The Profitability of Organic The Profitability of Organic Agriculture: Lessons from the Sustainable Agriculture Farming Systems Project (SAFS) Systems Project (SAFS) D K Dr. Karen Klonsky Kl k Dept. of Agricultural & Resource Economics University of California, Davis
Variety of research areas at Russell Ranch
Runoff plots Runoff plots
Riparian Reser e Riparian Reserve
Small plots Habitat Restoration area
Main plots Main plots
Organic plots
Farm buildings Farm buildings Conventional commercial farm
•Small plots for shorter term investigations: e.g., comparison of cover crop mixes, biofuels crops, impact of continuous cover on soil biology, comparison of drip vs furrow irrigation •Runoff plots: impact of management on runoff of nutrients and pesticides •Large plots under organic management, currently unassigned •Conventional commercial farm: surrounding land leased by neighboring grower, managed conventionally •Habitat restoration area (as mitigation for UC Davis development) •Putah Creek Riparian Reserve adjacent to Russell Ranch
Russell Ranch / SAFS History Russell Ranch / SAFS History Events
Years 1992 – 1993
Russell Ranch purchased by UC Davis Irrigated, unfertilized Sudan grass planted to create uniform soil fertility conditions soil fertility conditions
1994 ‐ 2007
Two‐year rotations of processing tomato and corn & others Organic, low input, and conventional Each system/crop combination each year
2003
SAFS relocates to Russell Ranch from Vegetable Crops facility
2003 2007 2003 ‐
Each system split into conservation tillage and standard tillage Each system split into conservation tillage and standard tillage
2008 ‐ present
Two‐year rotations of processing tomato and wheat Organic, low input, and conventional All t All systems are conservation tillage ti till
SAFS Systems and Rotations SAFS Systems and Rotations Cover crop p
Tomato
Corn
Organic
Low input
Conventional
Fall/Winter Spring/Summer Fall/Winter Spring/Summer
YEAR 1
YEAR 2
PRODUCTION PRACTICES AT SAFS PRODUCTION PRACTICES AT SAFS
Tomato Preplant Operations Tomato Preplant Organic g October/ November
Mow residue Plant cover crop
Conventional Mow residue Subsoil, disc, roll, triplane Prepare beds
December January
Spray weeds
February March
Spray weeds
April
Mow cover crop Apply compost Apply compost Ground prep Make beds
Smooth beds Starter fertilizer Starter fertilizer
May
Transplant
Transplant Sidedress fertilizer
Tomato bed management Tomato bed management 1. Strip till 1 Strip till 2. Full bed mulch 3 S i ill d il 3. Strip till detail
1
3
2
Fertility Organic
TOMATO Low Input
Cover crop
1994 ‐ 2006
2004 – 2006 only
Chicken manure
Rates reduced after 1997 after 1997
Synthetic N
None
Organic Cover crop Cover crop
1994 ‐ 2006 1994
Chicken manure
Same as tomato
Synthetic N
None
Conventional
1994 – 2003 = conv 2004 – 2006 reduced
15‐15‐15, ammonium sulfate
CORN Low Input
Conventional
1994 ‐ 2006
None
Urea
Fertility ‐ 2007 Fertility Cover crop Poultry compost
Organic
TOMATO Low Input
Bell beans/vetch
Bell beans/vetch
4 tons Preplant 15 – 15 ‐15 @ 45 lbs.
Synthetic N
Cover crop Poultry compost Synthetic N
Conventional
Organic
CORN Low Input
Bell beans/vetch
Bell beans/vetch
Preplant 15‐15‐15 @ 45 lbs. Sidedress 21 0 0 24 @100 lbs 21‐0‐0‐24 @100 lbs.
Conventional
4 tons Post plant 46‐0‐0 @ 165 lbs. Sidedress 15‐15‐15 @ 45 lbs.
Oats/vetch/bell bean mix Oats/vetch/bell bean mix
Reel chopping cover crop to initiate d d dry down prior to incorporation
Cover crop and incorporation p p 2. Bell bean/wheat cover crop 2 Bell bean/wheat cover crop 3. Bed disc for full incorporation 4. Flail mowing cover crop l il i
Weed control ‐ 2007 Weed control Organic
TOMATO Low Input
Conventional
Tillage
Strip till 5X Cultivate 4X
Strip till 5X Cultivate 3X
Strip till 2X Cultivate 2X
Hand hoeingg
35 hours
11 hours
6 hours
May July
February May July
Herbicide
Tillage
Organic
CORN Low Input
Cultivate 3X
Cultivate 2X
Conventional Cultivate 2X
Herbicide bi id May
February Aprilil May
Pest control ‐ 2007 Pest control TOMATO Low Input
Conventional
Insecticide/Miticide
Oberon 8.5 oz.
Oberon 8.5 oz.
Worms
Sulfur 20 lbs.
Sulfur 20 lbs.
Organic
Cultural Costs
COST OF PRODUCTOIN COST OF PRODUCTOIN
Costs of Production by Management Category Costs of Production by Management Category Fertilityy
Weed control
Pest control
Tomato conventional
Tomato ‐ organic
Field corn ‐ conventional
Field corn ‐ organic 0
100
200
300
$ per Acre
400
500
600
700
800
Cost of Production ‐ Corn Cost of Production Organic ‐ $465/A Organic ‐ Manage residue $17 4%
Ground prep $34 7%
Conventional ‐ $390/A Conventional ‐ Manage Ground residue prep $17 $ $23 $23 4% 6%
Cover crop Cover crop $75 16%
Compost $171 37%
Weed control $29 6%
Plant $86 22%
Irrigate $80 21%
Plant $56 12%
Irrigate $83 18%
Weed control $85 22%
Fertilize $99 25%
Comparison of Cultural Costs – Corn Organic $465/A ~ Conventional $390/A $23 $23 $34
G Ground prep d Cover crop
$75
W d Weed control t l
$85 $85
$29
Plant
$56
$86
Conventional $80 $80 $83
I i Irrigate
Organic
$99
Fertilizer/Compost
$171
$17 $17 $17
Manage residue 0
50
100 $ per Acre
150
200
Cost of Production ‐ Tomato Cost of Production Organic ‐ $1,432/A Organic ‐ $1 432/A Manage Ground Compost residue prep $184 $7 $45 Pest 13% Pest 1% 3% control $65 5%
Conventional ‐ $1,012/A Conventional ‐ $1 012/A
Cover crop $72 $72 5%
Fertilize $96 10% Weed control $379 26%
Irrigate $105 7%
Ground Manage prep residue $13 $39 $39 1% 4% Weed control $205 $205 20%
Pest control $73 7% Irrigate $90 9%
Plant $575 40%
Plant $496 49%
Comparison of Cultural Costs – Tomato Organic $1,432/A ~ Conventional $1,012/A 13 45
Ground prep Ground prep
0
Cover crop
72
Weed control
379 496
Plant
575
90 105
Irrigate
96
Fertilizer/Compost
Conventional Organic
184
73 65
Insect control Manage residue
7
0
39
200
400 $ per Acre
600
800
Yield and Price
REVENUE
Processing Tomato Harvester Processing Tomato Harvester
P Processing Tomato Harvester i T H
Processing Tomato Harvest Processing Tomato Harvest
Average Tomato Yields 2003 ‐ 2007 35 30
Ton ns per acre
25 20 15 10 5 0
Conv CT Conv CT
Conv ST Conv ST
Low CT Low CT
Low ST Low ST
Org CT Org CT
Org ST Org ST
2007 Tomato Yields 2007 Tomato Yields 45 40
Ton ns per acre
35 30 25 20 15 10 5 0
Conv CT Conv CT
Conv ST Conv ST
Low CT Low CT
Low ST Low ST
Org CT Org CT
Org ST Org ST
Average Corn Yields 2003 ‐ 2007 12000
Ton ns per acre
10000 8000 6000 4000 2000 0
Conv CT Conv CT
Conv ST Conv ST
Low CT Low CT
Low ST Low ST
Org CT Org CT
Org ST Org ST
2007 Corn Yields 2007 Corn Yields 45 40 35 30 25 20 15 10 5 0 Conv CT Conv CT
Conv ST Conv ST
Low CT Low CT
Low ST Low ST
Org CT Org CT
Org ST Org ST
Organic and Conventional Prices Processing Tomatoes 120 100
$ per ton
80 60
Organic Conventional
40 20 0 89
91
93
95
97
99
01
03
05
07
09
Organic and Conventional Prices Corn for Grain f 300 250
$ per ton
200 150
Organic Conventional
100 50 0 92
94
96
98
00
02
04
06
2007
NET RETURNS NET RETURNS
Revenue, Operating Costs, and Net Returns
PROCESSING TOMATOES 2007 PROCESSING TOMATOES 2007 Organic g
Conventional
Low Input p
3,500 3,000 2,500
2,865 2,190
2,000 1,500
1,644
1 487 1,487 1,221 1,038 1,061
1,000
1,152 426 426
500 ‐ Revenue
Cost
Net returns Net returns
Runoff as a Percentage of Rainfall Events Cover crop Cover crop – organic and low input organic and low input Manure – organic only Organic g
Low Input p
Conventional
38%
36%
18% 10% 8% 3% 3%
4% 3%
Feb. 7
Feb. 9
3% 2%
2% Feb. 18
2% 3%
Feb. 20
4%
March 9
Revenue, Operating Costs, and Net Returns
CORN 2007 CORN 2007 Organic g 1,200
Conventional
Low Input p
1,075 1,074
1,000 756
800 590
600 600 400
485 485 312
318
265
200 200 47 ‐ Revenue
Cost
Net returns Net returns
RESOURCE USE RESOURCE USE
Labor Hours by Management Category Fi ld C Field Crops Machine Labor
Hand Labor
Tomato conventional
Tomato ‐ organic
Field corn ‐ conventional
Field corn ‐ organic 0
10
20 Hours per Acre
30
40
50
Fuel Use for Cultural Practices Fuel Use for Cultural Practices Fuel (Gallons/Acre) O
C
Tomatoes
57
51
Corn
33
37
Times over the Field O
C
Average Water Use Average Water Use Corn 50
44 37
40
Acre in nches
Tomato
49
31 30
29 19
20 10 0
Organic
Low Input Low Input
Conventional
Sources of Nitrogen Sources of Nitrogen Organic Tomato
Low Input Tomato
Cover crop
1994 ‐ 2006
2004 – 2006 only
Chicken manure
Rates reduced after 1997 after 1997
Synthetic N
None
1994 – 2003 = conv 2004 – 2006 reduced
15‐15‐15, ammonium sulfate
Organic Corn
Low Input Corn
Conventional Corn
Cover crop Cover crop
Conventional Tomato
1994 ‐ 2006
Chicken manure
Higher than for tomatoes
Synthetic N
None
None
Urea
Corn Nitrogen Inputs 02 ‐ 06 Corn Nitrogen Inputs 02 250
Kg N p per hectare e
200 150 Manure Cover Crop Cover Crop
100
Fertilizer
50 0 Conventional
Organic
Low Input Low Input
Tomato Nitrogen Inputs 04 ‐ 06 Tomato Nitrogen Inputs 04 250
Kg N p per hectare e
200 150 Manure Fertilizer
100
Cover Crop
50 0 Conventional
Organic
Low Input Low Input
ENVIRONMENTAL IMPACTS ENVIRONMENTAL IMPACTS
Corn Nitrogen Inputs, Outputs, Balance l 250
Kg N p per hectare e
200 150 Inputs Output
100
Balance
50 0 Conventional
Organic
Low Input Low Input
Tomato Nitrogen Inputs, Outputs, Balance l 250
Kg N p per hectare e
200 150 Inputs Output
100
Balance
50 0 Conventional
Organic
Low Input Low Input
Nitrogen Balance (Corn and Tomato) Soil Storage and Unaccounted Soil Storage and Unaccounted Accumulated 1994 ‐ 2006 4,000 3,500 Kg N p per hectare e
3,000 2,500 2,000
Unaccounted
1,500
Soil Storage
1,000 500 0 Organic
Low Input Low Input
Conventional
Nitrous Oxide Emissions Nitrous Oxide Emissions 450
N2O (mg/M2/hourr)
400 350 300 250 No cover
200
Cover Crop
150 100 50 0 C Conservation Tillage ti Till
St d d Till Standard Tillage
Nitrous Oxide Emissions Nitrous Oxide Emissions • Emissions Emissions were higher with winter legume were higher with winter legume cover crops for both tillage systems • This may be the result of adding N to the soil This may be the result of adding N to the soil in a form that can be transformed into N2O under ideal soil moisture and temperature under ideal soil moisture and temperature conditions
Soil organic carbon in the top 30 cm Soil organic carbon in the top 30 cm 55
Mg C per hectare e
50
Cover crop every year
High input manure
45
Cover crop every other year
Cover crop every year
Organic Low Input Low Input
40
Conventional
Conservation Tillage
35 30 1993
1995
1997
1999
2001
2003
2005
2007
Runoff as a Percentage of Rainfall Events Standard Tillage ‐ 1999 March 9
4% 3% 2%
F b 20 Feb. 20
4% 2%
Feb. 18 Feb. 18
Feb. 9
7‐Feb
35% Conventional
10% 8%
2%
Low Input Low Input Organic 38%
4% 4% 3% 3%
18%
Conventional — Winter Fallowed
Organic and Low Input — Winter Cover Cropped
Runoff Water Quality ‐ 2007 Runoff Water Quality Conventional
Low Input
Organic
Applied
Detected
Applied
Detected
Applied
Detected
Tillam (herbicide)
X
x
X
x
‐‐‐‐‐‐
‐‐‐‐‐‐
Trifluralin (pre‐emergent herbicide)
X
‐‐‐‐‐
X
‐‐‐‐‐‐
‐‐‐‐‐‐
‐‐‐‐‐‐
M l hl (herbicide) Metolachlor (h bi id )
X
X
X
X
‐‐‐‐‐‐
‐‐‐‐‐‐
L‐cyhalothrin (pyrethroid insecticide)
X
‐‐‐‐‐‐
X
‐‐‐‐‐‐
‐‐‐‐‐‐
‐‐‐‐‐‐
Runoff Water Quality ‐ 2007 Low Input and Conventional Systems Standard Tillage
Conservation Tillage
% of Samples
% of Samples
Tillam (herbicide)
.05%
‐‐‐‐‐‐
Trifluralin (pre‐emergent herbicide)
‐‐‐‐‐‐
‐‐‐‐‐‐
Metolachlor (herbicide)
63%
25%
L‐cyhalothrin (pyrethroid insecticide)
‐‐‐‐‐‐
‐‐‐‐‐‐
Runoff Water Quality ‐ 2007 Pesticide Concentration Co oncentratio on in ppb (m mg/ml)
Low Input p
Conventional
0.35 0.3 0 25 0.25 0.2 0.15 0.1 0.05 0 Conservation Tillage
Standard Tillage
Note: No pesticides were found in organic system runoff
Sweeping Generalizations About Organic Agriculture Organic Agriculture • • • • • • •
(at least in California) Relies on cover crops, compost, and sometimes liquid p, p , q fertilizers Fertility costs more than for conventional Only crops that rely on hand hoeing for weed control use hand hoeing in organic When used labor costs for hand hoeing are higher When used, labor costs for hand hoeing are higher Fewer pest and disease control tools are available Some crops are easier to grow organically than others Some crops are easier to grow organically than others Organic price premiums vary from crop to crop but are not trending downward over time
Cover Crop Impacts Not Captured in Cost and Return Analyses d l • • • • • • • •
May delay planting in Spring May delay planting in Spring May replace a cash crop in a rotation Reduces winter runoff Reduces winter runoff Improves the quality of winter runoff I Increases carbon sequestration b t ti May increase greenhouse gas emissions Provides habitat Reduces erosion