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Economic Returns, Organic and No-Till Rotations

Presentation given by David Buschena, Montana State University

The Setting
  • There is great interest in alternative cropping systems including no-till and organic production
  • It is difficult to evaluate net returns from these alternative systems.
  • Net returns depend on inputs, management, land and uncontrollable factors.
  • Plot studies attempt to control for differences in inputs, land quality, management and general climatic conditions.
General Points for an Organic Production System
  • These systems can be quite complex, utilizing green manure plow-down annual crops such as peas, perennials such as alfalfa, and small grains.
  • The rotation and crops utilized are tailored to the particulars of the field, with multiple goals of improving the soil, controlling weeds, stabilizing moisture, generating revenues, and …
  • It is difficult to compare revenues of organic systems to those of conventional systems since they often use non-traditional crops with thin markets.
  • Tillage costs appear to be higher in organic relative to conventional systems.
  • Organic HRS and HRW yields appear to be comparable to county averages.
  • Price premiums are vital to economic success for organics.
  • Per acre time requirements appear to be higher, with typically fewer total acres
Method 1: Comparative Net Returns For A Chouteau County Organic Farm
  • Production and price history in an established organic crop rotation
  • Profitability estimates relative to county averages from 1993-2000).
  • Net returns to this organic system compare favorably to estimated returns based on county average yields and prices.
  • Favorable returns due to both lower operating costs and organic price premiums.
  • In recent drought years, price premiums were very important to the organic operation.
Five Year Rotation Schedule: Organic Versus Conventional Farming Systems
Chouteau County Organic Farm
Year Field 1 Field 2 Field 3 Field 4 Field 5
1 Sunflower Green Manure Peas Spring Wheat Barley Mechanical Fallow
2 Green Manure Peas Spring Wheat Barley Mechanical Fallow Sunflower
3 Spring Wheat Barley Mechanical Fallow Sunflower Green Manure Peas
4 Barley Mechanical Fallow Sunflower Green Manure Peas Spring Wheat
5 Mechanical Fallow Sunflower Green Manure Peas Spring Wheat Barley

Conventional Farm Number 1 (Chemical Fallow)
Year Field 1 Field 2 Field 3 Field 4 Field 5
1 Spring Wheat Chemical Fallow Spring Wheat Barley Chemical Fallow
2 Chemical Fallow Spring Wheat Barley Chemical Fallow Spring Wheat
3 Spring Wheat Barley Chemical Fallow Spring Wheat Chemical Fallow
4 Barley Chemical Fallow Spring Wheat Chemical Fallow Spring Wheat
5 Chemical Fallow Spring Wheat Chemical Fallow Spring Wheat Barley

Conventional Farm Number 2 (Mechanical Fallow)
Year Field 1 Field 2 Field 3 Field 4 Field 5
1 Spring Wheat Mechanical Fallow Spring Wheat Barley Mechanical Fallow
2 Mechanical Fallow Spring Wheat Barley Mechanical Fallow Spring Wheat
3 Spring Wheat Barley Mechanical Fallow Spring Wheat Mechanical Fallow
4 Barley Mechanical Fallow Spring Wheat Mechanical Fallow Spring Wheat
5 Mechanical Fallow Spring Wheat Mechanical Fallow Spring Wheat Barley
Comparing Chouteau County Organic Farm’s Costs and Revenues versus a Typical North Central Montana Grain Farm
Costs
  1998 Spring Wheat after Fallow 1999 Barley Recrop 2000 Fallow
Organic Conventional Organic Conventional Organic Conventional
Seed and Treatment 6.9 6.9 4.75 4.75 - -
Herbicide - - - - - -
Grass - 12 - 12 - -
Broadleaf - 4 - 4 - -
Chemical Fallow - - - - - 4.21
Application - 4 - 4 - 4
Fertilizer - 15.31 - 11.93 - -
Total Operating Costs 18.91 55.81 13.36 49.60 6.82385 12.21605

Revenues
  1998 Spring Wheat after Fallow 1999 Barley Recrop 2000 Fallow
Organic Conventional Organic Conventional Organic Conventional
Protein 12 14 - - - -
Yield 29.6 31 20.5 32 - -
Price per Bushel 5.50 3.61 4.75 1.10 - -
Total Revenue 162.8 111.91 97.38 35.20 - -
Net Returns above Operating and Machinery Ownership 143.89 56.1 84.02 -14.40 -6.82385 -12.21605
Expected Net Returns above Operating and Machinery Ownership 121.62 33.83 61.46 -36.96 -15.75885 -15.45605
Expected Net Returns above Operating and Machinery Ownership *If no price premium (SW Price=3.78) 50.87 33.83 -13.37 -36.96 -15.13385 -15.45605

Labor and Management Hours
  1998 Spring Wheat after Fallow 1999 Barley Recrop 2000 Fallow
Organic Conventional Organic Conventional Organic Conventional
Production 0.21 0.21 0.21 0.21 0.1 0.05
Marketing 0.01 0.005 0.01 0.005 - -
Scouting 0.14 0.06 0.17 0.06 0.08 0.08
Total Hours 0.36 0.275 0.39 0.275 0.18 0.13

Net return excluding labor and management dollars was higher for organic farming than for either type of conventional farming.

Plot Studies
  • Ongoing research at Montana State University to study organic, no-till, and conventional rotations
  • Sites in Bozeman and near Moore, Montana.
  • We follow a farm through the transition period from conventional to either organic or to no-till.
  • Time Period 2000-Present. Weather challenges were severe.
Five Rotations at Bozeman
  1. Organic: alternate year legume-cereal (Winter pea fallow – HRW – lentil – barley)
  2. No-Till Winter: alternate year broadleaf-cereal (Winter pea – HRW – dormant canola – HRW)
  3. No-Till Spring: alternate year broadleaf-cereal (Spring pea – HRS – spring canola – HRS)
  4. No-Till Diverse: cool-warm, broadleaf-cereal stacked 2+2 (Spring pea – HRW – corn – sunflower)
  5. No-Till Continuous (Wheat HRS – HRW)
Supporting Information
  • Parallel with plot studies, interviews of producers in Central and Northcentral Montana.
  • Production practices included organic, and no-till.
  • Information included yield, rotational adjustments, crop loss, and erosion levels.
Findings
  • Organic producers faced numerous challenges due to wind erosion, with damage varying considerably due to terrain and cropping system
  • No-till producers typically avoided wind erosion
  • Organic and no-till producers typically responded to drought by increasing fallow acres

Last Modified: 07/30/2007