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NDSU Extension Service, Published February 10 2010

Organic crop budgets for 2010 available from NDSU

FARGO - The North Dakota State University Extension Service is offering projected organic crop budgets for south-central North Dakota.

While these budgets are area-specific, the information in the 13-page Extension publication may be of value to organic producers in other parts of the state, as well as conventional farmers interested in organic production, according to Andy Swenson, NDSU Extension farm management specialist.

The organic crop budgets included in the publication are for spring wheat, durum, feed barley, corn, oil sunflowers, soybeans, oats, flax, field peas, millet, buckwheat, lentils, rye and green manure.

"A primary assumption for all the crop budgets is that the marketable yield of organic production will average about 70 to 75 percent of conventional crop yields," Swenson says. However, experienced organic growers have achieved higher yields. New organic growers and those with less success in managing pests and fertility under an organic system may find it difficult to achieve 70 percent of conventional yields. Also, to meet stringent standards, the cleanout for organic grain typically is greater than for conventional markets. This also is a factor in estimating marketable yields."

Sales of organic food had been increasing by about 20 percent annually until the economic recession hit. Swenson, who co-authored the publication, discussed the current market conditions with organic growers, brokers and processors.

"Demand has been noticeably impacted by the downturn in the general economy," Swenson says. "The price of organic feed grain dropped significantly because of a slackening in the demand for organic livestock products. Because of uncertainty in demand, processors of organic wheat have been more tentative in their purchases. This has made price discovery more difficult. Nonetheless, most organic grains still sell at a significant premium to conventionally grown crops. Particularly strong are food-quality soybeans at $19 to $21 per bushel and flax at $20 to $25 per bushel."

Hauling grain longer distances to market and cleaning grain are important factors for an organic producer when evaluating price and costs. Contracts may specify the grower as responsible for both, either one or neither.

"Organic producers need to know the importance of carefully reading all the production contracts they enter into to make sure they understand all the terms, especially those related to cleaning, delivery, quality standards and timing of payment," Swenson says.

The budgets use "farm-gate" prices in which the buyer arranges and pays the cost of transporting the grain from the farm. Another common pricing method is freight on board, with a delivery point specified by the buyer. In this instance, the farmer pays for the hauling. Generally, the buyer pays for cleaning, and the pricing is based on quantity after cleaning.

Swenson emphasizes that it is usually not realistic to use individual crop profitability as the main criteria for crop selection. The crop rotation must provide fertility and minimize the risk of pest and grain quality problems. Chemical fertilizers and pesticides cannot be used to treat a nutrient deficiency or subdue a pest problem. A green manure fallow crop every third, fourth or fifth year is common.

Also included in the publication are two examples of four-year organic crop rotations. Rotations are the essence of an organic production system.

"The principal rule of organic production is to rotate crops to break pest cycles," says Brad Brummond, cropping systems agent with the NDSU Extension Service in Walsh County. "The same crop should never be grown consecutively, nor should crops that have similarly sized seeds be grown back to back if the previous crop is expected to become a 'weed' in the subsequent crop."

Brummond, who specializes in organic production methods, is a co-author of the publication.

The projected 2010 organic crop budget is available on the Web at http://www.ext.nodak.edu/extpubs/ecguides.htm. Also available on the Web site is an Excel worksheet for producers to enter their own numbers and rotations to see the projected impact on cash flow. For more information on organic crop rotations and organic management practices, contact Brummond at (701) 284-6624 or by e-mail at bradley.brummond@ndsu.edu.

In addition, conventional farmers interested in organic production can consult another publication developed by the NDSU Extension Service. "Organic Farming:

Is It For Me?" (A-1181) is available at county offices of the NDSU Extension Service or at http://www.ext.nodak.edu/extpubs/plantsci/crops/a1181w.htm.