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Organic or Conventional Farming pt 4

County Agent News
Dan Folske
December 3, 2018

Organic or Conventional Farming (Continued)

            Comparing organic and conventional crop budgets is not quite as easy as you might think. Looking at a single year, single crop comparison is simple enough.Swather Gross Revenue equals yield times price. Land rent is the same, fixed cost on machinery aren’t going to change a lot. An organic producer is not going to have a sprayer unless he or she is doing compost teas, but an organic producer is more likely to have a swather and additional tillage equipment. Organic seed costs are higher but most organic producers in North Dakota do not use fertilizers or pesticides of any type (there are fertilizers and pesticides which are organic and can be used if needed).

            Using Excel spreadsheets from NDSU Extension which are published each year with some presumed average costs but  into which you can insert your own costs, yields, and prices, I pulled up some simple comparisons.  As published, the costs for machinery are similar but not the same for the two systems, I did not change those costs, nor did I change the estimated costs for seed, feretilizer, ,herbicides, etc. I did presume that land costs were the same for both budgets and entered local prices for both organic and conventional crops. I also used yields from the Carrington Research 2018 yield trials.

            Using Bolles Hard Red Spring Wheat with a conventional yield of 58.6 bu per acre and a market price of $5.17 per bu. Gives a market revenue of $302.96 per acre conventional compared to Organic Bolles HRSW at 26.1 bu/acre and a market price of $12.38/bu results in a market revenue of $323.12/acre. Organic expenses for fuel and seed are higher but taking out the commercial fertilizer, fungicides, and herbicides still leaves the organic production costs much lower. $210.15/acre conventional and $133.89/acre organic. Revenue minus expense gives us a “Return to labor & Management” of $92.81/acre conventional compared to $133.89/acre certified organic.

            Using a conventional flax yield of 34.2 bu/acre @ $9.75/bu = $333.45/acre market revenue. Organic flax yield or 16.7 bu/acre @ $24/bu = $400.80 /acre market revenue. As with spring wheat, conventional expenses were considerably higher than organic so “Return to labor & Management” came to $150.01/acre conventional and $255.35/acre for certified organic.

            One crop which is rarely grown by conventional producers because of marketing  and harvest difficulty is Rye. This is changing somewhat as some conventional producers are using it as a competitive cover crop. However they most often terminate is prior to planting a spring cash crop. A few organic producers call it a weed which they will not plant but most seem to use it somewhaer in their rotations, either as a weed competitive cash crop or a weed control cover crop that is either plowed down prior to planting a cash crop, or in some cases allowed to reach jointing before rolling it down with a crimper and no-tilling into the residue. I only had one year of conventional versus organic yield data at Carrington to use so you may want to be a bit skeptical about the yield numbers. I also had to use the estimated price in the published budgets as I could not find a local cash price for conventional rye. Using the same budget procedures I came up with a negative $10.09/acre “Return to labor & Management” for conventional rye, while organic rye had a positive $339.63/acre “Return to labor & Management”.

Those numbers look very much in favor of organic production however they do ot take into account the costs of certification, transitioning to organic, or the need for organic producers to give up a great deal of crop selection flexibility because much of their fertility and weed control is based on crop rotations. Raising clover or other crops as green plowdowns for both weed control and fertility are very common for organic producers. So while single year crop budgets are usually significantly in favor of organic production, a producer needs to look at a multiple year time frame to really compare the two systems.

 

 

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