Featured Research

from universities, journals, and other organizations

Economic analysis reveals organic farming profitable long-term

Date:
September 1, 2011
Source:
American Society of Agronomy
Summary:
In an analysis of 18 years of crop yield and farm management data from a long-term trial, an organic crop rotation was consistently more profitable and carried less risk of low returns than conventional corn and soybean production, even when organic prime premiums were cut by half.

Organic farming is known to be environmentally sustainable, but can it be economically sustainable, as well? The answer is yes, according to new research.
Credit: Jacques PALUT / Fotolia

Organic farming is known to be environmentally sustainable, but can it be economically sustainable, as well? The answer is yes, according to new research in the Sept.-Oct. issue of Agronomy Journal. In an analysis of 18 years of crop yield and farm management data from a long-term University of Minnesota trial, an organic crop rotation was consistently more profitable and carried less risk of low returns than conventional corn and soybean production, even when organic prime premiums were cut by half.

Previous research has almost universally found the same thing: Organic farming practices can compete economically with conventional methods, says the current study's leader, Timothy Delbridge, a Univ. of Minnesota doctoral student in agricultural economics. However, these conclusions are mostly based on findings from short-term trials in small plots.

What sets the Minnesota study apart is both the large size of its experimental farm plots (165 feet by 92 feet) and the trial's longevity. "Doing an economic study like this, it's important to get as complete a picture of the yield variability as we can," Delbridge says. "So, the length of this trial is a big asset. We're pretty confident that the full extent of the yield variability came through in the results."

What gave organic production the edge wasn't higher crop yields, however; instead it was organic price premiums. In their absence, the net return from a 2-yr, conventional corn-soybean rotation averaged $342 per acre, compared to $267/ac for a 4-yr organic rotation (corn-soybean-oat/alfalfa-alfalfa), and $273/ac for its 4-yr conventional counterpart. When a full organic premium was applied, though, the average net return from organic production rose to $538/ac, significantly outperforming the conventional systems both in terms of profitability and risk. And organic production was still more profitable when the price premium was reduced by 50%.

Organic price premiums are often the main reason why farmers think about switching to organic production, Delbridge explains, which means they also often wonder what would happen if the premiums declined. It's for this reason that the researchers considered different premium levels (full, half, and none) in their analysis -- not because they necessarily expect the premiums to go away anytime soon, he notes.

The cost of production was also a factor: The conventional 2-yr rotation had higher production costs on average ($198/ac) than either the 4-yr conventional rotation ($164/ac) or the organic one ($166/ac). The difference primarily came in weed management, Delbridge says. The price of purchasing chemical herbicides in the 2-yr conventional rotation exceeded the cost of controlling weeds mechanically in the organic system, leading to higher overall production costs in the conventional rotation, even though organic production involved more field operations, Delbridge adds.

Delbridge cautions that the analysis relied on organic yields from an experimental trial that sometimes exceeded the average yields actually achieved by organic corn and soybean producers in Minnesota. It also didn't consider the overhead and fixed costs of farming. He's now involved in a second project that is comparing the economics of organic and conventional production in a whole-farm system.

More importantly, he adds, "What we're looking at here are results between an established organic and an established conventional system. This research doesn't take into consideration the issue of the transition itself: how difficult or costly that may be."

Still, if growers can successfully weather the transition, the study offers convincing new evidence that the change will be a lucrative one over the long haul.


Story Source:

The above story is based on materials provided by American Society of Agronomy. Note: Materials may be edited for content and length.


Journal Reference:

  1. Timothy A. Delbridge, Jeffrey A. Coulter, Robert P. King, Craig C. Sheaffer, and Donald L. Wyse. Economic Performance of Long-Term Organic and Conventional Cropping Systems in Minnesota. Agron. J., 103:1372%u20131382 (2011) DOI: 10.2134/agronj2011.0371

Cite This Page:

American Society of Agronomy. "Economic analysis reveals organic farming profitable long-term." ScienceDaily. ScienceDaily, 1 September 2011. <www.sciencedaily.com/releases/2011/09/110901093715.htm>.
American Society of Agronomy. (2011, September 1). Economic analysis reveals organic farming profitable long-term. ScienceDaily. Retrieved July 25, 2014 from www.sciencedaily.com/releases/2011/09/110901093715.htm
American Society of Agronomy. "Economic analysis reveals organic farming profitable long-term." ScienceDaily. www.sciencedaily.com/releases/2011/09/110901093715.htm (accessed July 25, 2014).

Share This




More Plants & Animals News

Friday, July 25, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Boy Attacked by Shark in Florida

Boy Attacked by Shark in Florida

Reuters - US Online Video (July 24, 2014) An 8-year-old boy is bitten in the leg by a shark while vacationing at a Florida beach. Linda So reports. Video provided by Reuters
Powered by NewsLook.com
Goma Cheese Brings Whiff of New Hope to DRC

Goma Cheese Brings Whiff of New Hope to DRC

Reuters - Business Video Online (July 24, 2014) The eastern region of the Democratic Republic of Congo, mainly known for conflict and instability, is an unlikely place for the production of fine cheese. But a farm in the village of Masisi, in North Kivu is slowly transforming perceptions of the area. Known simply as Goma cheese, the Congolese version of Dutch gouda has gained popularity through out the region. Ciara Sutton reports. Video provided by Reuters
Powered by NewsLook.com
Tyrannosaur Pack-Hunting Theory Aided By New Footprints

Tyrannosaur Pack-Hunting Theory Aided By New Footprints

Newsy (July 24, 2014) A new study claims a set of prehistoric T-Rex footprints supports the theory that the giant predators hunted in packs instead of alone. Video provided by Newsy
Powered by NewsLook.com
Bill Gates: Health, Agriculture Key to Africa's Development

Bill Gates: Health, Agriculture Key to Africa's Development

AFP (July 24, 2014) Health and agriculture development are key if African countries are to overcome poverty and grow, US software billionaire Bill Gates said Thursday, as he received an honourary degree in Ethiopia. Duration: 00:36 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

    Health News

      Environment News

        Technology News



          Save/Print:
          Share:

          Free Subscriptions


          Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

          Get Social & Mobile


          Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

          Have Feedback?


          Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
          Mobile: iPhone Android Web
          Follow: Facebook Twitter Google+
          Subscribe: RSS Feeds Email Newsletters
          Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins