 

• Plastic tarp lasts 5 years 

• Labor for covering 150 cow manure pile is 1 hour @ $19/hr 

Therefore the total cost would be = $1.71 per cow per year 

6. Compliance Costs for Additional Liquid Manure Measures 

Use a phototropic lagoon.

The primary costs associated with a phototrophic lagoon system are lagoon capacity, 

solids separation and mechanical aerators. For this analysis it will be expected that a 

typical dairy will have to construct one additional lagoon, install a manure separator 

system, and install mechanical aerators. 

The annualized capital cost of a lagoon over 25 years = $27.02. The annualized capital 

cost of a separator system, including pumps and plumbing and solids storage, over 10 

years is = $17.22. One $8,000 mechanical aerator is required for every 66 cows. The 

capital cost per cows = $121.21. The aerator is expected to have a useful life of 10 

years. The annualized capital cost = $19.73. The electricity cost per separator is = 

$1.03 per cow per year. 

Therefore, the total cost per cow per year = $65.00 

Use an anaerobic treatment lagoon designed in accordance with NRCS Guideline No. 

359.

The primary costs associated with anaerobic treatment are lagoon capacity and solids 

separation. In this analysis it will be expected that a typical dairy will have to construct 

one additional lagoon and install a manure separator system. 

The annualized capital cost of the lagoon over 25 years = $27.02. The annualized 

capital cost of a separator system, including pumps and plumbing and solids storage, 

over 10 years is = $17.22. 

Therefore, the total cost per cow per year = $44.24 

Remove solids from the waste system with a solid separator system, prior to the waste 

entering the lagoon.

The annualized capital cost separator system, including pumps and plumbing and solids 

storage, over 10 years = $17.22 per cow per year. 

 C-20 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

Total Cost for Additional Mitigation Measures 

Table 7 summarizes the costs discussed above. 

Table 7 – Costs to Implement All Additional Measures in All Dairy Menus 

Additional Mitigation Measures 

Cost 

(per cow per year)

Feed steam-flaked corn or other steam-flaked cereal grains. $10.19

Feed animals TMR that contain at least 45% moisture. $0.00

Utilize a sealed feed storage system (e.g., AG-Bag) for silage. 51.48

Use non-manure-based for at least 90% of the bedding material. $63.88

Have no animals in exercise pens or corrals. $0.00

Knockdown fence line manure build-up prior to it exceeding a 

height of 12 inches. $0.51

Use lime in the corrals. $166.23

Use thymol in the corrals. $375.68

Within 72 hours of removal from cow housing, cover separated 

solids pile with a weatherproof covering. $1.71

Use a phototropic lagoon. $65.00

Use an anaerobic treatment lagoon. $44.24

Remove solids from the waste system, prior to the waste entering 

the lagoon. $17.22

Total Annual Cost (per cow per year) $796

Since the measures to feed animals TMR that contain at least 45% moisture, use an ag 

bag and have no animals in exercise pens or corrals remain additional due to technical 

feasibility, as described above, the potential costs and emission reductions resulting 

from implementing these measures have not been included in the cost effectiveness 

shown in Table 8. 

Table 8 – Cost Effectiveness of Additional Dairy Measures 

Total Annual Cost (per cow per year) $745

Total Annual Cost for Medium Dairy $301,823,357

Total Annual Cost for Large Dairy $1,037,893,704

Total Annual Cost for Dairy CAFs $1,339,717,061

Est. Emission Reductions (tons/year) 2890.8

Cost Effectiveness ($/ton/year) $463,442

As discussed in the Staff Report, a menu approach provides much needed flexibility for 

the variability of Valley operations. Allowing for some additional measures rather than 

 C-21 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

specifically mandating all requirements not only allows the flexibility for producers to 

select measures that will work best for their facility based on their own type of housing, 

manure management practices, and feed storage and management but also helps 

minimize compliance costs while achieving the same emission reductions. Based on 

the socioeconomic analysis, dairies will spend approximately 22.5% (for large) and 

84.3% (for medium) of their profits, at $6,768 per ton of reduction, to comply with the 

proposed rule revisions. This is a significant cost to bear to implement the rule. The 

emission reductions achieved by the measures included in the proposed rule are 

already projected to exceed the reductions required from this rule in the District’s 

attainment plan. Therefore, mandating additional requirements would result in 

increased compliance costs and a higher cost per ton for the emission reductions. This 

impact will have a detrimental impact to the health of the industry and go far beyond 

RACT and BARCT requirements. 

V. REFERENCES 

1. De Groot, Tony, and Kevin Abernathy. Personal communication via telephone. 9 

Sept. 2010. 

2. Oldfield, Justin. “Typical Capital Costs for Grain Storage Structures.” Personal 

communication via email. 7 Sept. 2010. 

3. Jones, Todd. “Typical Cost of Poured Concrete.” Personal communication via 

telephone. 11 Sept. 2010. 

4. Gooch, C.A.; A.W. Wedel; and J. Karszes. “Economic Analysis of Mechanical 

Sand-Manure Separation of Flushed Sand-Laden Dairy Manure.” ASAE Meeting 

Presentation. Paper Number: 03-4016. 

5. De Groot, Tony. “Cost of Grooming Freestall Beds.” Personal communication via 

e-mail. 13 Sept. 2010. 

6. De Groot, Tony. “Cost of Flushing Freestall Lanes.” Personal communication via 

e-mail. 13 Sept. 2010. 

7. U.S. Energy Information Administration. “Average Retail Price of Electricity to 

Ultimate Customers by End-Use Sector, by State.” Independent Statistics 

Analysis. 15 Sept. 2010. 

<www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html>. 

8. De Groot, Tony., and Kevin Abernathy. Personal communication via telephone. 9 

Sept. 2010. 

 C-22 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost And Cost Effectiveness Analysis October 21, 2010 

9. De Groot, Tony. “Cost of Flushing Corral Lanes.” Personal communication via email. 13 Sept. 2010. 

10. De Groot, Tony. “Cost of Raking/Scraping Corrals.” Personal communication via 

e-mail. 13 Sept. 2010. 

11. De Groot, Tony. “Cost of Inspecting and Repairing Water Troughs.” Personal 

communication via e-mail. 13 Sept. 2010. 

12. Jones, Todd. “Typical Cost of Shade Structures.” Personal communication via email. 11 Sept. 2010. 

13. De Groot, Tony. “Cost of Flushing Corral Lanes.” Personal communication via email. 13 Sept. 2010. 

14. Cooper, Rob; Terry J. Klopfenstein; Todd Milton; and Dick Clark. 2001. 

“Economic Evaluation of Corn Processing for Finishing Cattle.” 2001. Nebraska 

Beef Cattle Reports. 

<http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1289&context=animal

scinbcr>. 

15. Gooch, C.A.; A.W. Wedel; and J. Karszes. “Economic Analysis of Mechanical 

Sand-Manure Separation of Flushed Sand-Laden Dairy Manure.” An ASAE 

Meeting Presentation. Paper Number: 03-4016. 2003.

16. San Joaquin Valley Dairy Manure Technology Feasibility Assessment Panel. “An 

Assessment of Technologies For Management and Treatment of Dairy Manure in 

California’s San Joaquin Valley." 2005. Page 159. 

<http://www.arb.ca.gov/ag/caf/dairypnl/dmtfaprprt.pdf>. 

17. Liu, Qinghua; Richard C. Shumway; and Kelly J. Myers Collins. “The Economics 

of Dairy Nutrient Management.” Farm Business Management Reports. 

Cooperate Extension, Washing State University. 2003. <http://farmmgmt.wsu.edu/PDF-docs/dairy/eb1947e.pdf>.

18. R.B. Family Farms, Inc. “Bagged Silage Analysis.” 2010. 

<http://www.rbfamilyfarms.com/baggedsilage.htm>. 

19. Pastoor, Jeff. “Corn Silage: A New Look at an Old Friend.” 2010. 

<http://www.beeflinks.com/Corn%20Silage%20Value.htm>. 

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Revised Proposed Amendments to Rule 4570 
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 C-24 Final Staff Report with Appendices For 

Revised Proposed Amendments to Rule 4570