Refers to human excrement used as fertilizer, a traditional practice in agriculture. The term is now largely historical or used in discussions of pre-modern farming.
During the Edo period, night soil was used as a valuable fertilizer.
Compound of 下 (しも, 'lower; excrement') and 肥 (こえ, 'fertilizer'). The reading こえ is a rendaku form of 肥 (こえ).