Economic Performance of Long‐term Organic and Conventional Crop Rotations in the Mid‐Atlantic

Abstract

Core Ideas Premium prices resulted in greater organic system returns despite lower yields. Perennial forage in extended rotation improves organic system economic performance. Perennial forage stabilizes returns, reducing economic risk. ABSTRACTIncreased demand for organic grain in the United States is resulting in increased production. However, no economic analysis in the United States accounts for post 2005 increases in commodity prices, fuel, and fertilizer costs. This analysis includes 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 (Zea mays L.)–soybean (Glycine max (L.) Merr.) (Org2) and corn–soybean–wheat (Triticum aestivum L.) (Org3) rotations and a 3‐yr conventional Chisel Till grain rotation were similar, but expenses in an organic 6‐yr (Org6) corn–soybean–wheat–alfalfa (Medicago sativa L.) rotation were higher due to the cost of managing an alfalfa crop. The conventional no‐till grain rotation production costs were lowest. Tillage was a major contributor to total cost in the four tilled systems. Mean returns from Org6 (US$858) were similar to those from No‐till ($702) while returns for Org2 and Org3 ($585 and $589) were similar to those for Chisel Till ($502). Among organic systems economic risk was inversely proportional to crop rotation length. The shorter organic rotations were more sensitive to changes in organic price premiums relative to Org6. At Org2 and Org3 breakeven price premiums the Org6 mean return would only be reduced by 32 and 37%, respectively, remaining similar to Chisel Till. For Org6 risk was much lower than the other organic and the conventional systems, demonstrating that long, diverse rotations reduce overall risk, even in comparison to a conventional No‐till system.