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Look for markets before leaping into organics
The Farm Progress show might seem an odd place to set up a
booth on organic farming. The Varied Industries Tent is a bastion of the latest
technology for conventional agriculture. Several farmers were looking at a
high-capacity anhydrous ammonia pump at the JBI Enterprises booth.
At the booth rented by Midwest Organic & Sustainable Education
Service, or MOSES, Jeff Gunderson sits quietly. But first appearances can be
deceiving. A signup sheet for more information shows about a half-dozen farmers
interested in organic production.
“It’s steady interest. It’s been a little slow this morning
but people still remain interested,” says Gunderson, a technical specialist for
MOSES who earlier in his career spent several years working as an organic
farming research specialist at North Dakota State University.
Gunderson has statistics to back him up. A 2008 organic
production survey by USDA found 14,540 organic farms and ranches in the U.S. Iowa,
Minnesota and Wisconsin rank in the top 10 states with organic farms. MOSES’
own conference in LaCrosse, Wisconsin drew 2,700 farmers last February.
The 2007 Census of Agriculture also showed higher net cash
income for organic farms -- $45,697 a year, compared to the average for all
farms of $25,448.
But getting there isn’t easy. Farms that make the transition often see a decline in yields
but they can’t sell in the organic market until fields have been chemical–free
for three years.
Gunderson says he gets lots of questions about making that
switch, on how to control weeds and insects.
“Generally, most organic farmers will tell you insect pests
and diseases are not a problem if you have healthy soils, but weeds are a
problem,” he says.
Many farmers have made the switch by converting only part of
their farm to organic crop rotations at first, he says.
“The more biologically active your soils are before you
begin that transition, the better off you’ll be,” he says.
You can start by building up organic matter in the soils
with cover crops that are a mix of grasses and legumes, he says.
On its website, MOSES offers fact sheets on transitioning to
organic crop production and to organic dairying.
MOSES also coordinates mentoring for farmers interested in
making the switch. Established organic farmers visit those of the novices to
The technical challenges aren’t the only ones for organic
farmers. Even with higher prices for organic crops and the potential for a
higher net income, business planning is essential.
“A lot of questions we get initially, and one that people
should be thinking about is, ‘Where do you market your crops?’ ” Gunderson
says. “The infrastructure isn’t the same. Do your homework.”
That’s a little easier than it used to be.
USDA’s Agricultural Marketing Service now publishes biweekly
reports on organic crop prices in the Upper Midwest and the Eastern Corn Belt.
And the August 25 report shows that premiums aren’t as high
as you might expect for corn, with prices for organic yellow feed corn ranging
from $4.25 to $5 a bushel. Food
grade soybeans bring $18 to $19.50 a bushel and feed grade beans sell for
$15.50 to $17.25.
The recession has hit prices for organic foods, says Oren
Holle, president of OFARM, the
Organic Farmers Agency for Relationship Marketing. OFARM is a coalition of
organic grower groups that shares market information in an effort to gain fair
prices for its members.
“It’s a pretty dismal picture right now,” Holle says about
organic grain prices.
Consumer demand for organic foods has continued to grow during the recession, but not at the
double digit rates when the economy was stronger.
Demand for organic milk is up 5% or less in the past year,
Holle says, and large organic milk businesses have put growers on a quota of
milk deliveries. Dairies shifted to more grass production, too. The quotas now are
in the process of being lifted, Holle says.
“We’re probably going to see some stepping up again of grain
feeding on dairy farms as pastures begin to dwindle,” he says.
Even after farmers go through the transition to organic
production, corn yields are less than the conventional yields, Holle says. They
might be 85% of conventional yields.
That makes the breakeven price for corn higher.
“The number we hear from the growers is somewhere in the $7
to $7.50 range,” Holle says.
Holle says that soybean yields are closer to those of
conventional soybeans, although some organic farmers believe the yield
potential of organic soybean seed hasn’t kept up with conventional GMO seeds.
Organic producers in most cases have to plant non-GMO organic seeds.
Many organic farms are smaller than conventional farms, but
Holle says that, too, seems to be changing among organic grain farms. Holle estimates that 30% of organic
farms might produce 60% of the organic food and that larger organic grain farms
might be about 3,000 acres in size.
“These operations keep growing,” he says. “They’ve figured
out how to do it on a larger scale.”
Find more information on OFARM here.