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Comparing economic performance of organic and conventional U.S. beef farms using matching samples

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  • Gillespie, Jeffrey
  • Nehring, Richard

Abstract

Economic performance measures of organic and transitioning-to-organic cow–calf farms are compared with those of non-organic cow–calf farms. A method of matching samples is used for the comparison, estimating sample average treatment effects for the subpopulation of the treated. Each organic farm is matched with one non-organic farm that is involved in the same beef industry segments and farm size classes, and in the same region. Furthermore, farmer demographic, farming system, and technology variables are used to identify matches. Bias is reduced by estimating separate weighted regression functions for the treated and untreated groups. Results suggest that higher cost of organic production is due primarily to higher capital recovery, taxes and insurance, and overhead costs. Evidence is found for differences in beef enterprise profitability by organic status.

Suggested Citation

  • Gillespie, Jeffrey & Nehring, Richard, 2013. "Comparing economic performance of organic and conventional U.S. beef farms using matching samples," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 1-15.
    • Handle: RePEc:ags:aareaj:241866
    DOI: 10.22004/ag.econ.241866
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    4. Nguyen Khanh Doanh & Nguyen Thi Thu Thuong & Yoon Heo, 2018. "Impact of Conversion to Organic Tea Cultivation on Household Income in the Mountainous Areas of Northern Vietnam," Sustainability, MDPI, vol. 10(12), pages 1-21, November.
    5. Froehlich, Anderson G. & Melo, Andrea S.S.A. & Sampaio, Breno, 2018. "Comparing the Profitability of Organic and Conventional Production in Family Farming: Empirical Evidence From Brazil," Ecological Economics, Elsevier, vol. 150(C), pages 307-314.
    6. Rebecca Buttinelli & Raffaele Cortignani & Gabriele Dono, 2021. "Financial sustainability in Italian Organic Farms: An analysis of the FADN Sample," Economia agro-alimentare, FrancoAngeli Editore, vol. 23(3), pages 1-32.
    7. Horrillo, A. & Escribano, M. & Mesias, F.J. & Elghannam, A. & Gaspar, P., 2016. "Is there a future for organic production in high ecological value ecosystems?," Agricultural Systems, Elsevier, vol. 143(C), pages 114-125.
    8. Zhen, Huayang & Qiao, Yuhui & Zhao, Haijun & Ju, Xuehai & Zanoli, Raffaele & Waqas, Muhammad Ahmed & Lun, Fei & Knudsen, Marie Trydeman, 2022. "Developing a conceptual model to quantify eco-compensation based on environmental and economic cost-benefit analysis for promoting the ecologically intensified agriculture," Ecosystem Services, Elsevier, vol. 56(C).

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