Concerns about nutrient loads into our waters have focused attention onpoultry litter applications. Like many states with a large poultry industry,Georgia recently designed a subsidy program to facilitate the transportationof poultry litter out of vulnerable watersheds. This paper uses atransportation model to examine the necessity of a poultry litter subsidy toachieve water protection goals in Georgia. We also demonstrate therelationship between diesel and synthetic fertilizer prices and the value ofpoultry litter. Results suggest that a well-functioning market would be ableto remove excess litter from vulnerable watersheds in the absence of asubsidy.