Fermentation of livestock manure for the production of biogas is not economically viable given current and prospective energy prices, as long as the residue from the fermentation process is used on agricultural land as a source of crop nutrients. An alternative use of the residue is to separate out the solid fraction for use as a source of protein and minerals for livestock. This alternative was evaluated for a commercial beef feedlot in Ontario, and was found to provide attractive returns using feed replacement values for the residue solids, even when a zero value was attributed to the biogas, and when real interest rates reached 7 percent. Economies of size were also found.