Organic Agriculture …… Making the transition… Craig Chase, Field Specialist Farm & Ag Business Management

Yields by Crop and Rotation

Production Costs by Crop & Rotation

Returns to Land & Management Prices: $4.50, $10.50; $9.25, $17.60, $4.00, $95

Bottom Line If managed properly, organic rotations: Are more profitable. Allow farmers to farm a smaller land base. Offer beginning/limited resource farmers an opportunity to farm. Allow more farmers to reside in rural Iowa supporting local communities. Note: “Economic Analysis of Three Iowa Rotations” (ISU pub #PMR-01) will be coming out soon.

Organic Transition Economics Step 1: develop a transition production plan… Example – You inherited a 240-acre farm. It is currently in a corn-soybean rotation. You want to transition into organics. You decide to transition field-by-field.

Field Plan For simplicity, Assume you can divide the 240 acres into 4, 60-acre fields. And you will be producing conventional and transitioning crops on the same farm.

Field Plan Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Field 1 Conv Corn Conv Sb Trans Oats Trans Alfalfa Field 2 Organic Corn Field 3 Organic Sb Field 4 Organic Oats

Questions… What are the issues/concerns with a field-by-field transition? Do you think the issues/concerns are manageable?

Field-by-Field Transition You have your field plan, but will it be profitable? Step 2: To determine profitability, let’s shift to a budget-driven decision tool… (keep in mind this is a test model…)

Field-by-Field Transition Results Step 3: Evaluate - Is it profitable to transition to organics from conventional agriculture? Were you surprised by the result? Why do you think it was profitable during the transition period?

Whole-Farm Transition What are the issues/concerns with a whole-farm transition? Do you think the issues/concerns are manageable? (think about how)

Field Plan What would your field plan look like? Would you go into all oats or try to start the rotation immediately? What changes would need to be made to the budgets for a whole-farm transition?

Whole-Farm Transition Let’s put your assumptions into the decision tool and see what happens… So what happened? How profitable? What risks were involved? Which transition made more sense to you?

Thank You for This Opportunity! Questions….. Any questions or comments? Thank You for This Opportunity! Craig A. Chase Farm Management Field Specialist 720 7th Avenue SW Tripoli, IA 50676 (319) 882-4275 cchase@iastate.edu