Plains
PDF
4898, 4898, TOPP-OCIA-USDA-3-August23-White-Pages, TOPP-OCIA-USDA-3-August23-White-Pages.pdf, 2642066, https://cms.organictransition.org/wp-content/uploads/2024/02/TOPP-OCIA-USDA-3-August23-White-Pages.pdf, https://cms.organictransition.org/resource/the-economics-of-transitioning-to-certified-organic-farming/topp-ocia-usda-3-august23-white-pages/, , 14, , , topp-ocia-usda-3-august23-white-pages, inherit, 4897, 2024-02-15 17:08:10, 2024-02-15 17:08:10, 0, application/pdf, application, pdf, https://cms.organictransition.org/wp-includes/images/media/document.png
2023
The Transi琀椀on to
Organic Partnership
Program (TOPP)
Prepared for USDA Organic by AcresUSA., The Voice of Eco-Agriculture
www.ACRESUSA.com | 1
The Economics of Transitioning to
Certified Organic Farming
A PROFITABLE PATH TO HEALTHIER AND SUSTAINABLE AGRICULTURE
or farmers considering a
transi琀椀on to cer琀椀昀椀ed-organic farming, the prospect of change can be daun琀椀ng. Anxiety about 昀椀nancial viability and the
fear of failure deter many from embracing organic prac琀椀ces.
These concerns shouldn’t be taken lightly; however, the truth is that
for many farmers, organic farming is
more pro昀椀table than conven琀椀onal
farming. And being an organic producer can be not only 昀椀nancially rewarding — it also provides the sa琀椀sfac琀椀on of providing customers food
with fewer harmful chemicals (and
less exposure to these chemicals for
yourself and your team).
F
2 | Copyright AcresUSA
In this guide, we will explore the economic aspects of transi琀椀oning to organic farming, including its impact on the
cost of produc琀椀on, yield, and the price
of goods sold. Addi琀椀onally, we will
delve into the growing demand for organic products and government-sponsored cost-share programs and grants
available to support farmers during
their transi琀椀on to organic agriculture.
LOWER COST OF PRODUCTION IN
ORGANIC FARMING
Pro昀椀t in farming is simply a product
of cost of produc琀椀on, yield, and the
price received for what is produced.
One of the key concerns for farmers
considering the transi琀椀on to organic
farming is whether the cost of produc琀椀on will be manageable.
Contrary to popular belief, organic
produc琀椀on can o昀琀en result in lower
costs for various inputs, such as fer琀椀lizers, seeds, feed, machinery, and
labor. Tradi琀椀onal farming o昀琀en relies
heavily on synthe琀椀c fer琀椀lizers and pes琀椀cides, which can be expensive — especially in recent years. In contrast, organic farming emphasizes natural and
sustainable prac琀椀ces, reducing the
need for costly chemical inputs. Many
inputs can even be produced on-farm.
• Fer琀椀lizers: Organic farmers u琀椀lize compost, green manure,
and other organic materials
to enrich the soil naturally, rePHOTO FROM CANVA
ducing the reliance on expensive synthe琀椀c fer琀椀lizers. Many
growers are beginning to produce their own high-quality
compost, or are buying it and
are using it to make biologically
rich compost teas to spread as
foliar treatments.
Seeds: While organic seeds may
be slightly more expensive upfront, farmers can save costs
in the long run by saving and
replan琀椀ng seeds from their organic crops — something conven琀椀onal growers are o昀琀en
prohibited from doing due to
seed copyrights.
Feed: For livestock farmers, organic feed is usually costlier, but
it can be o昀昀set by the poten琀椀al
for premium prices and the added bene昀椀ts of organic animal
•
•
welfare prac琀椀ces. And many
organic farmers and ranchers
are using planned and rota琀椀onal grazing programs that keep
animals on grass longer — reducing the need for externally
purchased feeds and improving
their soil at the same 琀椀me.
Machinery: Organic farms require fewer chemical treatments,
although many today replace
these passes with foliar feedings
of select nutrients and biological amendments; whether an
organic farmer will experience
reduced wear and tear on machinery — poten琀椀ally extending
its lifespan and lowering maintenance costs — depends on the
grower’s speci昀椀c prac琀椀ces.
Labor: Organic farms typically
priori琀椀ze sustainable prac琀椀ces,
•
•
leading to healthier soil and
crops, which o昀琀en requires less
labor-intensive management in
the long term.
YIELD TRENDS IN ORGANIC FARMING
The ques琀椀on of yield is another
crucial factor that in昀氀uences farmers’
decisions when considering organic
agriculture. While it is true that yields
may dip during the ini琀椀al three-year
transi琀椀on period, extensive research
conducted by the Rodale Ins琀椀tute
and other organiza琀椀ons consistently
shows that organic yields perform as
well as, if not be琀琀er than, conven琀椀onal yields over 琀椀me, especially during
periods of adverse weather condi琀椀ons
such as drought or heavy rainfall.
• The three-year transi琀椀on period: During the ini琀椀al three years
of transi琀椀oning from conven-
Rodale Institute Farming Systems Trials: Yields
Just one example of research that demonstrates the yield poten琀椀al of organic crops is the 40-year Farming Systems Trials at the Rodale Ins琀椀tute in eastern Pennsylvania. The chart below shows how yields in
the trials’ three plots (since 2008, each with a full 琀椀llage and reduced 琀椀llage component) — conven琀椀onal, organic with fer琀椀lity from legumes, and organic with fer琀椀lity from manure — were basically even,
on average. In drought-stricken years, however (like 2016, as shown on the second graph), the organic
systems outperform conven琀椀onal crops — by over 30 percent, in the case of the organic manure system.
YIELDS
15
10
5
0
Full
Tillage
Reduced
Tillage
CONVENTIONAL
Full
Tillage
Reduced
Tillage
LEGUME
Full
Tillage
Reduced
Tillage
MANURE
CORN YIELD IN 2016, METRIC TONS ha
CORN YIELD, METRIC TONS ha
15
10
5
0
Full
Tillage
Reduced
Tillage
CONVENTIONAL
Full
Tillage
Reduced
Tillage
LEGUME
Full
Tillage
Reduced
Tillage
MANURE
www.ACRESUSA.com | 3
•
琀椀onal to organic farming, yields
may experience a temporary decline due to the recovery of soil
health and the shi昀琀 in farming
prac琀椀ces. However, this period
is crucial for establishing a strong
founda琀椀on for sustainable and
robust organic produc琀椀on.
Long-term bene昀椀ts: A昀琀er the
transi琀椀on period, organic farms
demonstrate improved soil
health and biodiversity, leading
to more resilient crops that can
be琀琀er withstand environmental
stresses, resul琀椀ng in stable or
higher yields.
HIGHER PRICES FOR ORGANIC GOODS
One of the most appealing aspects
of organic farming is its poten琀椀al to
command higher prices for products
sold — par琀椀cularly in regions with
high demand and a strong market for
organic goods.
A simple trip to the grocery store
reveals this, at least for the prices
consumers pay. A USDA Economic Research Service report found that 2010
retail prices for a set of 17 di昀昀erent
foods were from 7 to 82 percent higher for the organic op琀椀on.
But prices for producers are higher,
too. O昀케cial USDA Agricultural Marketing Service sta琀椀s琀椀cs for commodity
organic crops are available at h琀琀ps://
www.ams.usda.gov/market-news/organic. While occasional excep琀椀ons exist, organic prices for the farmer almost
always exceed those of conven琀椀onal.
Many organic farmers also choose
to market their own products directly
to consumers and are thus able to receive even higher prices.
THE GROWING DEMAND FOR
ORGANIC PRODUCTS
The demand for organic products
has been on the rise worldwide. Or-
ganizations like the Organic Trade
Association report significant growth
in organic sales across various sectors, including fruits, vegetables,
dairy, meat, and processed foods.
Organic food sales have tripled in the
U.S. since 2006, and Millennials and
Gen Z, who are more likely to choose
organically produced food than previous generations, are becomingly
increasingly important consumers.
• Health and environmental
concerns: Consumers are increasingly aware of the poten琀椀al health risks associated with
pes琀椀cides and GMOs, leading
them to seek healthier and
more sustainable alterna琀椀ves.
• Changing consumer preferences: Many people now prefer to support environmentally
friendly and socially responsible prac琀椀ces, making organic
products more appealing.
Rodale Institute Farming Systems Trials: Profits
In the Rodale Ins琀椀tute’s 40-year Farming Systems Trial (see previous page for a descrip琀椀on of the experiment design), the two organic systems greatly outperformed the conven琀椀onal system in terms of pro昀椀ts.
PROFITS
$75k
$50k
$25k
$0k
-$25k
Full
Tillage
Reduced
Tillage
CONVENTIONAL
4 | Copyright AcresUSA
Full
Tillage
Reduced
Tillage
LEGUME
Full
Tillage
Reduced
Tillage
MANURE
NET RETURNS WITHOUT ORGANIC PREMIUMS
NET RETURNS WITHOUT ORGANIC PREMIUMS
$75k
$50k
$25k
$0k
-$25k
Full
Tillage
Reduced
Tillage
CONVENTIONAL
Full
Tillage
Reduced
Tillage
LEGUME
Full
Tillage
Reduced
Tillage
MANURE
U.S. Organic Food Sales and Incremental Growth,
2013-2022
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
Source: Organic Trade Associa琀椀on’s 2023 Organic Industry Survey
conducted 1/13/2023 ($mil., consumer sales).
Sales
•
Incremental Growth
Expanding market opportuni琀椀es: With the growing popularity of organic goods, farmers
who transi琀椀on to organic produc琀椀on can tap into new markets and diversify their revenue
streams.
GOVERNMENT COST-SHARE PROGRAMS
AND GRANTS
Recognizing the importance of suppor琀椀ng farmers during their transi琀椀on
to organic agriculture, several government agencies and organiza琀椀ons
o昀昀er cost-share programs and grants
to assist with the 昀椀nancial aspects of
transi琀椀oning.
• Organic cer琀椀昀椀ca琀椀on costshare programs: USDA, as well
as various state and local organiza琀椀ons, provide 昀椀nancial
•
assistance to help cover the expenses of organic cer琀椀昀椀ca琀椀on,
making the transi琀椀on more
昀椀nancially feasible. USDA’s current cost-share program o昀昀ers
a reimbursement of 75 percent
of eligible expenses, up to a
maximum of $750, for achieving full organic cer琀椀昀椀ca琀椀on. To
access the USDA Organic Cer琀椀昀椀ca琀椀on Cost-Share Program,
farmers can visit fsa.usda.gov/
organic or can reach out to
their local Farm Service Agency
(FSA) o昀케ce.
Grants for organic research
and educa琀椀on: Governments
and nonprofit organizations
o昀琀en provide grants for research and educa琀椀on related
to organic farming, o昀昀ering
•
valuable resources and knowledge to transi琀椀oning farmers.
Some of these opportuni琀椀es are available through the
Rodale Ins琀椀tute (rodaleins琀椀tute.org), which provides a
number of training programs
and grants, and through the
Organic Crop Improvement Associa琀椀on Interna琀椀onal (OCIA
— ocia.org), which o昀昀ers various programs, including micro
grants ranging from $500 to
$3,000, scholarships of $1,000,
Farmer of the Year Awards, and
a mentorship program.
USDA/AMS TOPP Program:
The United States Department of Agriculture (USDA)
Agricultural Marke琀椀ng Service
(AMS) o昀昀ers the Transi琀椀on to
Organic Partnership Program
(TOPP) to help new and aspiring organic farmers. Through
the TOPP program, transi琀椀oning farmers can access a range
of resources and assistance.
This includes farmer-to-farmer mentoring, educa琀椀on and
technical support on agronomy, cer琀椀昀椀ca琀椀on guidance, extension services, conserva琀椀on
planning, business development assistance, informa琀椀on
on regula琀椀ons, and marke琀椀ng
support. These programs aim
to provide transi琀椀oning farmers with the necessary tools
and knowledge to navigate the
organic cer琀椀昀椀ca琀椀on process,
implement sustainable prac琀椀ces, and successfully market
their organic products.
www.ACRESUSA.com | 5
CONCLUSION
Cer琀椀昀椀ed organic farming is a pro昀椀table path that not only supports farmers 昀椀nancially but also contributes to
producing healthier food with fewer
harmful chemicals. The cost of produc琀椀on is o昀琀en lower in organic farming, with poten琀椀ally reduced expenses
on inputs like fer琀椀lizers, seeds, feed,
machinery, and labor. While there may
be a temporary dip in yields during
the transi琀椀on period, organic farms
demonstrate comparable or even improved yields over 琀椀me, par琀椀cularly
during adverse weather condi琀椀ons.
Furthermore, organic farmers can
bene昀椀t from premium prices for their
products due to increasing consumer
demand for organic goods. The growth
in demand for organic products pres6 | Copyright AcresUSA
ents exci琀椀ng opportuni琀椀es for farmers
to tap into new markets and to diversify their income streams. And government-sponsored cost-share programs
and grants are available to support
farmers during their transi琀椀on to organic agriculture, making the 昀椀nancial
aspect less in琀椀mida琀椀ng.
Embrace the transi琀椀on to cer琀椀昀椀ed-organic agriculture with con昀椀dence: organic produc琀椀on can indeed
be pro昀椀table and rewarding, both for
your bo琀琀om line and for the well-being of yourself, your customers, and
the environment.
This ar琀椀cle was wri琀琀en by AcresUSA, in coordina琀椀on with the Organic Crop Improvement Associa琀椀on
(OCIA) Interna琀椀onal. OCIA is the TOPP administrator for the Plains Region. This ar琀椀cle is supported
through the United States Department of Agriculture
(USDA) Transi琀椀on to Organic Partnership Program
(TOPP). TOPP is a program of the USDA Organic Transi琀椀on Ini琀椀a琀椀ve and is administered by the USDA Agricultural Marke琀椀ng Service (AMS) Na琀椀onal Organic
Program (NOP).
For more information on this subject, see the Na琀椀onal Center for
Appropriate Technology report “Understanding Organic Pricing and
Costs of Produc琀椀on” by Je昀昀 Schahczenski and Emily Post at h琀琀ps://
a琀琀ra.ncat.org/publica琀椀on/understanding-organic-pricing-and-costsof-produc琀椀on/.
PHOTO FROM CANVA