(FORTUNE Magazine) – Here's a little-known fact about hogs: They produce ten times the amount of waste humans do--800 pounds per year, to be exact. Why worry about that kind of volume? Because the EPA is about to crack down on manure--and that has many farmers fretting.

The Feds are targeting the nation's nearly 40,000 concentrated animal-feeding operations, or CAFOs--giant factory farms that are briefly home to thousands of hogs, cattle, or chickens prior to slaughter. "Wastes from large factory farms are among the greatest threats to our nation's waters and drinking water supplies," the EPA declared in announcing the new program. Tons of manure are stored outdoors to be used eventually for fertilizer. Not only does the stuff seep into water supplies, it also smells horrible. (One Minnesota tax assessor factors in a property's proximity to CAFOs when setting market values--locals have dubbed it the "smell-location chart.")

Concerns about water pollution prompted the EPA to enter the fray. Currently most CAFOs are governed by state regulations, but the EPA is hammering out uniform federal standards that are expected to be issued by year-end. Although still being fine-tuned, the rules will treat the concentrated animal-feeding operations like any other industrial waste generator and require owners to obtain discharge permits under federal clean water laws.

The CAFO industry, to say the least, is not pleased--the new rules will cost farmers between $850 million and $940 million per year. "It's not like there is a smokestack that you can put a scrubber on and address the issue," says Charlie Arnot of Premium Standard Farms, the nation's second-largest pork producer. After running afoul of pollution regulators last year, Premium agreed to pay $1 million in state and federal fines, and it is now spending another $25 million to build mini-sewage treatment plants at its CAFOs.

Even without the impending regulations, producers have begun to acknowledge that there is just too much manure and not enough places to put it. On Virginia's Eastern Shore, Tyson is building a $12 million gasification plant that will treat 82,000 tons of chicken litter per year. Last summer Perdue Farms opened a $12 million processing plant in Delaware that converts chicken litter into lollipop-sized pellets that are then shipped to areas of the country in need of fertilizer. Both plants are intended to reduce pollution of groundwater and of nearby Chesapeake Bay. In addition, growers are testing feed additives like zeolite, a mineral that absorbs liquids as well as nitrogen and phosphorus and helps to solidify the manure. When the zeolite-manure mix is applied to the soil, the chemicals are slowly released. All this may not solve the manure mess entirely, but at least it should improve scoring on the smell-location chart.