Interview with Compost Producer C. Smith
Ms. Smith was a rancher and sent her manure as an input to a composter in the region. Initially, she passively learned the composting process through her interactions with the composter. She became interested in the process and started actively seeking information. She realized that she had the land space, equipment, and inputs to create compost. Also, she was far enough away from the other composter that they would not be in competition. She reached out to some potential compost buyers and learned that she could sell large volumes of final compost product to them.
Ms. Smith’s composting process is traditional. Essentially, she gathers inputs and allows them to decay over time. The two primary elements of compost are carbon and nitrogen. People supply her with various inputs containing these elements. Carbon can be found in dry leaves and woody material, sawdust, and other dry organic refuse. Nitrogen is contained in inputs with higher water contents like food waste. The inputs are first combined in large “bins” where decay begins and excess water drains away. Subsequently, the material is moved to large piles called windrows where the decay process generates heat sufficient to kill undesirable microbes and seeds. After the windrows, the material is moved to long-term storage piles where the decay process continues. The final compost product is ready for commercial sale after approximately one year.
While producing compost involves a natural decay process, commercial compost production requires heavy equipment and government permits. These requirements necessitate financial outlay. Heavy equipment can include front end loaders and dump trucks at minimum, but can also include skid steers, wood chippers/grinders, screening apparatus, and more. Also, expenses to comply with government regulations include direct permitting costs as well as funds for private consultants and capital improvements to capture waste water and other products deemed hazardous materials.
Sales and Revenues
Commercial composting carries some special concerns for revenues and cash flows. Because it takes several months to create the final product, the commercial composter must have strong cash reserves to bridge the gap between start-up and sales. In some cases, Ms. Smith generates revenues by charging the input providers a disposal or dumping fee. Also, Ms. Smith has found that selling her product to a few large customers is more efficient than selling small quantities to many individuals, but she will sell small batches to friends and other community members.