Comparative Net Returns for a Forage-Based Organic Crop Rotation Volume 9 - Issue 3

Michael Langemeier*¹ and Michael O’Donnell²

• ¹Department of Agricultural Economics, Purdue University West Lafayette, Indiana
• ²Organic Crop Consultant Muncie, Indiana

Received: May 21, 2021;   Published: June 4, 2021

Corresponding author: Michael Langemeier, Department of Agricultural Economics, Purdue University West Lafayette, Indiana

DOI: 10.32474/CIACR.2021.09.000319

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Abstract

This study compares the long-run net returns to land of a conventional corn/soybean rotation to that of an organic forage-based crop rotation that includes corn, soybeans, oats, and alfalfa. The average annual net returns to land for the organic crop rotation were found to be approximately $100 per acre higher than that of the conventional corn/soybean rotation. Average net return to land estimates are sensitive to crop price, crop yield, and cost assumptions. Holding crop yields and production costs constant, organic crop prices would need to be reduced 27 percent for the average net return to land to equal that of the average net return to land for the conventional corn/soybean crop rotation. A downside risk model was used to examine the tradeoff between expected net returns to land and risk. Converting even a small proportion of acreage to an organic forage-based crop rotation improved net returns to land and reduced downside risk compared to only utilizing the conventional corn/soybean crop rotation.

Keywords:Organic crops; net return to land; downside risk

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