Bring our Organic Acres Home

By Nate Powell-Palm, Training Specialist with OATS

Published March 12, 2022

Agriculture Secretary Tom Vilsack announced on February 7th that the USDA will invest $1 billion to, “support America’s climate-smart farmers, ranchers, and forest landowners.” Certified organic farming is an all-encompassing solution to reverse agriculture’s effects on climate change, but was not mentioned as a climate-smart farming solution. Not only does organic farming sink carbon, but it also brings new farmers to the land, and makes existing farm businesses viable again.

Organic production is a good deal for farmers. Over the course of 30 years, organic farming has proven to be more profitable per acre for the farmer. Even when considering the common skepticisms conventional farmers may have about organics such as lower yields and weedy fields, organic is a financial windfall for farmers while improving the land as a whole. Since 2011, organic prices have consistently tracked between 1.75 to 2 times that of conventional prices offering organic farmers economic sustainability. Even factoring in a yield drag of approximately 20%, organic is more profitable due to the reduction in inputs needed to raise a crop. According to a 2017 study from Penn State, counties in America where organic farms have clustered, referred to as “hot spots”, county poverty levels are 1.3% lower and household income is over $2,000 higher than those counties without concentrations of organic farms. So, why don’t we see a wave of domestic farmers transitioning to capture the share of the feed market currently serviced by imports?

When consumers first consider buying organic food, they often start with milk. Indeed, recent data shows that as consumers become more conscientious about their food choices, oftentimes coinciding with becoming new parents, their “gateway” products are commonly organic dairy and organic eggs. While the organic food sector has grown in every category, organic milk and eggs have stayed in the lead of consumers’ preferences. It’s for this reason, organic dairy and egg producers have experienced some of the largest growth rates of any organic commodity since 2001.

For organic milk or eggs to be eligible to bear the USDA organic logo, the rations fed to the dairy cattle and laying hens must be 100% certified organic. For every new organic flock or herd, more acres of certified organic crop ground are needed to raise the feed. While organic dairy farmers and hen raisers have added and expanded the flocks and herds, realizing improved margins and marketing opportunities for their goods, the feeds required to keep the cows and hens nourished, outstripped the supply domestic producers could provide. Into this void stepped international growers certified to the USDA National Organic Program (NOP). Over time, America has become a net importer of certified organic corn and soybeans. In 2021, the US imported over 305,000 acres worth of organic corn and soybeans.

So what do we need to get more farmers to transition to organic and to close the organic import gap? Price is a good incentive, but it is only one factor farmers look at when considering a transition to organics. Today, the prices for organic soybeans are especially good and the gap between organic and conventional is especially wide. With farmers receiving between $30 and $36/bu. for organic soybeans, conventional soybeans bring about half that, with current prices hovering at $16/bu. Organic soybean yields have ticked up in recent years with improved genetics and agronomics leading to a nationwide average of 35 bu./ac. Conventional yields strike just above 51 bu./ac. At these yields and prices, organic farmers gross $1,260/ac while conventional producers bring $816/ac. In addition to the price premium, organic producers don’t spend nearly as much per acre on patented seed, herbicide, and synthetic fertilizers. Instead, organic farming relies on increased labor and management, both resources that facilitate more jobs on the farm.

Organic farmer Harold Wilken once said, “Conventional farming is a treadmill that’s impossible to get off of.” The current conditions under which row crop producers raise the feeds that drive the meat, egg and dairy industry operate with high input bills, low margins, and financing that expects perfection. In the words of Ben Adolph, a producer in Illinois, “If you aren’t cutting 250 bu. [of corn] per ac, you might as well not get out of bed in the morning.” With yields maximized, and profits minimized, conventional producers are locked in a system with little flexibility to consider. Each year conventional farmers take out lines of credit to pay for the synthetic inputs like herbicides, pesticides, fertilizer, and patented seed. These debts may carry from one year to another, pinning producers under the expectations of their lenders to keep maximizing production while servicing their debt. For farmers to consider organic, they need to have access to lenders who understand organic and its fundamentally different production philosophy. Lenders who understand that organic producers are typically more profitable, more economically resilient, and better positioned for growth should be eager to make loans to organic producers.

Possibly the most important missing piece for encouraging more farmers to transition to organic and close the import gap is one-on-one technical advice. From inputs, to marketing, to record-keeping, organic farming is very different from conventional. No matter how high prices get or how willing lenders become, if the farmer doesn’t feel confident with organic farming skills, we will not see the level of transition we need to close the import gap.

Organic grain marketing is a major adjustment for transitioning farmers. Organic growers do not have access to the same local elevator infrastructure enjoyed by their conventional counterparts. They are best positioned for success when they forward contract, that is, they sell their crop for a fair price prior to harvesting and ideally, prior to planting. This arrangement allows them to plant crops they know they can sell and be confident in the price they will receive. Finding organic markets, and conducting price discovery, are key opportunities for organic advisors to help producers navigate a novel market place, one very different than what they may be used to.

The transition to organics full of financial landmines to navigate, and doing so with expert advice can mean the difference between a successful and catastrophic transition. Transition is the period during which farmers cease using all prohibited material inputs but cannot yet sell their crops as organic. The transition period lasts 36 months from the date of last prohibited input application and the first certified organic harvest. Understanding what crops to grow during the transition, how to minimize risk, the ways to build fertility, and ultimately identify markets to maximize revenue once organic, means a transitional farmer can invest during the transition.  Experts who can advise on the transition of conventional to organics need to understand how to forecast reasonable economic expectations and build realistic, fool-proof business plans.

Another major adjustment for transitioning farmers is adapting to the types of crop rotations that are critical to success in organic production. Unlike conventional agriculture, organic relies heavily on crop rotation to build healthy soil, provide adequate fertility, and prevent disease, weed and pest buildup. Crop rotation is, in fact, a requirement of the National Organic Program regulations. To comply with this requirement and produce healthy crops, organic producers raise three or more crops as part of a rotation. Any less than three will typically result in disease or pest outbreaks that are uncontrollable due to the prohibition of synthetic pesticides and herbicides. While throughout this discussion, organic soy and corn have been demonstrated to have a strong market demand, the “third year crop” (i.e. small grains, oil seeds, or pulse crops that are harvested at a different time of the year than the main cash crops) may be more difficult to market. For example, a crop that is both of a different family but also effective at combating weeds and retaining soil nutrients is annual ryegrass. This crop has an allelopathic effect on weeds, requires minimal nitrogen, and makes for a hearty ration component for hogs and layers. The challenge is that grain buyers are not typically looking for rye beyond the seed market. Researching and securing marketers for those third year crops is a significant opportunity for organic advisors. By maximizing the agronomic value while simultaneously marketing the third year crops for the greatest price, the organic advisor provides a suite of critical services that making transitioning to organic much more manageable.

The organic community is calling for more research, experimentation with, and acceptance of the use of alternative grains in commercial feed rations. If cereal rye, which has a near identical feed value to corn, were to be incorporated at a rate of 5% into the rations of America’s poultry flock, organic farmers raising corn and soybeans would have a consistent, valuable market for cereal rye thus enabling them to avoid growing corn and soy too frequently in their rotations. Indeed, the National Organic Standards Board recently released a call for research into alternative feed formulations to reduce reliance on corn and soybeans. More research into crops other than corn and soy will help build viable markets for third year crops that make organic corn and soy viable.

American farmers need organic advisors who are deeply knowledgeable about the climate, soils, flora, and markets for which they are offering services. To accomplish this, the organic education community needs to train agronomists who are from or already working in regions ripe for transition. Farmers' challenges are endemic to a farm's legal description, let alone region. From weeds, to fungal pressures, soil fertility, to planting windows, organic advisors need to be familiar with best organic production methods, and the unique context of the farms with whom they are working. The Organic Agronomy Training Service (OATS) and their fiscal sponsor the Organic Trade Association are leading the way by offering regionally adapted trainings for advisors. More investment is needed to expand the availability of this type of training to more prospective advisors, geographies, and crops.

Conventional, multi-generational farming operations are failing. Farms that have been aided through time with government support, the best science, and advances in agronomy still find themselves going bankrupt and their stewards aging out. America needs more farmers. Publications, interviews, and reports all remind us how the average farmer in America is over 60 years old and attrition from the profession is leaving America’s farms under-staffed, and under-stewarded. Barriers to entry are too high to make farming a realistic career goal for most Americans. Capital requirements are near impossible for a first generation operator to attain. Markets whiplash, and input prices rise like clockwork. Under the current farm conditions, can America expect to recruit any new farmers at all? With new attention being paid to equity in farming, and access for new farmers, both first generation and from historically disadvantaged groups, how can policy markets expect nascent business to build what has historically taken generations to establish?

Can those same policy makers expect any new farmer to reasonably get started under the conventional status quo? No. Thankfully, the conventional status quo is only one option - the other is certified organic. Organic field crop farming offers a chance for producers to enter a more stable market and to fill a critical role in the American food supply chain. As consumer demand rises for organic foods, opportunity for new farmers to close the import gap in organic abounds.