They don't put up road signs here that boast, "Hereford, Tex. -- Home of the World's Biggest Pile of Cow Dung." But they could.

This Texas panhandle community is the cattle feed-lot capital of the world, and one of the things that happens when 25 pounds of grain go into a cow each day is that 10 pounds of manure come out -- each day.

Over the years, dozens of manure mountains have popped up next to the feed lots. The granddaddy of them all -- some 10 years in the making -- stands 60 feet high, half-a-dozen acres wide and 650,000 tons thick and is hard enough to support a truck. Mercifully, it's long since lost its odor.

Even so, the piles are a nuisance and a growing expense. Feed-lot owners spend as much as $250,000 a year cleaning out pens and stockpiling manure.

"For years we've been waiting for some white knight to bound onto the scene and figure out something useful to do with the stuff," said Bob Josserand, president of AzTx Cattle Co., whose lot feeds 50,000 head of cattle at a time. "I keep threatening to turn mine into a ski slope."

The wait is over. Construction is set to begin in March on an $80 million power plant that will convert the manure into electricity.

If all goes as planned, by 1987 it and an identical plant to be built 100 miles north of here will provide enough power to meet the electricity needs of 100,000 homes in Austin -- whose city-owned utility company has contracted to buy all the electricity the plants can produce.

The white knight is Edwin Cox Jr., a Dallas multimillionaire oil and cattle man whose passion is conservation. "Ever since I bought my first feed lots in 1974 , I've been convinced there was some value to the manure," Cox said. "And I've been determined to find it."

Cox and the other feed-lot operators here once sold manure as fertilizer to local farmers, and some still do. But it is of marginal value in the soil of the panhandle, and besides, with 5 million head of cattle being fed in this area each year, there's simply too much manure for the farmers to use.

"I used to be able to get 50 cents a ton from the farmers," said Ed Barrett, manager of the Barrett-Crofoot feed lot. "Now I've got to pay at least that much to them to haul it away."

Cox tried everything he could think of -- bagging the manure and selling it as compost, converting it into methane gas, methanol or ethanol -- "but we never could get the economics to work out," he said.

"Finally, one day we got back some lab tests on the manure, and I saw it had a BTU British Thermal Unit value of 4,200 a pound, which is about the same as we have in East Texas lignite," which is burned like coal in parts of the state, he said. "I knew right then we were in business."

Better still, Cox, who is chairman of Texas' Parks and Wildlife Commission, found that manure is low in toxins and sulfur, so burning it poses no environmental threats.

To get financing for his plants, he needed to line up a customer for the electricity. Austin, which has the reputation of being the most progressive city in the state, had just passed a resolution committing itself to obtaining a portion of its electrical power from renewable sources.

It was a perfect match. The city utility's customers will assume none of the risk of construction, and they will buy the power for roughly what they are paying to get it from their existing natural gas and coal plants.

"The only risk we're taking is, if somehow the project doesn't fly, we're out a power supply that we're now counting on," said Laura Doll, manager of policy planning for the City of Austin Electric Utility. At capacity, the two cow-power plants will give Austin, a growing city of 400,000, 5 percent of its electric supply.

No one has ever built a cow-power electric generating plant before, but project manager William Metcalfe Jr. says there is nothing the slightest bit unconventional about the technology.

The manure will be burned by a process using what is called a recirculating fluidized bed. A bed of ash will be made to behave like a fluid by passing currents of air through it. The manure will be fed into the hot bed, and the resulting heat will be used to make steam to turn a turbine generator.

Cox's company, Valley View Energy Corp., has entered into long-term contracts with a dozen feed-lot operators in the Hereford area to purchase up to 1,900 tons of manure a day. Plant capacity will be 1,600 tons a day. All of the feed lots are within 30 miles of the plant.

"One of the reasons this project can work here is the heavy concentration of lots in a small area," said Cox. "Low transportation cost is a key to the whole deal."

Under the contracts, Cox's company will come into each feed lot once or twice a year with front-end loaders and clear out the manure. The daily manure production of seven cows will wind up meeting the daily electric needs of a typical Austin home.

The citizens of Hereford are delighted with the prospect of 85 new plant jobs; they're thrilled that an old nuisance is about to be disposed of and they're tickled by the idea that their manure is going to be shipped through power lines to the state capital.

"People send all kinds of strange things down to Austin," said Dudley Bayne, the city manager. "The only thing we regret is we're sending ours in such a nice finished form."