Farming organically allows producers to incur many economic and social advantages compared to farming conventionally. Understanding and planning the economic returns of the transition process can aid the producer in planning and in becoming organically certified.
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2019
Making the Transition from
Conventional to Organic
Farming organically allows producers to incur many
economic and social advantages compared to farming
conventionally (Chase et al., 2019). Understanding and
planning the economic returns of the transition process
can aid the producer in planning and in becoming
organically certified.
to management of $50,000 for the farm, they would
not reach the goal producing conventionally, but only
would need 105 acres organically. Keep in mind the
conventional commodity prices for corn and soybean
were $3.64 and $9.86, respectively, over the six-year
period between 2013-2018 in this study.
In Iowa, higher organic prices and lower production
costs more than compensate for lower yields. The size of
the economic advantage will differ by the crops within
the rotation, the time period of the study, and geographic
location of the farm.
Organic prices according to USDA Agricultural
Marketing Service reports (USDA, various dates, www.
ams.usda.gov/mnreports/lsbnof.pdf) averaged $10.45 per
bushel for corn and $23.45 for soybeans. Organic oat
price averaged to $4.75 per bushel, and premium alfalfa
prices, which were used for the study, were $171.67 per
ton over the six-year period between 2013-2018. If these
prices were received, returns to management would be
approximately $490 per acre, resulting in a $495 per
acre return over the conventional producer. Given these
assumptions, a $50,000 economic goal could be achieved
with 102 acres of organic production.
However, there has been enough consistency among
the research comparing conventional and organic
production systems to permit some degree of confidence.
For example, Delate et al. (2013) concluded that a wellmanaged organic system held an economic advantage
over the conventional. Cox et al. (2019) found organic
corn had mixed results regarding yields compared to
conventional corn, depending upon the cropping system.
Soybean yields were approximately 10% lower.
Despite lower yields, overall organic returns for all crops
were substantially higher over the four-year period of
the study. Other research has found organic premiums
improved the economic performance of the organic
system compared to conventional systems; see White et
al. (2019).
More recently, Chase et al. (2019) concluded that a fourcrop organic rotation increased returns to management
substantially, from -$5 per acre for the conventional
corn-soybean rotation to $490 per acre for the organic
rotation. The dramatic increase in returns per acre
would allow a farmer to reach an overall economic
goal with significantly fewer acres. For example, if the
economic goal of the producer was to receive returns
The exact numbers for return to management and acres
needed vary by assumptions, but the comparison has
remained fairly constant over the last 13 years. The
economic advantage to the organic system in Iowa, given
the four-crop rotation of the study, has been between
$200 and $300 per acre compared to the conventional
corn-soybean system. This economic advantage would
allow the organic producer to achieve a designated
economic goal with fewer acres.
The need for fewer acres would allow the producer to
enter into farming with lower capital requirements.
Fewer acres also translates into a smaller machinery
investment. Machinery for organic producers tends to
be smaller and less expensive equipment compared to
conventional producers. The much lower machinery
and land investment for the organic producer would
FFED0026 November 2019
allow farmers with limited resources to attain economic
goals with minimum debt. Therefore, organic rotations
offer beginning farmers an opportunity to gain access
to farming without a debt load and risks that can be
overwhelming. Programs and funding that are available
for beginning farmers can be stretched farther in organic
production than conventional.
Organic Certification and the Transition Process
Changing from conventional to organic production
is a regulated process. Organic certification requires
that crops do not receive any synthetic chemicals
including fertilizers or pesticides for three years prior
to the harvest of the crops (see Delate 2003 for a full
explanation of the certification process). As an example,
selling this year’s corn harvested on Nov. 1, 2019, as
organic would require that the land received no synthetic
chemicals since Oct. 31, 2016. While the transition to
certification time period is three years, the number of
crops that need to be sold as transition crops could be
two. For this example, crops grown in 2017 and 2018
must be grown using organic methods but cannot be
sold as organic.
Split farming operations that simultaneously grow crops
organically and conventionally are allowed in Iowa but
require special conditions (Delate, 2003). The ability to
split farm operations allows producers to change from
conventional to organic production on a field-by-field
basis rather than on a whole-farm basis. Current organic
producers indicate a field-by-field transition is easier to
manage due to extensive differences in nutrient and pest
management between the two production systems.
Organic producers must use a longer crop rotation than
conventional counterparts. Also, the same row crop
cannot be produced in consecutive years on the same
field. The usual organic rotation includes a legume
(alfalfa, clover, or vetch) and small grain (oat, wheat,
or barley) in addition to corn and soybean. Legumes
supply nitrogen while the small grains supply nutrients,
particularly carbon, and aid in weed management.
Organic corn and soybean are normally grown in the
rotation in Iowa due to higher organic price premiums
and profitability. The common organic rotation in Iowa
is from four to six years.
Land coming out of the Conservation Reserve Program
(CRP) needs to meet the three-year requirement of
no prohibitive substances. But it is possible to harvest
an organic crop the first year coming out of CRP if
synthetic chemicals have not been applied during that
period. Which crop to start with would depend upon the
potential problems from weed and pest pressure and the
ability to provide the necessary nutrients to the crop the
first year.
2
Transition Production Plan
As stated previously, organic transitions in Iowa can
occur on a field-by-field or whole-farm basis. Review the
plan before determining which transition plan makes
sense for an individual farming operation. The transition
plan should start with the development of a production
plan, followed by the development of budgets and
determination of projected profitability.
For example, assume the proposed farm is 400 acres and
currently produces conventional corn and soybean. To
simplify the example, assume the farm is easily divisible
into four 100-acre fields (or combination of fields). The
transition plan is to convert 100 acres per year. The
selected organic rotation is corn-soybean-oat/alfalfaalfalfa. The oat and alfalfa are seeded together, with the
oat harvested in the seeding year along with one cutting
of alfalfa. Each field will begin the transition with oat.
Oat is selected to control weeds and begin the process of
developing soil tilth.
Oat is followed by alfalfa to provide corn with a nitrogen
source. The other recommended nutrient source for
corn is animal manure. Corn follows alfalfa and is the
first crop that can be sold organically. The benefit of
corn as the first organic crop is that it provides the
largest economic returns and provides some financial
stability to the rotation. Soybean is the fourth crop and
provides some nutrients for the following oat crop. The
production plan for the transition process is illustrated
in Table 1.
While it is possible to start with a row crop such as
corn or soybean in the transition process, these crops
often do not do as well as small grains or legumes
because of inadequate soil fertility or weed and insect
pest pressures. It takes time for the land to readjust to
an organic system, as well as for the farmer to adjust to
organic practices. Most organic production specialists
would suggest the transition start with crops that are
easier to manage and provide the pest and nutrient basis
for the crops that follow.
“Making the Transition from Conventional to Organic
Production”, a decision tool developed by ISU Extension
and Outreach, (www.extension.iastate.edu/agdm/
crops/xls/a1-26organictransition.xlsx) is available to
help analyze the transition process. The spreadsheet
allows the user to choose which crops to change first,
as well as to develop a whole-farm summary to see how
returns are affected each year of the transition process.
The spreadsheet uses a five-year transition process.
Conventional budgets are available for corn, soybean,
and oat. Organic budgets are provided for corn, soybean,
oat, and alfalfa. A blank budget is available to enable the
user to input a crop that is not listed (e.g., barley, wheat,
clover, etc.)
FFED 0026 | Making the Transition from Conventional to Organic
References
To use the Decision Tool, complete the enterprise
budget for each crop within the rotation. Keep in mind
the budgets listed are to be used as a starting point
or guideline only. To get accurate results, actual farm
records should be used. On the summary page, enter the
acres for each crop grown for all years of the rotation.
The annual returns for each crop are calculated along
with the summary returns for each year of the rotation.
Chase, Craig, Kathleen Delate, and Olivia Hanlon. 2019. Economic
Analysis of Two Iowa Crop Rotations. FFED 20. Ames: Iowa
State University Extension and Outreach.
Cox, William, John J. Hanchar, Jerome Cherney, and Mark
Sorrells. 2019. “Economic Responses of Maize, Soybean,
and Wheat in Three Rotations under Conventional and
Organic Systems.” Agronomy. 2019, 9(8), 424. doi:10.3390/
agronomy9080424.
The returns for the proposed farm described in Table 1
are shown in Table 2. Over the five years, the return to
management averaged $278.54. Using the same costs,
had this farm done an even rotation of the 400 acres with
only conventional crops, the five-year average return to
management would have been -$4.17.
Delate, Kathleen. 2003. Fundamentals of Organic Agriculture. PM
1880. Ames: Iowa State University Extension and Outreach.
https://store.extension.iastate.edu/Product/547
Delate, Kathleen, Cynthia Cambardella, Craig Chase, Ann
Johanns, and Robert Turnbull. 2013. “The Long-Term
Agroecological Research (LTAR) Experiment Supports
Organic Yields, Soil Quality, and Economic Performance in
Iowa.” Crop Management. doi:10.1094/CM-2013-0429-02-RS.
Accurate records are a key component of becoming
certified organic. The style of recordkeeping varies
somewhat among certification agencies, but all require
detailed logs of non-GMO seed selection and organiccompliant inputs. Therefore, it is important to identify
an organic certification agency prior to beginning the
transition process to make sure the production practices
being followed and the records being kept will lead to a
successful transition.
White, Kathryn E., Michel A. Cavigelli, Anne E. Conklin, and
Christopher Rasmann. 2019. “Economic Performance of LongTerm Organic and Conventional Crop Rotations in the MidAtlantic.” Agronomy Journal. 111 (3):1358-1370. doi:10.2134/
agronj2018.09.0604.
United States Department of Agriculture, Agricultural Marketing
Service Organic Reports.
www.ams.usda.gove/market-news/organic
Links to USDA organic certification information:
www.ams.usda.gov/services/organic-certification
www.ams.usda.gov/nop
http://extension.agron.iastate.edu/organicag
Table 1. Transition production plan.
Year 1
Year 2
Year 3
Year 4
Year 5
Field 1
Conv Sb
Conv Corn
Conv Sb
Trans Oat
Trans Alfalfa
Field 2
Conv Corn
Conv Sb
Trans Oat
Trans Alfalfa
Organic Corn
Field 3
Conv Sb
Trans Oat
Trans Alfalfa
Organic Corn
Organic Sb
Field 4
Trans Oat
Trans Alfalfa
Organic Corn
Organic Sb
Organic Oat
Year 6
All fields
organically
certified
Conv=conventional; Trans=transitional; Sb=soybean.
Table 2. Transitional organic economic returns.
Transition
Rotational Returns
Year 1
Year 2
Year 3
Year 4
Year 5
5-Year
Average
Receipts
$554.13
$604.00
$839.99
$929.81
$962.91
$774.17
Total costs
$517.21
$514.99
$500.79
$494.03
$494.04
$504.21
$16.91
$89.01
$339.20
$457.23
$490.33
$278.54
Returns to LLM
$285.88
$359.54
$612.01
$734.80
$767.90
$552.03
Returns to LM
$275.41
$347.51
$597.70
$715.73
$748.83
$537.04
$16.91
$89.01
$339.20
$457.23
$490.33
$278.54
Returns over total cost
Returns to management
Updated by Craig Chase, program manager, ISU Extension and Outreach Farm, Food and Enterprise Development Program; Kathleen Delate, Iowa State professor of
agronomy and horticulture; and Olivia Hanlon, undergraduate research assistant. Originally published as PM 2073, Feb. 2009. Ames: Iowa State University.
Iowa State University Extension and Outreach does not discriminate on the basis of age, disability, ethnicity, gender identity, genetic information, marital status, national
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apply to all programs.) Inquiries regarding non-discrimination policies may be directed to the Diversity Advisor, 2150 Beardshear Hall, 515 Morrill Road, Ames, Iowa
50011, 515-294-1482, extdiversity@iastate.edu. All other inquiries may be directed to 800-262-3804.
FFED 0026 | Making the Transition from Conventional to Organic
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