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United States Department of Agriculture

Agricultural Research Service

Title: Long-term economic performance of organic and conventional field crops in the mid-Atlantic region

Authors
item Cavigelli, Michel
item Hima, Beth - SOCIAL SECURITY ADMIN.
item Hanson, James - UNIVERSITY OF MARYLAND
item Teasdale, John
item Lu, Yao-Chi - RETIRED USDA-ARS

Submitted to: Renewable Agriculture and Food Systems
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: March 23, 2009
Publication Date: May 27, 2009
Repository URL: http://hdl.handle.net/10113/32219
Citation: Cavigelli, M.A., Hima, B.L., Hanson, J.C., Teasdale, J.R., Lu, Y. 2009. Long-term economic performance of organic and conventional field crops in the mid-Atlantic region. Renewable Agriculture and Food System. 24:102-119.

Interpretive Summary: Interest in organic grain production is increasing among farmers and agricultural professionals but there is limited information regarding the economic performance of organic grain and forage production in the mid-Atlantic region. We studied the economic performance of five cropping systems, with and without organic price premiums, at a long-term research site in Beltsville, Maryland. Two of the cropping systems were conventional systems, one that used chisel tillage (CT) and the other that used no tillage (NT). The other three were organic cropping systems that had different crop rotation lengths and complexity: a two-year rotation, a three-year rotation, and a four- to six-year rotation that included hay (Org4+). Production costs were, in general, greatest for CT while those for the organic systems were similar to or slightly lower than those for NT. Net returns were greater and risks were lower for NT than for CT. When conventional prices were used economic returns for the organic systems were generally lower than those for the conventional systems due to generally lower yields in the organic systems. An exception to this result is that returns for corn in Org4+ were equal to or greater than those in NT in four of six years. When organic price premiums were obtained for organic crops, returns for organic systems were almost always substantially greater than for the conventional systems. Results indicate that organic grain crop production can outperform conventional systems in the mid-Atlantic region when organic price premiums are received and can be competitive with conventional systems when hay is incorporated into the rotation when no premiums are received.

Technical Abstract: Interest in organic grain production is increasing in the United States but there is limited information regarding the economic performance of organic grain and forage production in the mid-Atlantic region. We present the results from enterprise budget analyses for individual crops and for complete rotations with and without organic price premiums for five cropping systems at the USDA-ARS Beltsville Farming Systems Project (FSP), a long-term cropping systems trial established to evaluate the sustainability of organic and conventional grain crop production. The five FSP cropping systems include a conventional no-till corn (Zea mays L.)-soybean (Glycine max (L.) Merr)-wheat (Triticum aestivum L.)/soybean rotation (NT), a conventional chisel-till corn-soybean-wheat/soybean rotation (CT), a two-year organic corn-soybean rotation (Org2), a three-year organic corn-soybean-wheat rotation (Org3), and a four- to six-year organic corn-soybean-wheat-hay rotation (Org4+). Production costs were, in general, greatest for CT while those for the organic systems were similar to or slightly lower than those for NT for all crops. Net returns for individual crops and for full rotations were greater and risks were lower for NT than for CT. With no organic price premiums, economic returns for corn and soybean in the organic systems were generally lower than those for the conventional systems due to lower grain yields and therefore revenue in organic than conventional systems. An exception to this pattern is that returns for corn in Org4+ were equal to or greater than those in NT in four of six years due to both lower production costs and greater revenue than for Org2 and Org3. Present value of net returns for the full rotations was greatest for NT in four of six years and greatest for Org4+ the other two years, when returns for hay crops were high. Returns for individual crops and for full rotations were almost always among the lowest and economic risk was almost always among the highest for Org2 and Org3. When organic price premiums were obtained for organic crops, returns for full rotations for organic systems (US$539 to 745 ha-1) were almost always greater than for the conventional systems (US$190 to 277 ha-1). With price premiums, Org2 had the greatest net returns but also had the greatest variability of returns and economic risk across all years, primarily because economic success of this short rotation was highly dependent on the success of soybean, the crop with the highest returns. The longer, more diverse Org4+ rotation had the lowest variability of returns and lower economic risk than Org2. Based on risk-aversion and potential long-term soil benefits Org4+ may be the more desirable rotation.

Last Modified: 10/1/2014
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