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Ag technology helps farms and lakes co-exist

The ability to reclaim millions of gallons of manure as distilled water is a remarkable benefit of a new technology that strikes a balance between a farmer’s need to expand and the public’s need for clean water.

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Partners in progress

Aqua Innovations and its factory are based in Sharon, Wis., about 12 miles east of Beloit, but the majority of the partners are in Madison. In addition to Thompson, Winters, and Lenzendorf, also spearheading the venture is Mike Herl, managing broker and partner with Madison Commercial Real Estate Development, who will serve as general contractor for the buildings necessary to house the installations.

Under the NuWay system, the manure goes into an on-site facility — to be built by Cleary Building Corp. of Madison — and that is where the solids are removed and dried. Sean Cleary, president of Cleary Building Systems, is an investor and a member of Aqua Innovations’ board of directors.

In 2016, the partners took over the business from the family of the late Richard “Doc” Heins, the former CEO of CUNA Mutual Group who originally developed the technology. In the early 1990s, Dr. Heins identified the trend of expanding farms and herd size, and he knew it would have negative environmental impacts. Heins also was a professor at the UW–Madison School of Business, where he taught risk management and insurance and business law for more than 30 years. He invested roughly $15 million in the nutrient management technology that became NuWay. Since taking ownership, the current investment group has committed another $4 million.

One of their challenges was developing an affordable way for farmers to utilize NuWay. Depending on the size of the farm, the NuWay system costs anywhere from $600,000 to $3 million to install, but Aqua Innovations has built a platform that handles everything from permitting, to the construction of the facility to house the system, to the remote monitoring of phosphorus removal. Instead of paying $400,000 here or $600,000 there in capital costs, farmers can lease the system for 10 years and pay a flat monthly rate of about $35,000 to $38,000 with a maintenance fee included. So instead of spending about $70,000 per month for waste management, they can now pay roughly half that cost and reduce storing costs, have no significant hauling expenses, no upfront capital expenditures, and Aqua staffers monitor the system and troubleshoot remotely.

“They can lease it for 10 years with no cap-ex up front, so if you think about it from a milk producer’s standpoint, they know they are going to have $14.70 per hundredweight [for their milk], and they are going to have about $1 million per month in revenue,” Lenzendorf notes. “It’s great money but then it’s chipped away, chipped away, and chipped away by various expenses. So now we’re going to ask them for another $3 million to install our technology? Pretty soon, they aren’t in very good shape.”

As a result of the service platform and leasing model, Lenzendorf believes the company has not only established an affordable solution for farmers, but also a sustainable business model for the company.

World Dairy exposure

Dane County hopes to install the system at the site of its second digester, located just outside of Middleton in the town of Springfield, in time for demonstration tours during World Dairy Expo, set for Oct. 2–6. The company notes that manure digesters remove about 60% of the phosphorus found in manure, but the NuWay system achieves near 100% removal.

Dane County Executive Joe Parisi believes the technology will save farmers money in hauling costs and save wear and tear on town roads, a source of contention in rural communities. “So on the phosphorus side, the economics of it, and the relationship with neighbors, this is all positive for farmers,” Parisi says.

Combined with county dredging projects that remove phosphorus muck that has accumulated on the beds of local waterways and results in substantial reductions in phosphorus levels, Parisi believes the widespread adoption of this technology will lead to dramatic qualitative improvement over time.

“No matter how much work we’re doing on the farm fields now, unless we remove that muck, we’re going to see very limited progress [in reducing phosphorus levels],” Parisi notes. “Once we get that stuff out of the system, combined with efforts such as nutrient concentration and the other work we’re doing with farmers across the county, we will see improvement in the phosphorus area.

“Now, it’s still going to take years,” Parisi adds. “One of our challenges is that we need to be realistic with our expectations. We will be reducing phosphorus, and we will see better water, but it’s not going to happen overnight. We’re still looking at a decades-long approach, but this will pay off for our kids.”

Also excited about the prospects for the technology is Sean Cleary, president of Cleary Building Corp. He is enthusiastic not only because his firm will construct the buildings that house the NuWay system, but also because he believes it addresses intractable problems.

“On every large dairy farm, there is potential that this will not only be ecological, but also economical because it will save money with manure waste and also be friendly to the environment, especially where you have neighbors that complain about the odor,” Cleary states. “Plus, again, there’s the water runoff. We have enough pollution issues with our lakes and streams, so this is a potential game-changer.”

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