Proof positive

AQUA Innovations’ hopes for a breakthrough technology depend largely on the experience of a farm in northwestern Wisconsin.

From the pages of In Business magazine.

Thursday, June 14 was an important day for the future of Wisconsin’s economy. On that day, a promising agriculture technology was commissioned at Son-Bow Farms near Spring Valley in northwestern Wisconsin, and it could be just the beginning of forging a better relationship between farms and the environment.

The technology, billed as a nutrient-management system, not only promises to prevent farm waste from getting into lakes by changing the way farmers handle cow manure, it also produces what the manufacturer calls a “super-nutrient” water that improves the fertility of soil. AQUA Innovations, the Sharon, Wisconsin-based environmental engineering firm that manufactures the system, which is marketed as the NuWay process, believes it addresses a host of agricultural challenges, including soil and manure management, and allows farm operators to generate clean and usable water as a by-product of their manufacturing process.

Needless to say, the cost and environmental benefits of widespread adoption could be enormous, especially because farm runoff has undermined the quality of lakes and waterways throughout Wisconsin.

At Son-Bow Farms, the technology is expected to reduce the farm’s total cost of production by $1.80 per hundredweight of milk, which is no small figure. While confident the NuWay technology will prove its worth at Son-Bow, Chris Lenzendorf, president of AQUA Innovations, does not consider this a mere demonstration project, as is the case with a Dane County installation now underway in Middleton that will be used as a showcase during World Dairy Expo this fall.

This aerial photo of Son-Bow Farms Inc. in western Wisconsin, taken in 2014, shows holding lagoon used to store manure. Such “ponds” could become a thing of the past, as the farm has installed new technology that Son-Bow Owner Jay Richardson calls a “game-changer” in the way farms handle manure.

The Son-Bow installation is a live system that he believes will become the flagship for other dairies in Wisconsin — not only to see how the system works, but to get ideas on what they can do with the byproducts that are produced. “This is the beginning of working our pipeline of farms that we’ve already spoken to,” says Lenzendorf. “What’s exciting about that project really is the fact that [farm owner] Jay Richardson is doing so much agronomy work with the byproducts that are produced from our system, so a major impact for him is the reduction in volume through the reclamation of water, but also he’s going to do some interesting things with the byproducts and start using those with his agronomists.”

Show-me kind of guy

The proprietary NuWay process attempts to ease the hassle of managing cow manure with an all-mechanical separation process. The process is not only capable of reclaiming more than 50% of manure as distilled water without the use of chemicals, its byproducts include the aforementioned organic, super-nutrient water that contains the sought-after nitrogen and potassium with virtually no phosphorous or pathogens.

This also diminishes farmers’ dependence on chemicals by allowing them to care for crops using the super nutrient water by-product during the entire growing season in an environmentally compliant, customizable way.

AQUA Innovations provides 24/7 remote monitoring and support and has built a customer service platform that handles everything from permitting, to the construction of the facility to house the system, to the remote troubleshooting and monitoring of phosphorous removal. Instead of paying considerable upfront capital costs that could run into the millions, 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. According to Lenzendorf, that’s roughly half the current monthly cost of waste management, and as a result of installing the system, farmers also have reduced storage costs.

Workers install equipment that’s part of AQUA Innovations’ NuWay system at Son-Bow Farms in western Wisconsin. Under the firm’s business model, farmers lease the system for a monthly rate rather than incur upfront capital costs.

No less than former Governor Tommy Thompson and Green Bay Packers legend Frank Winters, who are investors in the company and were on hand at the commissioning, have hailed Jay Richardson, owner of Son-Bow Farms, and wife Kristi as agricultural and environmental pioneers. As the first farm in Wisconsin to install what is essentially a nutrient concentration system — the company has had systems running in other states, such as Oregon, for nearly eight years — Richardson has made a significant investment in the technology and has been working on implementation for three years.

For Richardson, who has 1,300 milking cows on his Pierce County farm, it’s not really a wait-and-see proposition because both he and his chief financial officer have crunched the numbers and they are pretty confident it will pay off. Still, before recommending it to other farmers, he’s taking a bit of a Missouri, “Show-Me” attitude. “I just hate to get out over my skis,” Richardson says. “I like to prove things to myself. I’m 99% confident but I want to be 100% confident when I’m talking to other people. I’d rather say here’s what we have done, past tense, versus here is what we hope to accomplish. That’s where I’m hesitant on some of these things until I prove the numbers out.

“We’ve done our due diligence. We’ve done a lot of research. We’re fairly well convinced of the numbers, but I haven’t proven them yet.”

Part of the technology’s promise is that the byproducts of the process retain the good nutrients in manure — including nitrogen and potassium — without the pathogens and the phosphorous. The system is designed to virtually eliminate the pathogens and the phosphorous so that farmers can apply the byproducts on the surface of the soil throughout the growing season, instead of injecting it deeper into the ground during the spring and fall, as they do now.

The company’s initial focus will be on large farms because of their herd size and the fact that one dairy cow produces 33 gallons of cow manure per day, leading to millions of gallons of waste produced in Wisconsin alone. The inability to keep this farm waste from entering local waterways has led to excessive levels of phosphorus in local rivers and lakes, stimulating the growth of toxic algae, impairing water quality, suffocating fish and other aquatic life, and undermining local economies.

The system prevents manure from making its way to watersheds with the use of holding tanks. Once the solids are removed, the system sends byproducts to holding tanks, and farmers take the “super-nutrient water,” which resembles tea water, and use it to make their soil more fertile. The tanks are pumped through a center pivot, which takes the nutrient water out to farm fields and diverts it away from the watershed.

Among the economic benefits that interests farmers are the resulting reduction in manure hauling costs, which has been a pain point for them. According to Lenzendorf, in Kewaunee County east of Green Bay it can cost upwards of four cents per gallon to haul cow manure, but he says the NuWay system eliminates anywhere from 50% to 65% of the hauling costs,
an immediate payback for dairy operators. It also could help local governments maintain roads by keeping large trucks off of them, and it practically eliminates the odors associated with the large, manure-filled lagoons that fester in the heat all summer because removing the pathogens also removes the odor from manure, another environmental concern of farm neighbors. In addition, the system could allow farmers to expand their herd size without having to purchase more land.

“In terms of the super-nutrient water, we will use that as our source of nutrients, and that will be much more concentrated than we’ve had in the past,” Richardson explains. “We’ll be able to reduce our hauling substantially and we’ll be able to apply this on the surface — not have to inject it but rather just apply it on the surface and just let it run into the ground at a time that is more conducive because we’ll have a bigger window [of time] to apply those nutrients.

“Right now, the challenge with the traditional manner of handling liquid manure is you just have just a tremendous volume that you have to handle, and such a small window to get it out. If the weather doesn’t cooperate perfectly, that causes some substantial challenges.”



Regulatory front

Before making their pitch to Wisconsin farmers, company investors started working with the Wisconsin Department of Natural Resources to come up with a more efficient way for dairy operators to obtain permits for this installation, and they are pursuing additional laws to streamline permitting. “There are a lot of moving parts with the way the law currently reads,” Lenzendorf notes. “First and foremost, the DNR has been really, really good at staying on top of this subject and making sure they are available to expedite the permits right now because it’s such a valuable thing to the state of Wisconsin.

“In the future, yes, we want to shore up the permitting process and make it more efficient,” Lenzendorf adds, “but then equally as exciting is to have the farmers have the ability to use the super-nutrient water without the pathogens and without the phosphorous, through a center pivot.”

The technology’s liquid/solid partitioning system helps farmers produce pure, dischargeable wastewater — claiming zero environmental impact — plus a bedding replacement, compost materials, and the aforementioned nutrient-rich organic fertilizer that resembles tea water. This water contains approximately 1 to 2% of the phosphorous of raw manure but retains nutrients such as nitrogen and potassium as part of a liquid fertilizer that is easy to pump and irrigate on farm fields.

Anyone who has driven around rural areas of the state has seen large irrigation systems on wheels. They operate with a center pivot and spray water and nitrogen onto the fields. For environmental reasons, it’s been very difficult for farmers to get permission to have anything labeled agricultural waste — in other words, manure — sprayed with the help of a center pivot because of the aeration of pathogens. “Studies have shown that pathogens can travel up to 14 miles and make people sick, so it’s always been a nonstarter with the state, and rightfully so,” Lenzendorf notes. “But now that we can eliminate those pathogens and make sure there
is no phosphorous, we can use only the good nutrients — nitrogen and potassium — during the growing season.”

One of the bills under consideration essentially would allow farmers to use the center pivot to spread AQUA Innovations’ nutrient water if pathogens are removed
beforehand. By “removed,” Lenzendorf means virtually eliminated because the
process cannot completely remove everything, but it can virtually eliminate the pathogens in manure and then allow farmers to use the remaining nitrogen and potassium during the entire growing season, which he called a paradigm shift
for the dairy operators.

Not only does the removal of pathogens tame an odor-causing air pollutant, but also the remaining nutrients still increase crop production by 20%. “It’s really exciting for the dairy operator and for the state because even traditional farmers are going more organic,” Lenzendorf notes, “and because we know that when the soil is alive with these nutrients, it’s a really important catalyst for growth — instead of chemicals.

“There are two schools of thought on crop growth,” Lenzendorf adds. “One is the use of chemicals and one is the use of nutrients that always have been from cow manure, but we don’t like the term cow manure anymore. By the time it goes through our system, it’s really not cow manure anymore. It’s nitrogen, potassium, and then distilled water.”

For the DNR, the distilled water produced in the NuWay process is sometimes not the best solution for waterways in Dane County, and the agency will require AQUA Innovations to add calcium back into the distilled water before it’s discharged back into the Yahara River watershed so that it mirrors the composition of the watershed. “Some areas are a little bit different that way,” Lenzendorf notes, “but it’s not problematic.”

With the fall elections approaching, the Wisconsin Legislature is out of session, but AQUA Innovations personnel will be traveling around the state to not only educate lawmakers and would-be legislators, but also educate other community leaders on what this technology could mean for the state, for dairy operators, and the environment. In addition to starting a conversation with a global audience at World Dairy Expo this fall, they hope to lay the groundwork for bipartisan support of updated permitting legislation in time for the next legislative session, which will start in January of 2019.

Asked when AQUA Innovations would have to scale up its manufacturing facility
in Sharon, Wisconsin, located 12 miles east of Beloit, to accommodate new business, Lenzendorf cited the third quarter of 2018. The company now is hiring as many welders as it can to upgrade capacity at the plant. “That’s kind of the unsung story here with the company,” he notes. “We’re a small manufacturer and we’re hiring as many people as we possibly can to make sure our production remains on schedule.”

Far-reaching bennies

It sounds incredible now, but there was a time when the business principals thought they might have to move AQUA Innovations out of state to woo investors. Agricultural interests in California were interested in bringing the company out west, which would have been a painful step.

The partners took over the business in 2016 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 developing the nutrient management technology that eventually became NuWay.

Since taking ownership, the current investment group has committed another $4 million. For Lenzendorf, an out-of-state move would have been a travesty, especially given the fact that a visionary with strong ties to Madison had developed the technology and that it’s truly a “Wisconsin Idea.” Fortunately, local investors stepped up and the company began to make permitting headway with the DNR.

Richardson is one farmer who is glad they did. While he hedges on sales pitches to other farms until the technology does what he believes it will, Richardson remains pretty confident that this newly
installed technology will be well worth the investment. In fact, he speaks in glowing terms about its state, national, and global potential.

“This could be a big game-changer in the way we handle manure in the dairy industry in the state of Wisconsin and the country and possibly everywhere,” he states. “In places that have a water deficit, they will able to reuse this water, and in places where we have too much water, as is the case here in Wisconsin, we’ll be able to concentrate those nutrients and keep our water clean and use the other water as fertilizer.

“The benefits are far-reaching. I’m really excited about it.”

Another keenly interested observer is James Tye, executive director of the Madison-based Clean Lakes Alliance, which has worked with various stakeholders, including farmers, to divert phosphorus from the Yahara Watershed. He views the NuWay technology as a positive development, but he wants to see existing manure management practices continue. “There are a lot of farmers out there trying to up their game on conservation efforts, but this would be something to add to the mix because you’re still going to
have to do the conservation practices like buffer strips to keep the soil in place,” he notes. “There’s no one magic bullet.”

Tye notes the Greater Madison community is at the beginning stages of a transformational shift in how it interacts with local lakes, and the NuWay manure management technology could help advance the ball. “We’ve already done it with recycling, we’ve done it with biking, and we’ve done it with nonsmoking policies,” Tye notes. “All of these things have been transformational shifts in our community, and we’re several years into this transformational shift in how we interact with
our lakes.”



Winters among high-profile AQUA investors

When Brett Favre hangs a nickname on you, it tends to stick. So back in the 1990s when the future Hall of Fame quarterback referred to Frank Winters, his good friend and teammate, as “Frankie Bag-A-Donuts,” the good-natured man who snapped footballs to Favre in two Super Bowls was destined to hear it over and over again.

Frank Winters

His fellow investors in AQUA Innovations, a Wisconsin-based environmental engineering firm that believes its has found a solution to a myriad of agricultural challenges, might even call him Frankie “Bag-O-Money.” Winters, who is both a shareholder and director of business development for the firm, has been an active business investor since his playing days ended, but this opportunity has him particularly excited.

When Winters first learned of AQUA Innovations, the discussion was about the legislative and permit side of the operation — the company has endorsed proposed state legislation to streamline permitting and remove uncertainty for farm operators — but as he learned more, he delved into it and saw the water quality problems its technology is trying to address.

The technology that Winters and his fellow investors believe in is called the NuWay process, a nutrient concentration system that mechanically separates manure into bio-degradable products, including distilled water. “Living in Wisconsin for a long time, we had heard about the problems, especially here in Dane County with the surrounding lakes and the problems we’re having with phosphorous, and so we became enthralled by it,” Winters states. “We actually sat with farmers to discuss it, and when they came to us and made a presentation to put a group of investors together and try to purchase this company, we were really excited.”

For Winters, due diligence not only includes research into business ventures, but also business associates. More often than not, he’s associated himself with people who’ve been successful in business, and it has paid off. With AQUA Innovations, his partners include company president Chris Lenzendorf, also his partner in Lenzendorf Winters & Associates and part of the funeral business with All Faiths Funeral Homes in Madison and Janesville; Mike Herl, broker and partner with Madison Commercial Real Estate Development; Sean Cleary, president of Cleary Building Corp. of Madison, which will construct the onsite facilities that house the NuWay system on farms; and
a former governor named Tommy Thompson, who remains a farmer at heart.

There are more investors involved and most of them, Winters notes, are “local Madison guys” who have been very successful in their own right, including people who have built businesses from the ground up. “We’ve surrounded ourselves with these guys and that’s what we’re looking for as an investment group — people that have been through the wringer and know what it takes to be successful.”

AQUA technology makes World Dairy debut

By the time the 2018 World Dairy Expo wraps up in early October, a global audience will have first-hand knowledge of the ecological and economic benefits of the NuWay nutrient management system. Dane County is in the process of installing 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.

AQUA Innovation’s manure management technology will be installed at the site of Dane County’s second manure digester in Middleton in time for tours during the 2018 World Dairy Expo.

Chris Lenzendorf, president of AQUA Innovations, the Sharon, Wisconsin-based water engineering firm that manufactures the system, isn’t one to ignore business prospects, and he notes that prospects from all over the world will be in town. “We’re going to give tours of our facility,” he says, “but equally as important, we’ll start a conversation about the use of the nutrients during the growing season. That’s kind of a hot topic.”

If widely adopted by dairy operations, the AQUA Innovations technology will change the way farmers handle cow manure. It’s a nutrient management system that uses a mechanical separation process to remove 100% of the suspended solids and 99% of the phosphorous from manure, produce biodegradable by-products that allow spreading throughout the growing season, and reclaim some of the manure as distilled water.

Removing phosphorous, which is public enemy number one for the Yahara Watershed, is a key feature. Global guests will see a system that uses a reverse osmosis process to reclaim 50% of the water in manure as pure distilled water, which then is safe enough to return to the watershed with some modifications to mirror the composition of local waterways. Lenzendorf says reclaimed water is the most exciting part of the technology because it’s actually cleaner than the tap water available to Wisconsin residents.

At World Dairy, “We’re going to take that opportunity to talk to dairy farmers, to legislators, to people from all over the country to get ideas on how they do things in their states,” Lenzendorf notes. “That will be a huge place for us to start that conversation, and equally
as important, for them to see our system in use.”

Also among NuWay’s touted benefits is that it reduces storage and hauling costs (placing less stress on local roads) and minimizes odors. Dane County Executive Joe Parisi hopes to see more widespread adoption of this technology on local farms and combine it with dredging projects that remove phosphorous muck that has accumulated on the beds of local waterways. He believes the dredging is needed to achieve meaningful reductions in phosphorus levels, and the farm technology will prevent more phosphorous from forming.

A dose of realism is needed in terms of expectations because substantial improvement will take years to accomplish, “but this will pay off for our kids,” Parisi states.

Click here to sign up for the free IB ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.