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

Abstract

AbstractInterest 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 US Department of Agriculture–Agricultural Research Service (USDA–ARS) Beltsville Farming Systems Project (FSP) from 2000 to 2005. The FSP is a long-term cropping systems trial established in 1996 to evaluate the sustainability of organic and conventional grain crop production. The five FSP cropping systems include a conventional, three-year no-till corn (Zea maysL.)–rye (Secale cerealeL.) cover crop/soybean (Glycine max(L.) Merr)–wheat (Triticum aestivumL.)/soybean rotation (no-till (NT)), a conventional, three-year chisel-till corn–rye/soybean–wheat/soybean rotation (chisel tillage (CT)), a two-year organic hairy vetch (Vicia villosaRoth)/corn–rye/soybean rotation (Org2), a three-year organic vetch/corn–rye/soybean–wheat rotation (Org3) and a four- to six-year organic corn–rye/soybean–wheat–red clover (Trifolium pratenseL.)/orchard grass (Dactylis glomerataL.) or alfalfa (Medicago sativaL.) rotation (Org4+). Economic returns were calculated for rotations present from 2000 to 2005, which included some slight changes in crop rotation sequences due to weather conditions and management changes; additional analyses were conducted for 2000 to 2002 when all crops described above were present in all organic rotations. Production costs were, in general, greatest for CT, while those for the organic systems were lower than or similar to those for NT for all crops. Present value of net returns for individual crops and for full rotations were greater and risks were lower for NT than for CT. When price premiums for organic crops were included in the analysis, cumulative present value of net returns for organic systems (US$3933 to 5446 ha−1, 2000 to 2005; US$2653 to 2869 ha−1, 2000 to 2002) were always substantially greater than for the conventional systems (US$1309 to 1909 ha−1, 2000 to 2005; US$634 to 869 ha−1, 2000 to 2002). With price premiums, Org2 had greater net returns but also greater variability of returns and economic risk across all years than all other systems, primarily because economic success of this short rotation was highly dependent on the success of soybean, the crop with the highest returns. Soybean yield variability was high due to the impact of weather on the success of weed control in the organic systems. The longer, more diverse Org4+ rotation had the lowest variability of returns among organic systems and lower economic risk than Org2. 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 in the organic 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. With no organic premiums, present value of net returns for the full rotations was greatest for NT in 4 of 6 years and greatest for Org4+ the other 2 years, when returns for hay crops were high. Returns for individual crops and for full rotations were, in general, among the lowest and economic risk was, in general, among the highest for Org2 and Org3. Results indicate that Org4+, the longest and most diverse rotation, had the most stable economic returns among organic systems but that short-term returns could be greatest with Org2. This result likely explains, at least in part, why some organic farmers in the mid-Atlantic region, especially those recently converting to organic methods, have adopted this relatively short rotation. The greater stability of the longer rotation, by contrast, may explain why farmers who have used organic methods for longer periods of time tend to favor rotations that include perennial forages.