The Rising Cost of Farm Buildings

Are NUTRIENT MANAGEMENT REGULATIONS the culprit?

Some farmers and builders unhesitatingly say ‘yes’.
Others blame the farmers’ preference for bigger, fancier buildings, while still others say that the additional requirements provide needed protection for both the farmer and the environment

by KATE PROCTOR

Most people involved agree that government regulations have contributed to an increase in the cost of putting up a new barn. But have these added costs resulted from a need for better standards across the province? Or are they merely examples of excessive government intervention?

Geri Kamenz raises crops and pigs in Grenville County near Spencerville and is the new president of the Ontario Federation of Agriculture. He recently added a 2,000-head nursery to his existing 3,000-head gilt barn. The new addition, which he started planning in late 2005, is 9,280 square feet and sits over a four-foot deep manure pit. 

The existing barn, which he completed in 2002, is 28,050 square feet with an eight-foot deep manure tank underneath. “I am very proud and pleased with the final product,” he says, “but it has been a very frustrating process.” Due to increases in materials and regulations imposed by the Nutrient Management Act (NMA), Kamenz says his final costs reached almost half a million dollars for the structure – a full 43 per cent higher than his original estimate, which was completed six months before construction began. “About 15 per cent of those costs were due to unanticipated government regulations,” he says.

Kamenz is no stranger to building regulations. All of his pig barn construction has occurred after 2000, when municipalities were already sensitive to environmental concerns, and his expansion in 2002 went “as smooth as silk.”

Kamenz takes environmental protection seriously and has had a “very close working relationship with the South Nation River Conservation Authority,” sitting down with them to ensure he was doing things properly. He describes the conservation authority as “very progressive” and has himself been a member of the clean water committee. “I am very sensitive to the footprint that I have on the land and the environment. With or without the regulations, we would have done things right,” he asserts.

When he started to think about adding the nursery, he thought he was familiar with the permits and requirements, but he says he “was blindsided by the nutrient management regulations.” He learned that the NMA requires a site characterization, which involves getting a geotechnical engineering report completed before he could obtain a building permit. He had to get two reports done, which ended up costing him $2,600. This involved digging test holes to ensure the safety of the water table and see that there was an impermeable layer of clay within 18 inches of the bottom of the manure pit.

Consulting engineers found that, while there was a clay layer, it was not within the required distance. They then did tests to determine if there was sufficient material on the building site to create this impermeable layer. Happily, they found the material was on site, a permit was issued and Kamenz thought he was on his way.

The clay layer was constructed, compacted and then a different geotechnical engineer was hired to check the work. The test results came back saying the layer was excellent, but just to be safe, they decided to pull one more sample. This time, the clay liner did not meet the requirements.

Kamenz found a company in Manitoba to supply a synthetic manure tank liner at a cost of $1.25 per square foot. He learned that he also had to purchase a protective felt layer at a cost of $0.35 per square foot – “kind of like a towel” that protects the liner from the getting tears.

Kamenz ordered the product, but days and weeks went by. “The builder was frustrated.  I was frustrated,” says Kamenz. They finally located the liner, which was sitting in a warehouse in Cornwall, further delaying building. When construction finally got underway, Kamenz learned that the materials he had priced months earlier had gone up in price significantly – some by as much as 40 per cent. But, of course, he cannot increase the price of the pigs going out the door just because he incurred significantly higher building costs for his project.

For this reason, he advises, people should be aware of the potential for significant cost overruns before they start into a project. “Make sure you have access to the money, so you are not stumbling half way through.”

Kamenz also questions the logic behind the regulations. His addition is much smaller than the original barn, but he is able to move manure from his nursery tank into his larger, original tank. This tank, however, does not have a liner nor any tests to determine where the clay layer beneath it is. Kamenz wonders why a liner was so important on the smaller tank when he can move all the manure from it into the untested bigger tank.

Approval delays cost money
Bryan Cook is Kamenz’s nutrient management consultant and owns Cropland Consulting. Cook says that while the Nutrient Management regulations have not changed since the Act came into effect in 2002, the time it takes to get approval has – and approval delays costs farmers money. “Eighty per cent of my time is spent on the legal portion now,” he says. Cook recommends farmers budget a 60-day window into their plans to get their nutrient management paperwork completed and approved in order to get their building permit on time.

Jim Arnold, nutrient management engineer with the Nutrient Management Branch of the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), is responsible for approving Nutrient Management Strategies. He says that new barns have required engineering tests for decades and that the requirements are the same for all sizes. He points out that Bill 81 requires engineers also to do a site characterization to determine where the water table is, where the bedrock is and the load-bearing capacity of the soil. It is important to have a second line of defence below liquid manure storage and to ensure that the percolation rate is reasonable, he says.

Has the NMA affected farm building costs? “Absolutely,” says Cook. Geotechnical engineering reports can run anywhere from $1,500 to $2,000. But the results of those reports can add big money to a project. If there is no layer of 15 per cent clay below the planned manure storage, the layer must be constructed or a liner purchased. But Cook does not think the regulations are excessive. “I think they are a good thing for the farmer’s own protection,” he says.

James Van Nes views NM regulations differently from Kamenz. He recently constructed a dairy barn to house 250 cows near Stratford. The main barn is 32,028 square feet, plus a parlour with special needs area that is 15,600 square feet. He has a liquid manure tank that holds 2.2 million gallons and a rotary parlour for 30 cows. The entire project cost $8,700 per cow, including barn, parlour, liquid manure tanks, hydro service and laneways. “The whole project was engineered and supervised,” says Van Nes.

When asked if the NMA affected his building costs, he replies: “We wouldn’t have done anything differently.” Van Nes was satisfied that nutrient management regulations helped him learn about how he should construct his project in order to lower the risk of having environmental problems later on.

He paid a consultant $8,000 for a Nutrient Management Strategy and Plan. Test holes revealed that the soil was too sandy and saturated with water for a manure pit as deep as they had planned. So they changed strategy. In addition to the main liquid manure tank, Van Nes now has a holding tank that is 110 feet in diameter and eight feet deep. This tank required a liner, which cost $15,000. “It makes sense,” he admits. “I don’t want a problem five or 10 years down the road. We are in this for the long run and the environment is important to us.”

Costs up 30 per cent
Tom Fritz, owner of Fritz Concrete near Chepstow and a pork producer, has been building pig barns for 25 years. Have government regulations resulted in increased building costs for farmers? “They sure have,” he replies without hesitation. Fritz estimates that construction costs have increased upto 30 per cent in the past three to four years and government regulations account for about half of that.

A study conducted by agricultural engineer Franklin Kains in 2003 looked at how costs would increase for liquid manure tanks to meet the new structural requirements under the NMA.
He found that, at that time, cost increases ranged from six to 60 per cent above what was commonly done before Bill 81 came into effect (see Figure 1).


In addition to conforming to the NMA, construction of agricultural buildings in Ontario must also meet the requirements of the Ontario Building Code, the National Building Code of Canada, Lightning Rods Act, Gasoline Handling Act, Pesticides Act, to say nothing of municipal by-laws. As these acts and regulations become tougher, ever-increasing costs are passed to the end user, the farmer.

While farm buildings are exempt from some parts of the Ontario Building Code, they must comply with the National Farm Building Codes, explains Will Teron, president of the Canadian Farm Builders’ Association and senior structural engineer with Tacoma Engineers.

The NMA received Royal Assent on June 27, 2002, and is there to protect Ontario’s surface and groundwater resources. While it replaces a patchwork of municipal regulations across the province, it also delves deeper into the way farmers conduct business than most municipal regulations did. 

But the act itself may not be to blame for the bulk of building cost increases. Increased standards imposed by the Ontario Building Code, updated in 2006, have resulted in significantly higher costs associated with building a barn. Some of these changes are driven by a demand for higher levels of protection for the environment and water resources.

Fred Groenestege is the owner of Fred Groenestege Construction Ltd., located near Sebringville. He has been building pig barns for 28 years and does not agree that the NMA is to blame for higher building costs, which he says have not changed a lot in the past year or two. 

“It is forcing good management practices on people, but still allows a common-sense approach,” Groenestege says. He argues that, for the most part, the NMA is helping identify and prevent problems before they happen, even if it pushes costs higher. He cites one example of a project he was involved with that was being built on a gravel base. This barn was required to put a liner in the manure tank, something that might have been overlooked before the NMA was in place.

Controversial concrete
Groenestege and Fritz agree that huge cost increases are coming at farmers in the form of other legislation, such as the Ontario Building Code changes. One of the biggest cost increases will come from the change in concrete required to construct manure tanks. In the past, tanks have been constructed using Type 10 concrete. The new Code specifies that Type 50 concrete be used. The biggest difference between the two is that Type 50 includes an additive that makes it sulphate-resistant and has been used mostly in heavy industrial applications, but this rating does not mean the concrete is stronger.  

Teron says that the requirement for Type 50 concrete does not have support from farm design engineers. When manure tanks are closed and not ventilated properly, sulphate in the manure causes the concrete in the tank to break down more rapidly. But this situation does not happen very often since most tanks have adequate ventilation. He says it solves a problem that happens one per cent of the time by imposing the solution on 100 per cent of designs.

There is also confusion among engineers, ready-mix providers and contractors about the new regulations regarding the type of cement in manure tanks, with some saying that the costs will rise substantially, some saying costs will stay the same, and some saying Type 50 concrete is simply unavailable in Ontario.

“The regulation is unacceptable,” says John Johnson, agricultural engineer with OMAFRA. “This was a requirement written by one person,” he snaps impatiently, adding that the appropriate research was not conducted and predicting that the regulation will be changed before the 2007 building season begins. Johnson says it is a complicated issue that is being blown out of proportion.

“The Ontario Building Code has always been there, but now individuals are being forced to build to the Code,” says Paul McCaig, project manager for Penfor Construction. The farm industry must now catch up to requirements that other industries have had to face for years. He agrees with Fritz that regulations have increased building costs, which he estimates have gone up by about 30 per cent since 2002. He says this increase is due in part to higher-priced inputs and increased regulations imposed by the Nutrient Management Act.

For example, where contractors used to place reinforcing steel every 30 inches throughout the concrete, now they are required to place it every 16 to 20 inches. There is also a requirement for stronger concrete, which means using more cement powder relative to aggregates. 

The total cost for a dairy barn can range from $6,000 to $11,000 per cow place, depending on the barn layout and the features a farmer wants, says McCaig. Electronics in parlour systems and activity monitors all make the price of the barn higher. Moreover, buildings tend to be bigger with improved ventilation, he notes. McCaig estimates that increased regulations have added up to $1,000 per cow place to the overall cost.

In addition to the concrete issue, Groenestege points to regulations around fire and electrical safety. Ontario’s building code specifies that compartments can be no larger than 50, 000 square feet. This means that larger barns, which are more common in the dairy industry, must have a wall across the structure. Electrical fires result in millions of dollars in damage in today’s large barns. As well as protecting human life, legislation also seeks to reduce the financial losses incurred when things go wrong.

More bells and whistles
Stephen Benedict, a senior account manager with Farm Credit Canada (FCC) who specializes in pork production issues disagrees that the NMA is having an impact on building costs. A few contractors have had to pour thicker walls and floors in order to comply with the NMA, but he says they should have been doing that anyway.  “Often the lowest priced barn isn’t the best,” he adds.

Benedict says costs are on the rise because farmers continually demand bigger, fancier buildings, not because of the NMA. “You probably could build a barn of the kind that was available in 1997 for the same money today, but nobody wants to. They all want a barn with more bells and more whistles,” he says. Ten years ago, automatic hog sorters were not even available. Now they are pretty much standard. “If you include two of those at $15,000 a piece into a 2,000-head finishing barn, that just raised the barn cost by $15 a hog space,” says Benedict.

Barns built today also have plastic walls inside and out, automatic feed systems, automatic medicators and more excavation and gravel. They tend to have four feed bins outside instead of two, says Benedict. “People are building much more fancy, much more high-tech and much more extravagant barns,” he says. They are doing this for a variety of reasons – to save labour, to reduce the spread of disease, to increase productivity or just to have a better working environment. “But I wouldn’t say the NMA dictated any of those costs,” he adds.

The trend towards more elaborate barns does not just exist in the pork sector, adds Benedict. Poultry and dairy barns are also getting more expensive with a higher level of technology. Having said that, Benedict points out that fewer farmers overall are constructing new facilities. “There is just not the optimism out there to expand and build.”

Fritz and Groenestege agree. Groenestege estimates his swine barn construction is down 50 per cent from two to three years ago, but building is still going on in the dairy and poultry industries. “I have never seen a downturn like this before,” he adds. In order to survive, he is turning to other agricultural sectors and commercial buildings, while Fritz says he now derives 90 per cent of his business from commercial buildings. “It has never been this bad for this long. The building business is really taking a beating,” he says.  However, both Teron, who engineers building designs, and McCaig say their business is up over this time last year. McCaig has seen an increase in dairy barns, but a decrease in swine barn construction. 

Sam Bradshaw, Ontario Pork’s environmental communications specialist, says that more stringent regulations have indeed increased costs to farmers. Anything with a liquid manure tank requires an engineer’s report, thicker concrete and, in many cases, a manure tank liner. 

“But some of these things are not a bad idea,” adds Bradshaw. While some of the regulations may be precautionary, Bradshaw points out that having an engineer on site throughout construction to ensure plans are followed correctly is a positive change. For the most part, Bradshaw says the NMA is reasonable but, overall, increasing regulations will play a role in causing some producers to exit the industry.

For his part, OMAFRA’s Jim Arnold concludes that nutrient management requirements help farmers avoid potential liability problems that can be horrendous. “These costs are a good form of insurance,” he says. “The increased costs due to nutrient management are really not an issue because it is due diligence for farmers. Most farmers want a measure of protection,” he adds. BF