The economic realities of organic farming

1. Show me the Money
The economic realities
of organic farming.
Tony Kleese
The Earthwise Company
www.earthwiselife.com

2. Environment, energy, and economic
comparisons of organic and
conventional farming systems.
Pimentel, D., Hepperly, P., Hanson, J., Douds, D., and
R. Seidel. 2005. Bioscience 55(7): 573-582.
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

3. Growers Can Make More Money
by Going Organic
By Don Comis USDA ARS July 25, 2006
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.
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.

4. 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.

5. 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

6. www.rodaleinstitute.org
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

7. 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 2005.
Coordinates production and distribution with
40+ growers across NC.
Data from 10/03/08 price sheet.
Price includes delivery to customer.
Grower receives 80%.

8. Week of September 30, 2008
Grade A red potato
Qty Certified Conv
Philadelphia 50 # $ 47.00 $20.00
San Francisco 50 # $ 48.00 $18.50
ECO 50 # $ 52.00
Price to grower $ 41.60

9. Week of September 30, 2008
Acorn Winter Squash
Qty Certified Conv
Philadelphia 35 # $ 34.00 $19.00
San Francisco 35 # $ 27.00 $18.50
ECO 35 # $ 37.00
Price to grower $ 29.60

10. Week of September 30, 2008
Zucchini
Qty Certified Conv
Philadelphia 20 # n/a $20.00
San Francisco 20 # $ 30.00 $18.00
ECO 20 # $ 29.00
Price to grower $ 23.20

11. Week of September 30, 2008
Green Beans
Qty Certified
San Francisco 25 # $ 30.00
ECO 25 # $ 34.00
Price to grower $ 27.20

12. Average annual prices for organic
fresh broccoli, U.S. farmgate level
2000 $14.19
2001 $12.33
2002 $16.94
2003 $17.31
2004 $14.66
2005 $16.44
ECO 2007 $24.40

13. www.newfarm.org
Organic Price Index
Week of September 30, 2008
Feed Stock Grains
Omaha Dallas
Certified Conv Certified Conv
Corn, #2 YellowPQ Bushel $11.00 $4.96 $11.00 $5.78
Oats: Feed GradePQ Bushel $5.50 na $5.50 na
Soybeans: Feed StockPQ Bushel $25 $10.14 $25 $9.49
Soybeans: Tofu TypePQ Bushel $28 na $28.00 na
Wheat: Hard RedPQ Bushel $20.00 $6.52 $20.00 na

14. 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

15. 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.

16. Resources
www.attra.org
www.carolinafarmstewards.org
www.easterncarolinaorganics.com
www.growingformarket.com
www .ofrf.org
www.rodaleinstitute.org