Organic Grain Farmers More Profitable

Study of Minnesota conventional farmer finds farmers would net an average $50 to $60 more per acre a year by going organic. Compiled by staff

Published on: Jul 31, 2006

Grain farmers could make more money be switching to organic grain crops according to a new study released at last week's American Agricultural Economics Association's annual meeting.

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. Organic alfalfa hay is too new to have a track record, so researchers recorded it as selling for the same price as conventionally grown hay.

Over four years the study analyzed both economic risks and transition effects of switching to organic farming of the Agricultural Research Service's Swan Lake Research Farm near Morris, Minn. The 130-acre Swan Lake farm is representative of typical corn-soybean farms in Minnesota.

ARS economist David Archer and soil scientist Hillarius 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. Strip tillage involves tilling only the middle of the seedbed. The scientists found that when strip tillage is used with organic farming, one of the transition risks is an increase in weeds until farmers learn to manage the system.

Computer simulations projected costs, yields and risks over a 20-year period, using yield and economic data from the four-year study, as well as crop price records of recent years.

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.