Show me the Money The economic realities of organic farming. Tony Kleese Organicenterprises

Environment, energy, and economic comparisons of organic and conventional farming systems. Pimentel, D., Hepperly, P., Hanson, J., Douds, D., and R. Seidel Bioscience 55(7):  Soil organic matter higher in organic with multiple benefits  Labor is higher in organic but more evenly distributed over the year  Higher organic prices lead to net returns equal to or higher than conventional  Organic crop yields can equal conventional

Growers Can Make More Money by Going Organic By Don Comis USDA ARS July 25, 2006 Don ComisDon Comis  Four-year study by David W. Archer, an Agricultural Research Service (ARS) economist, and Hillarius Kludze, an ARS soil scientist, analyzing both economic risks and transition effects of switching to organic farming in Minnesota. David W. ArcherARSHillarius KludzeDavid W. ArcherARSHillarius Kludze  Compared an organic corn-soybean rotation and an organic corn- soybean-spring wheat/alfalfa rotation—half grown with conventional tillage and half with strip tillage—with a corn-soybean rotation using conventional tillage.  Records showed that organic crops fetched much more than conventional crops: soybeans, up to $14 more per bushel; corn, up to $3 more; and wheat, up to $5 more.  Another computer model projected that farmers would net an average $50 to $60 more per acre a year by going organic, even with the highest transition costs. The premium price advantage would outweigh the initial higher costs and possibly lower yields, even if organic prices were to drop by half.

American Society of Agronomy  Can organic cropping systems be as productive as conventional systems? The answer is an unqualified, “Yes” for alfalfa or wheat and a qualified “Yes most of the time” for corn and soybeans according to research reported by scientists at the University of Wisconsin-Madison and agricultural consulting firm AGSTAT in the March-April 2008 issue of Agronomy Journal.  In this research they found that: organic forage crops yielded as much or more dry matter as their conventional counterparts with quality sufficient to produce as much milk as the conventional systems; and organic grain crops: corn, soybean, and winter wheat produced 90% as well as their conventionally managed counterparts.

Soil Science Society of America Journal  Total and Labile Soil Organic Matter in Organic and Conventional Farming Systems, April 19, 2006  Review of nine studies shows strong soil organic matter gains despite cultivation for weed control.  Organic management enriched soil carbon and nitrogen in particulate organic matter by 30 to 40 percent relative to the conventional controls

Organic Price Index  tracks selected prices from the fruit, vegetable, herbs and grain sectors, comparing organic prices to conventional prices in markets across the country.  Prices for organic fruits and vegetables are provided by large wholesale distributors or sales agencies that specialize in organic fruits and vegetables.  Conventional prices for fruits and vegetables are gathered at the terminal markets by USDA AMS

Eastern Carolina Organics  Started under CFSA in 2004 with a grant from Tobacco Trust Fund Commission.  Launched as grower and manager owned LLC brokerage in  Coordinates production and distribution with 40+ growers across NC.  Data from 10/03/08 price sheet.  Price includes delivery to customer.  Grower receives 80%.

Week of September 30, 2008 Grade A red potato QtyCertifiedConv QtyCertifiedConv Philadelphia 50 # $ 47.00$20.00 San Francisco 50 # $ 48.00$18.50 ECO 50 # $ Price to grower$ 41.60

Week of September 30, 2008 Acorn Winter Squash QtyCertifiedConv QtyCertifiedConv Philadelphia 35 # $ 34.00$19.00 San Francisco 35 # $ 27.00$18.50 ECO 35 # $ Price to grower$ 29.60

Week of September 30, 2008 Zucchini QtyCertifiedConv QtyCertifiedConv Philadelphia 20 # n/a$20.00 San Francisco20 # $ 30.00$18.00 ECO 20 # $ Price to grower$ 23.20

Week of September 30, 2008 Green Beans QtyCertified QtyCertified San Francisco25 # $ ECO 25 # $ Price to grower$ 27.20

Average annual prices for organic fresh broccoli, U.S. farmgate level 2000 $ $ $ $ $ $16.44 ECO 2007$24.40

Organic Price Index Week of September 30, 2008 Feed Stock Grains Omaha Dallas Omaha DallasOmaha DallasOmaha Dallas Certified Conv Certified Conv Certified Conv Certified Conv Corn, #2 YellowCorn, #2 YellowPQ Bushel $11.00 $4.96 $11.00 $5.78 Corn, #2 Yellow Oats: Feed GradeOats: Feed GradePQ Bushel $5.50 na $5.50 na Oats: Feed Grade Soybeans: Feed StockSoybeans: Feed StockPQ Bushel $25 $10.14 $25 $9.49 Soybeans: Feed Stock Soybeans: Tofu TypeSoybeans: Tofu TypePQ Bushel $28 na $28.00 na Soybeans: Tofu Type Wheat: Hard RedWheat: Hard RedPQ Bushel $20.00 $6.52 $20.00 na Wheat: Hard Red

Price range to farmers from Eastern Carolina Organics (ECO) Broccoli $16 to $30 per 14 ct. case Tomatoes$17 to $28 per 20 # case Squash$9 to $26 per 20 # case Romaine Lettuce$18 to $31 per 24 ct. case Peppers$19 to $28 per 25 # case Sweet Potatoes$22 to $29 per 40 # case Butternut Squash$19 to $27 per 35 # case Yukon Gold Potatoes$28 to $39 per 50 # case

My Experience  Farm plans/business plans are essential to success and the organic certification process requires a farm plan.  Expenses/inputs are higher in the first 3 years but level off and decrease with soil improvement.  Grossing $10,000 to $20,000 per acre is very realistic for organic vegetable production. I have seen higher.  Net returns per 100 sq ft for organic crops in 2001 NC study ranged from $282 to $1.22.  It takes 3 to 5 years to get the system running well enough to make a good profit.

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