Economic performance of long-term organic and conventional crop rotations in the Mid-Atlantic

Authors: White, Kathryn; Cavigelli, Michel; Conklin, Anne; Rasmann, Chris

Submitted to: Agronomy Journal
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 1/14/2019
Publication Date: 4/18/2019
Citation: White, K.E., Cavigelli, M.A., Conklin, A.E., Rasmann, C. 2019. Economic performance of long-term organic and conventional crop rotations in the Mid-Atlantic. Agronomy Journal. 111:1-13.

Interpretive Summary: While demand for organic grain is increasing, there is very little information about the economic consequences of switching from conventional to organic production to help guide farmers’ decisions. By evaluating the long-term economic performance of two organic and three conventional cropping systems at the USDA-ARS Farming Systems Project in Beltsville, MD, ARS scientists found that, while organic system grain yields were lower than those in conventional systems, organic system returns exceeded those of conventional systems due to premium prices for organic grains. Economic risk assessment found that a 6-year grain-perennial forage rotation was the least risky organic system, and that even without premium prices, production risks were comparable to the conventional cropping systems. These results will be of interest to farmers, policy makers, economists, and others interested in the economic performance of organic grain production systems.

Technical Abstract: Increased demand for organic grain in the US is resulting in increased production. However, no economic analysis in the US accounts for post 2005 increases in commodity prices and fuel and fertilizer costs. This analysis includes input costs, yields and net returns from the five cropping systems at the USDA-ARS Farming Systems Project in Beltsville, MD between 2006 and 2014. Costs for organic corn-soybean (Org2) and corn-soybean-wheat (Org3) rotations and a three-year conventional Chisel Till grain rotation were similar, but expenses in an organic six-year (Org6) corn-soybean-wheat-alfalfa rotation were higher due to the cost of managing an alfalfa crop. Tillage was a major contributor to total cost in the four tilled systems. Without price premiums, wheat was generally the only profitable organic grain crop. Consequently, the Org2 and Org3 rotations suffered losses in virtually all years without price premiums. However, Org6 performed similarly to Chisel Till because positive alfalfa returns offset grain crop losses. With premium prices, cumulative returns from Org6 ($7706) were similar to those from No-till ($6319) while returns for Org2 and Org3 ($5225 and $5287) were similar to those for No-till and Chisel Till ($4520). Among organic systems, economic risk was inversely proportional to crop rotation length. For Org6, risk without price premiums was comparable to the conventional systems; with price premiums risk was much lower, demonstrating that long, diverse rotations reduce overall risk, even in comparison to a conventional No-till system.