Study: Organic makes economic sense for grain farmers
November 28th, 2011
By Kathleen Masterson
Iowa – Organic farming in the Midwest remains a small portion of the farming industry, even as demand for organic products has grown. But a new study shows that some farmers might be missing out. Organic grain crops bring in significantly more cash per acre than their conventional counterparts.
Organic grain crops bring in about $200 more per acre than their conventional counterparts, according to a study from Iowa State University. And that’s after taking into account labor, land and production costs. This is largely because over the past 15 years, organic corn/soybean prices have been consistently higher than conventional, Iowa State researcher Kathleen Delate said.
“In general it’s been twice, sometimes three times as high,” she said.
Iowa State’s 13-year study which compared 44 organic and conventional plots, each with the identical crop variety and rotation also found organic crops yielded as much grain or more per acre than conventional plots.
That doesn’t surprise Daniel Rosman, who said his father quit using pesticides and chemical fertilizers on the family’s farm in Harlan, Iowa, in the 1980s.
“For him it started out as an economical decision, but he has always been a good steward of the land. So there was, multiple reasons. And he found early on that he was already making more money, and having the same yields,” Rosman said.
Still, organic farming in the Midwest remains a small portion of the farming industry, even as demand for organic products has grown.
Organic requires a significant investment of labor and time. Because farmers can’t use pesticides, they often end up doing more tilling to churn up weeds. That’s true for Aaron Lehman, of Polk County, Iowa, who is converting about one-third of his 650 acres of corn and soybean to organic.
“It is many more passes over the field. There’s a lot more management, there’s a lot more labor,” he said, but noted that the higher return per acre higher more than compensates for that.
It takes three years to convert conventional fields to organic because farmers are required to wait until chemicals previously used are out of the system. So Lehman won’t get the premium price for his crops until they’ve been certified.
He said part of the reason he’s trying organic is for the environmental benefits.
In fact, the Iowa State study found that organic practices noticeably improved soil quality. The organic soils had 33 percent more of the nutrient nitrogen, and researchers also measured higher concentrations of carbon, potassium, phosphorous, magnesium and calcium as compared to the conventional fields just 30 feet away.
Organic crops must be grown from organic or non-genetically modified seeds, without chemical pesticides and without synthetic fertilizer. That’s why many organic row crop operations like the Rosman farm also have livestock, so they can use the manure as a natural fertilizer.
Ellen Walsh, Daniel Rosman’s wife, said the organic movement needs younger farmers, who might not have much capital.
“I think it’s more appealing for younger farmers to go the organic route because the inputs are so low,” she said. “You’re going to have high labor, but you’re not spending all this money on the implements to apply chemicals (and the) chemicals themselves.”
Even as overall levels of organic farming remain small in the Midwest and the nation, it has been one of the fastest growing segments of U.S. agriculture for over a decade.
Congress passed the Organic Foods Production Act in 1990, and when the USDA implemented national organic standards in 2002, organics saw another boost. Between 2002and 2008, organic cropland acres increased an average of 15 percent annually. Iowa now has more than 100,000 organic acres, but it’s still less than one percent of Iowa farmland.
But demand for organic products continues to be strong, said grain buyer Tim Daley of Stonebridge Ltd., a grain dealer based out of Cedar Falls, Iowa. And this year it was tougher to find organic grains.
“We saw a large amount of organic acres go out of production also because of the increase in conventional grain prices,” he said.
No wonder, then, that farmers and industry experts say it’s become easier for farmers to find a buyer for their organic grains. Some grain millers even send a truck to farmers to pick up the cash crop.