TURNING COMPOST PROFITS

Rod Tyler

BIG SOLID WASTE HAS never been beautiful in the composting industry, but thanks to a rapidly developing market for erosion control products, it is. “Overs” that once sat in unwanted piles because they did not meet traditional compost specifications now can be used for erosion control, vegetation establishment and filtration applications. So by getting more out of incoming materials, composters are able to increase their profits as much as 30 percent — making more money on tipping fees as well as on product sales.

Two Revenue Streams

Facility space is a premium at composting sites — you cannot make money selling a compost product unless it has been processed onsite and readied for sale. Nevertheless, composters have two revenue opportunities: tipping fees and product sales. To be efficient, composters must pay attention to how the total money gained from both revenue streams will pay for all of the steps required to create compost out of what was once waste and bring those products to market. In other words, they must consider the “spread” between tipping fees and product sales to pay for processing costs.

To make money on tipping fees, some commercial composters have steered away from smaller windrows and instead turned to larger stockpile composting systems to cram more materials onto their processing sites. Most facilities forecast an “ideal” incoming waste volume. However, Mother Nature can create snags in even the best-laid plans and site managers' projections. Too much or too little rain can change the processing time required to move materials to market, which will affect costs.

Facing these pressures, as well as competition from other disposal options, many composters now are examining alternate secondary markets for their products and generating new revenue streams in environmental applications. The growing erosion control markets are not only allowing operators to use facility space more wisely, but they also are allowing them to use what would have been unused materials and to move product through their sites more quickly — leading them toward greater efficiency.

Unearthing Erosion Control

In Americus, Ga., compost was used to help control erosion at the Habitat for Humanity International Global Village and Museum.

“This particular construction site had a history of problems with erosion caused by surrounding impervious surfaces and downhill structure,” says Wayne King of Erth Products, Peachtree City, Ga. But by using compost blankets, project coordinators improved soil structure and retained stormwater onsite. Compost filter berms were constructed, and filter socks filled with compost were used in lieu of silt fences and a retaining wall in a stream bank and used as ditch checks, he says.

According to the U.S. Environmental Protection Agency (EPA), Washington, D.C., and many state Department of Transportation agencies, these new markets have a large appetite for product as well as growth potential. Several universities and private organizations are conducting applied research; product and application specifications are being developed at state and federal levels; new technologies for application methods are being developed; government agencies responsible for approval and enforcement of erosion control measures have supported and approved the use of compost; and architects responsible for erosion and sediment control plans have begun to include compost in their designs, according to Britt Faucette, organics recycling and compost specialist for engineering outreach at The University of Georgia, Athens.

Screen for the Green

Additionally, manufacturers are changing equipment to allow products to be simultaneously created for both traditional compost and erosion control markets. Fifteen years ago, most facilities screened compost products through a zero- to 1-inch size. But as markets have matured, the quality demanded in those same markets has created needs for compost products screened through a ⅜-inch to ½-inch-minus size. This takes longer to get through most screeners and creates more “overs” of materials that don't pass through the smaller-sized screen specifications.

In the past, many facilities would stockpile “overs” then gradually recycle and compost them with new, incoming waste materials to get rid of them. Some composters have learned that double-grinding can reduce product down to pass through a 2-inch screen with two passes. This regrinding or rescreening of the “overs” fraction in a separate processing step allows more material to be used for saleable products. However, new screeners have reduced the need to double-screen products because they can screen three products in one pass and allow the site manager to reduce rehandling costs.

At a facility composting and screening 100,000 cubic yards per year, for instance, typically only 50,000 to 60,000 cubic yards of that cycle would have made it to market as a ⅜- to ½-inch product. The rest that did not fit the size specifications would remain onsite and would not generate revenue. But by using new equipment that has a screen system to create three products — “overs” (2-inches-plus), “middles” (½-inch to 2-inches) and “unders” (½-inch or smaller) — the composter can generate revenue from three saleable products instead of just one. Compost measuring ½-inch-minus can be used for gardens, topsoil, nursery and landscaping; ½-inch to 2-inch compost can be used for berms, filter socks and mulches; and 2-inches-plus compost can be used in fuel markets.

The benefits of the growing erosion control markets and new equipment are twofold, says Robbie Urbine of Yardworks, Richmond, Va., noting that new markets allow composters to take in more product and gain from tipping fees, as well as bring more products to market and make money selling product. Grinding and screening equipment is allowing composters to generate three revenue-generating products. Equipment also is allowing composters to use processing space more efficiently, especially at compost sites that are running out of room, he adds.

Site operators usually wait for compostable materials to run through the normal processing cycles until it reaches the marketplace and let “overs” sit in a pile until they naturally decompose to a smaller size that meets traditional compost specs, Urbine explains. However, because of the new markets for compost, space normally used to store “overs” now can be replaced with new materials to create additional marketable composts.

Coarser “overs” composts can be used for biofilters. The middles fraction of the compost stream may have a good home in these markets, too. In some cases, using overs and middles to fill and replace the materials in biofilters earns composters $15 per cubic yard to $20 per cubic yard. The market price for compost filtering materials and growing materials in some cases have reached as high as $200 per cubic yard in the erosion field.

New screening and separation technologies also have allowed other residuals from compost sites once thought to be garbage and nonbiodegradable to be used in lucrative compost markets. For instance, some facilities that have had plastic contamination problems have affiliated themselves with plastic lumber companies to create another market.

Because plastic lumber is a combination of plastic and wood that is normally recycled separately and sent to the manufacturer, having a mixture may have benefits, if it is clean. And newer screeners offer cleaner products than 15 years ago, making this option worth reviewing, according to composters.

Clearly, increased competition in tipping fees and processing costs continue to challenge today's composters. But as smart operators realize how to use new equipment and develop environmental applications, they will be more likely to turn additional profits.

Rod Tyler is owner of Green Horizons, Grafton, Ohio, and manager of Filtrexx International, also in Grafton.

COMPOST REVENUES:

Traditionally, composters have had one market for product sales. As waste comes in and is processed, about 60 percent is sold as ½-inch compost. The remaining 40 percent of those materials that are ⅜-inch or larger (overs) cannot be used, and operators must pay to haul them away.

TWO REVENUE STREAMS:

But thanks to new compost markets and equipment, operators now have an additional revenue opportunity. Instead of 40 percent of materials going to waste (as pictured above), only 20 percent is wasted. The remaining 50 percent goes toward screened ½-inch compost, and 30 percent (measuring ½ to 2 inches) can be sold in filtration markets.

STA'S INFLUENCE ON COMPOST

To help compost gain a reputation as a mainstream lawn/garden and agricultural product, the U.S. Composting Council (USCC), Holbrook, N.Y., believes the industry must raise its professionalism, work to produce consistently high-quality products and assist end-users in purchasing products. Consequently, the council has developed the Seal of Testing Assurance (STA) Program, with financial assistance provided by the U.S. Environmental Protection Agency, Washington, D.C., as the first step toward establishing national compost standards.

The STA Program is a compost testing and information disclosure program that uses uniform testing and sampling protocols. The program uses test methods and sampling procedures outlined in the USCC's “Test Methods for the Evaluation of Composting and Compost” (TMECC).

The goal of the USCC and the STA Program is to allow compost buyers to more easily purchase the products necessary for a particular project, as well as to allow buyers and specifiers to more systematically compare compost products and make educated purchasing decisions. The uniform product label contains test analyses data, end-use instructions and an ingredient statement. Additionally, the program aims to encourage consistency within the composting industry in product sampling, lab testing methodologies and product labeling. Only through industrywide consistency will the “green industry” become dependent upon the composting industry as a respected and ongoing supplier of materials, the USCC says.

Since the program's inception in 2000, more than 100 compost products have been certified, and STA Program-certified composts bear the STA logo and are specified by name by landscapers, architects and government entities.
— Ron Alexander, R. Alexander Associates Inc., Apex, N.C.
www.alexassoc.net

ANALYZE THIS

To determine how to grow compost markets and what equipment to purchase, operators can conduct realistic time trials. Typically, a composter will be better off with a machine that can screen several products simultaneously than another machine that can only screen one product at a time because more total product can be produced without additional handling. However, only real data will be able to help a composter determine what type of operation is the most lucrative.

Field tests will help composters get the most of their facility space. Material movement is one of the most expensive items on any compost site, according to the U.S. Composting Council, Holbrook, N.Y. Composters who have expanded their sites and realize this sometimes change their processing systems to include material movement as part of the compost turning exercise. Therefore, they have been able to cram more product into smaller spaces, maximizing their facility's economic output.

For example, recycling “overs” typically costs $4 per yard, according to industry sources. Using that cost with 100,000 cubic yards of compost to screen and 40 percent “overs,” the per-yard cost totals $160,000 in total liability per year (40,000 yards × $4 per yard), each year. The key to success in today's compost market relies on figuring out how to avoid spending that amount on a nonrevenue-producing activity.

An interactive spreadsheet for time trial data is available by e-mailing: [email protected].
— Rod Tyler