For 10 years, Perdue, in partnership with Missouri-based AgriRecycle Inc., has operated a plant that takes raw poultry litter, screens it, dries it and heats it to kill off pathogens. The result is an organic-certified fertilizer that is sold to homeowners, farmers, and golf course and landscape managers.

With $44 million invested so far, the company has yet to make money, said Steve Schwalb, vice president of environmental sustainability for Perdue.

"We're not making money today," he said. "But we will make money. ... We're good marketers."

The $12 million facility opened just south of Seaford in 2001, with a $1 million grant from the state. Delaware officials pledged an additional $2 million. Improvements and operating costs throughout the years have increased the company's investment.

Schwalb said that Perdue is in the manure-recycling business for the long haul.

"We're not going anywhere," he said.

The right time
The plant was constructed at a critical time for area farm families. Delaware and Maryland had passed laws aimed at curbing nutrient runoff into creeks, rivers and bays. Farmers were required to develop plans for how they would handle nutrients -- found in commercial fertilizers and animal waste -- on their land.

In addition, researchers in both states had concluded that years of using poultry manure as a fertilizer had overly enriched some fields with phosphorus.

Poultry litter naturally contains about the same amounts of nitrogen and phosphorus, but crops, such as corn, typically use all of the nitrogen and leave as much as three-quarters of the phosphorus in the soil. Over time, the phosphorus builds up in some soils. The buildup can increase the risk of nutrient pollution in nearby streams and waterways. Phosphorus typically binds to soil particles, but chemical reactions and soil erosion can cause it to reach ditches and waterways.

Perdue growers were already using a feed additive that reduced the amount of phosphorus in chicken manure. But scientists, state regulators and company officials agreed that better manure management was also needed.

When the state nutrient management law was adopted, the statewide surplus of phosphorus compounds in the soil was estimated at about 40 pounds per acre a year. Some farmers didn't have space to spread manure. Others had soils that were so rich in phosphorus that they were limited in how much they could spread.

Bill Brown lives on 50 acres near Hurlock. He and his wife operate seven chickenhouses and typically have flocks totaling 235,000 birds.

"I am not a crop farmer," he said.

Because of space limits on the farm, Brown said, he depends on a third party to use his manure. His contract with Perdue AgriRecycle is a good fit with his operation.

The company provides a clean-out service for his poultry houses at no charge and covers the cost of transporting the litter to the AgriRecycle plant 27 miles away.

In exchange, the company gets the nutrients.

"It works well for my wife and I," he said.

Incentives
Jack Tarburton, now the regional U.S. Department of Agriculture's rural development director, was state secretary of agriculture when discussions were under way to determine what should be done with excess poultry manure. He credits then-Gov. Tom Carper for working with farmers and the poultry industry to come up with a plan that used incentives rather than regulatory action.

Last year, 56,000 tons of poultry manure from Delaware farms went to Perdue AgriRecycle and another 20,684 tons were sent to farms out of state for land application. And by 2008, the state's nitrogen-to-phosphorus ratio was in balance, according to studies by the University of Delaware.

"We're seeing a trend," said Larry Towle, the state's nutrient management administrator. "There is no increase and there is a slight decrease."

In all, Perdue AgriRecycle takes about 80,000 tons of litter each year and produces 50,000 tons to 55,000 tons of finished product, said plant manager Steve Lester.

About 160 farmers in the region take advantage of the manure recycling operation, he said.

Delaware agriculture officials spent about $500,000 in 2008 to help Perdue offset transportation costs of getting Delaware manure to the recycling facility. Part of this money also goes to offset the costs of moving manure out of the Chesapeake Bay watershed, Towle said.

When the plant opened, company officials originally thought they would have a big market for the processed poultry manure in the Midwest. They even located near a rail line to make bulk shipping of the processed manure more economical.

But the market wasn't as strong as company officials had expected. So Perdue officials worked to get their products certified as organic.

Once that happened, they saw the home and garden market grow.

The organic litter is marketed by several companies and is identifiable because "it will say poultry litter on the bag," Schwalb said.

The plant makes several variations on the poultry litter product. But all get the same initial treatment.

The litter is screened and sifted. It goes through dryers, a high-heat cycle to kill any pathogens and then through grinders. Sometimes, the treated litter also goes through a pelletizing machine to produce a slow-release fertilizer.

The ground and screened products are sorted and are sold for use in the home gardening, landscaping and golf course industries. The pelletized manure is often used on farms.

Schwalb said the good thing about the end product is it gives users something that has a consistent application and nutrient rate.

"The evolution of this business is what does the fertilizer customer need," he said. "This is an alternative to chemical fertilizer."