IDEAS home Printed from https://ideas.repec.org/p/ags/aaea08/6449.html
   My bibliography  Save this paper

The Profitability of Organic Soybean Production

Author

Listed:
  • McBride, William D.
  • Greene, Catherine R.

Abstract

Results from long-term experimental trials suggest that similar yields and lower costs are possible with organic compared to conventional soybeans, but there is little information about the relative costs and returns on commercial farms. This study examines the profitability of commercial soybean production using a nationwide survey of soybean producers for 2006 that includes a targeted sample of organic growers. Treatment-effect models are specified to isolate the impact of choosing the organic approach on various levels of soybean production costs. Organic soybean costs range from about $1 to $6 per bushel higher than those for conventional soybeans due to both lower yields and higher per-acre costs, while the average organic price premium in 2006 is more than $9 per bushel. High returns to organic production are attributed to the significant price premiums paid for organic soybeans in 2006, and these price premiums have remained high in 2007 and 2008. However, much higher conventional soybean prices and increased fuel prices may have reduced the incentive for planting organic soybeans.

Suggested Citation

  • McBride, William D. & Greene, Catherine R., 2008. "The Profitability of Organic Soybean Production," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6449, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea08:6449
    DOI: 10.22004/ag.econ.6449
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/6449/files/465035.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.6449?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Delate, K. M. & Duffy, Michael & Chase, Craig A. & Holste, A. & Friedrich, H. & Wantate, N, 2003. "An Economic Comparison of Organic and Conventional Grain Crops in a Long-Term Agroecological Research (Ltar) Site in Iowa," Staff General Research Papers Archive 11818, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Delbridge, Timothy A. & Fernholz, Carmen & King, Robert P. & Lazarus, William, 2013. "A whole-farm profitability analysis of organic and conventional cropping systems," Agricultural Systems, Elsevier, vol. 122(C), pages 1-10.
    2. Singerman, Ariel & Lence, Sergio H., 2010. "How Closely Related Are The Prices Of Organic And Conventional Corn?," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61151, Agricultural and Applied Economics Association.
    3. Laure Latruffe & Céline Nauges, 2014. "Technical efficiency and conversion to organic farming: the case of France," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 41(2), pages 227-253.
    4. Singerman, Ariel & Hart, Chad E. & Lence, Sergio H., 2011. "Price analysis, risk assessment, and insurance for organic crops," ISU General Staff Papers 201108010700001102, Iowa State University, Department of Economics.
    5. Singerman, Ariel & Hart, Chad E. & Lence, Sergio H., 2012. "Revenue Protection for Organic Producers: Too Much or Too Little?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(3), pages 1-20.
    6. Peterson, Hikaru Hanawa & Barkley, Andrew P. & Chacon-Cascante, Adriana & Kastens, Terry L., 2012. "The Motivation for Organic Grain Farming in the United States: Profits, Lifestyle, or the Environment?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(2), pages 1-19, May.
    7. Singerman, Ariel & Lence, Sergio H. & Kimble-Evans, Amanda, 2010. "Organic crop prices, or 2x conventional ones?," ISU General Staff Papers 201009090700001112, Iowa State University, Department of Economics.
    8. Chan, Stephanie & Caldwell, Brian & Rickard, Bradley J., 2010. "An Economic Examination of Alternative Organic Cropping Systems in New York State," EB Series 121652, Cornell University, Department of Applied Economics and Management.
    9. Uematsu, Hiroki & Mishra, Ashok K., 2012. "Organic farmers or conventional farmers: Where's the money?," Ecological Economics, Elsevier, vol. 78(C), pages 55-62.
    10. Lohr, Luanne & Park, Timothy A., 2009. "Labor Pains: Valuing Seasonal versus Year-Round Labor on Organic Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(2), pages 1-16, August.
    11. Gramig, Benjamin M., 2010. "Greenhouse Gas Emissions Offsets from Agriculture: Opportunities and Challenges," Purdue Agricultural Economics Report 188962, Purdue University, Department of Agricultural Economics.
    12. Funtanilla, Margil & Lyford, Conrad P. & Wang, Chenggang, 2009. "An Evaluation of the Organic Cotton Marketing Opportunity," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49359, Agricultural and Applied Economics Association.
    13. Dimitri, Carolyn & Oberholtzer, Lydia & Wittenberger, Michelle, 2010. "The Role of Contracts in the Organic Supply Chain: 2004 and 2007," Economic Information Bulletin 102762, United States Department of Agriculture, Economic Research Service.
    14. McBride, William D. & Greene, Catherine R. & Ali, Mir B. & Foreman, Linda F., 2012. "The Structure and Profitability of Organic Field Crop Production: The Case of Wheat," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123835, Agricultural and Applied Economics Association.
    15. Gillespie, Jeffrey M. & Nehring, Richard F., 2012. "The Economics of Organic Versus Conventional Cow-calf Production," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119773, Southern Agricultural Economics Association.
    16. McBride, William D. & Greene, Catherine & Foreman, Linda, 2013. "The Structure and Profitability of Organic Field Corn Production," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149671, Agricultural and Applied Economics Association.
    17. Nicolai V. Kuminoff & Ada Wossink, 2010. "Why Isn’t More US Farmland Organic?," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 240-258, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Singerman, Ariel & Hart, Chad E. & Lence, Sergio H., 2011. "Price Analysis, Risk Assessment, and Insurance for Organic Crops," Staff General Research Papers Archive 34993, Iowa State University, Department of Economics.
    2. Delate, Kathleen & Cambardella, Cynthia & Chase, Craig & Turnbull, Robert, 2015. "A Review of Long-Term Organic Comparison Trials in the U.S," Sustainable Agriculture Research, Canadian Center of Science and Education, vol. 4(3 Special).
    3. Raszap Skorbiansky, Sharon & Adjemian, Michael K. & Saitone, Tina L. & Sexton, Richard J., 2017. "Price Determination and Margin Volatility in Thinly Traded Commodity Markets: An Application to Major U.S. Field Crops," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258577, Agricultural and Applied Economics Association.
    4. Kuminoff, Nicolai V. & Wossink, Ada, 2005. "Valuing the Option to Convert from Conventional to Organic Farming," 2005 Annual meeting, July 24-27, Providence, RI 19531, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Sharon Raszap Skorbiansky & Michael K Adjemian, 2021. "Not All Thin Markets Are Alike: The Case of Organic and Non‐genetically Engineered Corn and Soybeans," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(1), pages 117-133, February.
    6. Zhang, Wei & van der Werf, Wopke & Swinton, Scott M., 2010. "Spatially optimal habitat management for enhancing natural control of an invasive agricultural pest: Soybean aphid," Resource and Energy Economics, Elsevier, vol. 32(4), pages 551-565, November.
    7. Chen, Xuqi & Gao, Yujuan & Gao, Zhifeng, 2022. "Impacts of color-coded nutrition facts panel and consumer responses," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322206, Agricultural and Applied Economics Association.
    8. Uematsu, Hiroki & Mishra, Ashok K., 2012. "Organic farmers or conventional farmers: Where's the money?," Ecological Economics, Elsevier, vol. 78(C), pages 55-62.
    9. Cox, William & Hanchar, John, 2016. "Agronomic and Economic Performance of Soybean as an Entry Crop to an Organic Cropping System following Conventional Corn, Spring Barley, or Soybean," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235318, Agricultural and Applied Economics Association.
    10. McBride, William D. & Greene, Catherine & Foreman, Linda & Ali, Mir, 2015. "The Profit Potential of Certified Organic Field Crop Production," Economic Research Report 262208, United States Department of Agriculture, Economic Research Service.
    11. McBride, William D. & Greene, Catherine R. & Ali, Mir B. & Foreman, Linda F., 2012. "The Structure and Profitability of Organic Field Crop Production: The Case of Wheat," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123835, Agricultural and Applied Economics Association.
    12. Delbridge, Timothy A., 2014. "Comparative Profitability of Organic and Conventional Cropping Systems: An Update to Per-Hectare and Whole-Farm Analysis," Staff Papers 164685, University of Minnesota, Department of Applied Economics.
    13. Pashaei Kamali, Farahnaz & Borges, João A.R. & Meuwissen, Miranda P.M. & de Boer, Imke J.M. & Oude Lansink, Alfons G.J.M., 2017. "Sustainability assessment of agricultural systems: The validity of expert opinion and robustness of a multi-criteria analysis," Agricultural Systems, Elsevier, vol. 157(C), pages 118-128.
    14. Dobbs, Thomas L. & Streff, Nicholas J., 2006. "Potential for the Conservation Security Program to Induce More Ecologically Diverse Crop Rotations in the Western Corn Belt," Research Reports 200601, South Dakota State University, Department of Economics.
    15. Cox, W., 2018. "Agronomic and Economic Performance of Maize, Soybean, and Wheat in Different Rotations during the Transition to an Organic Cropping System," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276954, International Association of Agricultural Economists.
    16. Delbridge, Timothy A. & King, Robert P., 2014. "The Conventional-Organic Yield Gap: Evidence from Farm-Level Data," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170561, Agricultural and Applied Economics Association.
    17. Delbridge, Timothy A. & Fernholz, Carmen & King, Robert P. & Lazarus, William, 2013. "A whole-farm profitability analysis of organic and conventional cropping systems," Agricultural Systems, Elsevier, vol. 122(C), pages 1-10.
    18. Chen, Xuqi & Gao, Zhifeng & Jiang, Yuan, 2018. "Marketing Opportunities for Organic Transitional Certification," 2018 Annual Meeting, August 5-7, Washington, D.C. 274072, Agricultural and Applied Economics Association.
    19. Dobbs, Thomas L. & Streff, Nicholas J., 2005. "Potential for the Conservation Security Program to Induce More Ecologically Diverse Crop Rotations in the Western Corn Belt," 2005 Annual meeting, July 24-27, Providence, RI 19119, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Raszap Skorbiansky, Sharon & Ferreira, Gustavo C., 2018. "Analysis of Fraud Incidents in the U.S. Organic Market," 2018 Annual Meeting, August 5-7, Washington, D.C. 273856, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Crop Production/Industries;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea08:6449. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.