IDEAS home Printed from https://ideas.repec.org/p/ags/uersrr/262208.html
   My bibliography  Save this paper

The Profit Potential of Certified Organic Field Crop Production

Author

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

Abstract

Organic crop acres in the United States more than doubled between 2002 and 2011 as acreage increased from 1.3 to over 3 million acres. While acreage for some major field crops increased substantially during this period, growth was more modest or had stalled for others. This study examines the profitability of corn, wheat, and soybean production using national survey data and finds that significant economic returns are possible from organic production of these crops. The main reason for higher per-bushel returns to organic production is the price premiums paid for organic crops. Despite potentially higher returns, the adoption of organic field crop production has been slow and is challenging due to such factors as achieving effective weed control and the processes involved with organic certification.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:uersrr:262208
    DOI: 10.22004/ag.econ.262208
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/262208/files/53409_err188.pdf
    Download Restriction: no

    File URL: https://ageconsearch.umn.edu/record/262208/files/53409_err188.pdf?subformat=pdfa
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.262208?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. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    2. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 79-101, March.
    3. 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.
    4. Clark, Samuel F., 2009. "“The Profitability of Transitioning to Organic Grain Crops in Indiana”," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 91(5), pages 1-9, August.
    5. Sascha O. Becker & Marco Caliendo, 2007. "Sensitivity analysis for average treatment effects," Stata Journal, StataCorp LP, vol. 7(1), pages 71-83, February.
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    7. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    8. Nordquist, Dale & Dvergsten, Ron & Joerger, Richard & Moynihan, Meg, 2012. "2011 Organic Farm Performance in Minnesota," CFFM Reports 293327, University of Minnesota, Center for Farm Financial Management.
    9. 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.
    10. Liu, Xiangping & Lynch, Lori, 2007. "Do Agricultural Preservation Programs Affect Farmland Conversion?," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9764, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    12. James Heckman & Salvador Navarro-Lozano, 2004. "Using Matching, Instrumental Variables, and Control Functions to Estimate Economic Choice Models," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 30-57, February.
    13. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
    14. Samuel F. Clark, 2009. "The Profitability of Transitioning to Organic Grain Crops in Indiana," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1497-1504.
    15. Carlos D. Mayen & Joseph V. Balagtas & Corinne E. Alexander, 2010. "Technology Adoption and Technical Efficiency: Organic and Conventional Dairy Farms in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 181-195.
    16. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(2), pages 261-294.
    Full references (including those not matched with items on IDEAS)

    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. Uematsu, Hiroki & Mishra, Ashok K., 2012. "Organic farmers or conventional farmers: Where's the money?," Ecological Economics, Elsevier, vol. 78(C), pages 55-62.
    2. Ashok K. Mishra & Anjani Kumar & Pramod K. Joshi & Alwin D'Souza, 2018. "Cooperatives, contract farming, and farm size: The case of tomato producers in Nepal," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 865-886, October.
    3. Naureen Fatema & Shahriar Kibriya, 2018. "Givers of great dinners know few enemies: The impact of household food sufficiency and food sharing on low intensity interhousehold and community conflict in Eastern Democratic Republic of Congo," HiCN Working Papers 267, Households in Conflict Network.
    4. Mishra, Ashok K. & Kumar, Anjani & Joshi, Pramod K. & D'souza, Alwin, 2016. "Impact of contracts in high yielding varieties seed production on profits and yield: The case of Nepal," Food Policy, Elsevier, vol. 62(C), pages 110-121.
    5. Marco Caliendo & Michel Clement & Dominik Papies & Sabine Scheel-Kopeinig, 2012. "Research Note ---The Cost Impact of Spam Filters: Measuring the Effect of Information System Technologies in Organizations," Information Systems Research, INFORMS, vol. 23(3-part-2), pages 1068-1080, September.
    6. Michel Clement & Björn Christensen & Sönke Albers & Steffen Guldner, 2007. "Was bringt ein Oscar im Filmgeschäft? Eine empirische Analyse unter Berücksichtigung des Selektionseffekts," Schmalenbach Journal of Business Research, Springer, vol. 59(2), pages 198-220, March.
    7. Elizaphan J. O. Rao & Bernhard Brümmer & Matin Qaim, 2012. "Farmer Participation in Supermarket Channels, Production Technology, and Efficiency: The Case of Vegetables in Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(4), pages 891-912.
    8. Grass, Martin & Zeller, Manfred, 2011. "Rural Employment and Income Effects of a Jatropha Plantation in Madagascar," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 50(4), pages 1-22.
    9. Khanal, Aditya R. & Mishra, Sachin K & Honey, Ummey, 2018. "Certified organic food production, financial performance, and farm size: An unconditional quantile regression approach," Land Use Policy, Elsevier, vol. 78(C), pages 367-376.
    10. 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.
    11. Sènakpon Fidèle A. Dedehouanou & Luca Tiberti & Hilaire G. Houeninvo & Djohodo Inès Monwanou, 2019. "Working while studying: Employment premium or penalty for youth in Benin?," Working Papers PMMA 2019-03, PEP-PMMA.
    12. Dettmann, E. & Becker, C. & Schmeißer, C., 2011. "Distance functions for matching in small samples," Computational Statistics & Data Analysis, Elsevier, vol. 55(5), pages 1942-1960, May.
    13. Apps, Patricia & Mendolia, Silvia & Walker, Ian, 2013. "The impact of pre-school on adolescents’ outcomes: Evidence from a recent English cohort," Economics of Education Review, Elsevier, vol. 37(C), pages 183-199.
    14. Fatema, Naureen, 2019. "Can land title reduce low-intensity interhousehold conflict incidences and associated damages in eastern DRC?," World Development, Elsevier, vol. 123(C), pages 1-1.
    15. Del Prete, Davide & Ghins, Léopold & Magrini, Emiliano & Pauw, Karl, 2019. "Land consolidation, specialization and household diets: Evidence from Rwanda," Food Policy, Elsevier, vol. 83(C), pages 139-149.
    16. Tommaso Nannicini, 2007. "Simulation-based sensitivity analysis for matching estimators," Stata Journal, StataCorp LP, vol. 7(3), pages 334-350, September.
    17. Esaka, Taro, 2013. "Evaluating the effect of de facto pegs on currency crises," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 943-963.
    18. Edlira Shehu & Tim Prostka & Christina Schmidt-Stölting & Michel Clement & Eva Blömeke, 2014. "The influence of book advertising on sales in the German fiction book market," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(2), pages 109-130, May.
    19. Michael J. Peel, 2018. "Addressing Unobserved Selection Bias in Accounting Studies: The Bias Minimization Method," European Accounting Review, Taylor & Francis Journals, vol. 27(1), pages 173-183, January.
    20. Eva Crespo-Cebada & Francisco Pedraja-Chaparro & Daniel Santín, 2014. "Does school ownership matter? An unbiased efficiency comparison for regions of Spain," Journal of Productivity Analysis, Springer, vol. 41(1), pages 153-172, February.

    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:uersrr:262208. 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/ersgvus.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.