Craig A. Chase, Farm & Ag. Business Management Field Specialist, Northeast Area
The agricultural industry in Iowa is dominated by commodity production. Historically, the narrow profit margins forced farm businesses to grow in assets, output, and labor income to remain profitable. Farmers unable or unwilling to grow have had to look to higher margin alternative crops such as organics. Organic production has grown steadily for several years due to increasing consumer demand. However, because of current high commodity grain prices many producers believe organic production is no longer competitive with commodity agriculture.
Iowa State University Extension has responded to this misunderstanding a number of ways. First, an organic transitioning course is being offered in the spring semester of 2008 for on- and off-campus students, as well as adult non-credit learners. Second, a presentation was developed and presented at several workshops around Iowa. Third, an extension bulletin (with an accompanying spreadsheet tool) is under development outlining the economics of organic transitioning. The key point of the workshop information is that although commodity prices are at historic levels, a well-managed organic farm is still more profitable on a per-acre basis than a well-managed conventional farm. The rest of the workshop and/or classes focused on best management practices to go through the transition process. Because of the current high commodity grain prices, there has never been a better time economically to transition into organics.
A common comment from students and workshop attendees was surprise the organic system is still more profitable than conventional systems given current commodity prices. Misunderstandings regarding organic certification, labor requirements, and production costs were prevalent. Specific questions on transitioning practices were common following the meetings and increases in requests for additional information are occurring. Based on the number and types of questions asked, it is apparent that knowledge and awareness increased among class and workshop participants.
ISU Extension is looking at the profitability of organic and best management practices during the organic transitioning period. With added information, existing and potential commodity producers can make informed decisions regarding whether organic crops should be grown given the potential risks and rewards. If interested in learning more about economics of organic crop production, contact Craig Chase at 319-882-4275 (firstname.lastname@example.org).
April 10, 2008
127 Alternative enterprises or value retained
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April 15, 2008
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