‘Green waste’ recycling grows, profits remain elusive
Northern Nevada Business Weekly
Tom Donovan walks a tightrope as he tries to decide if a commercial composting operation makes financial sense in northern Nevada.
Trucks filled with grass clippings and tree trimmings empty their loads into bins at the family-owned RT Donovan Co. Inc. at the north side of Spanish Springs.
More material for composting arrives in trucks from Castaway Trash Hauling, which picks up produce-department waste from Walmart and Scolari’s stores and restaurant waste from the Great Basin Brewery location in Reno.
Waste Management, meanwhile, picks up organic wastes from Whole Foods Market and several restaurants in the area, delivering them for composting at Full Circle Compost at Minden as well as RT Donovan Co. Everyone feels good about keeping material out of the Lockwood Regional Landfill.
But Donovan, one of the fellows who needs to figure how to turn a feel-good story into a profit, has been learning that there’s little margin for financial miscalculation in the composting business.
On one side, RT Donovan Co. is hemmed in by tipping fees at the Lockwood landfill that are among the lowest in the nation – about $7.50 a ton for Nevada waste from commercial haulers. That limits Donovan’s ability to generate revenues from disposal fees.
“You have to be cheaper than the transfer station or the dump. It’s so cheap just to throw something away,” says Donovan. He charges $5 a cubic yard, with a minimum charge of $10, to commercial operators and homeowners who bring organic wastes for composting.
On the other side of the equation, abundant supplies of freshly made compost in California – where state law requires diversion of organic materials out of the waste stream and into composting operations – keep a lid on the price Donovan can charge for finished compost.
The company is selling compost at $34 a cubic yard this summer to homeowners and landscapers as mulch or a high-nutrient amendment to northern Nevada’s poor soils.
If he sets the price much higher, Donovan figures that high-volume producers of compost in California could justify the costs of trucking material over the Sierra.
The natural shrinkage of composted material adds another wrinkle to Donovan’s calculation. Every 10 yards of organic material that comes in the front gate will be reduced to four yards of fluffy compost within six weeks or so.
While the financial fundamentals of the composting business create a tight squeeze for Donovan, he figures that he has a couple of competitive advantages as well.
For one, RT Donovan Co. Inc. has been in the landscape materials business for more than 50 years. It’s already paid for much of the heavy equipment used in a composting operation, and it’s got available space at its facilities along the east side of Pyramid Highway.
Even more important, Donovan says his company is mastering the art of injecting air into piles of aerobic material, keeping microbes at work inside the piles at temperatures of about 160 degrees.
That temperature sterilizes the compost and kills weed seeds, and the steady aeration of the piles allows creation of compost from organic waste in as little as six weeks.
“That’s what is going to allow us to play in this game,” Donovan says. And while RT Donovan nails down its compost-making systems, it’s looking for new material to add into the stream. The Reno Rodeo delivered used hay and wood shavings from its stalls for composting. Stacks of burlap bags arrive from a coffee-roasting facility. Broken pallets are ground into small pieces, and their nails are removed prior to composting.
Steve Duque, operations manager for Castaway Trash Hauling, says his company hopes to see more restaurants follow the lead of Great Basin Brewing with waste-recovery programs.
“We see restaurants as a great growth opportunity for Castaway,” he says. The Green Restaurant Association estimates that organic materials that potentially could be recycled account for 24 percent of a restaurant’s waste stream.
But Tom Young, owner of Great Basin Brewing Co., notes that recycling organic wastes adds to a restaurant’s costs, and he quips, “You have to spend some green in order to be green.”
Justin Caporusso, a spokesman for Waste Management in Sacramento, says his company believes that recycling organics currently is an environmental rather than an economic decision.
Donovan, who isn’t entirely convinced yet that composting is a plausible business in northern Nevada, agrees that successful recycling programs require an environmental commitment.
“It can’t be based on economics alone,” he says. “Individuals have to make a decision that they don’t want to bury stuff in the landfill.”