"Conversion is a learning process, not a fix for a failing conventional farm."In a forthcoming study to be published by Hanson, he found that family labor was about 30 to 40 percent higher in an organic mid-Atlantic grain operation than in a conventional one, but hired costs were equivalent between the two systems."If a farmer views his/her time spent on the farm in terms of its opportunity costs, e.g., what he or she could be earning off the farm, labor costs for organic farming are higher than conventional," said Jim Hanson, extension economist in the Department of Agricultural and Resource Economics at the University of Maryland. For example in humid areas, pest and weed control measures can raise costs."Looking beyond production and making decisions based on profitability and the bottom line makes good business sense," McCrory said.Finally, in a SARE-funded potato study in Idaho comparing 18 conventional and organic farms, the average material costs were lower in the organic and the labor costs higher, but overall there was no significant difference in fixed and variable costs.In fact, said Lisa McCrory, dairy technical assistance coordinator for the Northeast Organic Farming Association of Vermont (NOFA-VT), "organic dairy producers almost always reduce their production numbers, due to management changes such as feeding the animals less grain." And even though the price of organic grain is higher, other costs such as veterinary bills, fertilizer and labor decrease, improving net income.In cases where organic systems were more profitable without price premiums, it was generally due to lower production costs, higher net returns due to the types of crops in the organic systems, and better performance of the organic systems under drought conditions or in drier areas.Organic livestock systems often cost less, thus can be a viable option for beginning farmers or those who have trouble raising capital, because those systems do not require elaborate or expensive housing. Certified organic food. Moreover, they cut their debt-to-cow ratio in half.For many organic farmers, equivalent yields are not necessarily the goal. While more research is needed on the economics of transition, the long-term economic viability of established organic systems is quite positive. Organic farming systems are often more labor intensive because of increased time spent managing weeds and monitoring pests. In 2001, his organic corn and soybean yields were only 90 percent of conventional yields, yet the organic corn fetched $4.70 bushel compared to $2.10 for conventional. That’s way too much for radishes!” I understood what she meant (a visually similar bunch at the store goes for $0.69), but I wanted to tell her that these radishes were different, that $3 was actually a deep discount, that even selling them for $3 I was making no profit. Crop rotation.
Certified organic products are generally more expensive than their conventional counterparts (for which prices have been declining) for a number of reasons: Prices of organic foods include not only the cost of the food production itself, but also a range of other factors that are not captured in the price of conventional food, such as: Nonetheless, organic insect and mite control costs are lower than conventional in all cases except almonds ($452 vs. $307) with organic tomato and corn applying no insecticides or miticides. 4 Chart 5 Average milk receipts per cow (average for 2007-09) Source: EU-FADN It is not possible to carry the same comparison of yields and prices for the field crop sector as a whole, because organic and conventional farms may grow I harvested lettuces, herbs, mustard greens and kale that we proudly displayed at the market, taking home about $200. Instead, I smiled and said, “You haven’t tasted them yet!” She looked at me skeptically, but bought them anyway.Although my radish buyer’s words stung a little, I could relate to her reaction because I have it myself every time I shop at a farmers market. The soybean price disparity was even larger - conventional soybeans went for $3.80 per bushel, while organic livestock feed beans brought $10.50 per bushel and organic food grade beans $15 a bushel.
The equation food producers use to arrive at a retail price is often offset by subsidies (direct or indirect) and ignores broader costs that are ultimately not picked up by the consumer or the producer individually, but by all of us collectively.My second customer that day picked up a bunch of radishes and said, “Three dollars! Even now, after years of growing food (and seeing the labor and amendment costs that go into it), after managing a farmers market for seven years, my first reaction is still to the price, not the food’s true cost or value.