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The Structure and Profitability of Organic Field Crop Production: The Case of Wheat

Author

Listed:
  • McBride, William D.
  • Greene, Catherine R.
  • Ali, Mir B.
  • Foreman, Linda F.

Abstract

Results from long-term experimental trials suggest that similar yields and lower costs are possible from organic compared with conventional field crop production, but there is little information about the relative costs and returns on commercial farms. This study examines the structure and profitability of commercial wheat production using a nationwide survey of wheat producers for 2009 that includes a targeted sample of organic growers. Treatment-effect models were specified to isolate the impact of choosing the organic approach on various levels of wheat production costs. Average organic wheat yields were much lower than for conventional wheat, but per acre operating plus capital costs were also lower. Estimated operating costs per bushel for organic wheat were lower than for conventional wheat, but operating plus capital costs and total economic costs were about $2 to $4 per bushel higher. The average organic price premium in 2009 was $3.79 per bushel, enough to cover the difference in operating plus capital costs of organic versus conventional wheat production, but was short of the difference in total economic costs

Suggested Citation

  • 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.
  • Handle: RePEc:ags:aaea12:123835
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    File URL: http://ageconsearch.umn.edu/record/123835/files/AAEA%20paper-organic%20wheat.pdf
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    References listed on IDEAS

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    1. 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).
    2. 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.
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    Keywords

    Crop Production/Industries; Farm Management; Production Economics;

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