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Kentucky Ag News

Is organic corn an option worth considering?

 

University of Kentucky College of Agriculture, Food and Environment

LEXINGTON, Ky. – Organic feed corn sells at a substantial premium over conventionally raised corn, typically at 1 ½ to 2 times the conventional price. This should be reason enough for farmers to consider this alternative crop, but few do. Because of the potential opportunity for Kentucky farmers, we organized a UK Extension team and got funding from the USDA Sustainable Agriculture Research and Education program to see if organically produced corn fits in Kentucky. As part of this project, we analyzed markets, worked with farmers to grow demonstration plots, had a farmer-focused workshop, and have drafted a handbook of production and marketing practices.

 

Here are some of the highlights of this project, based on our work and the work of researchers in other states. These highlights are written in response to our most frequently asked questions.

How do you get organically certified?
The Kentucky Department of Agriculture helps in the certification process, which is not expensive. Land has to be in organic practices for three years before the first certified organic crop is harvested. Land that has been in pasture, and not sprayed, can qualify immediately. The USDA National Organic Program has a list of approved products and practices (yes, organic farmers do spray and fertilize). Practices include rotations and extensive use of cover crops.

What is the cost of production?
Production cost varies dramatically. On a per acre basis, it is typically much less than conventional corn, especially if one has access to inexpensive manure. Charlie Eselgroth, an Ohio farmer that raises both organic and conventional corn, spoke at our workshop about how costs compared at his farm. He had comparative data from the same farm showing the cost of production to be much lower on his organic land.

What about yields?
This is not as simple a question because you have to think about the whole rotation. In general, research data suggests long term yield in the range of 10 to 20% below conventional corn, but the first couple of years may have 50% lower yields.

What kinds of Rotations do Organic Grain Farmers Use?
The easiest way to answer this question is with the rotation that organic farmers do not use: a two-year rotation of corn and soybeans. Organic grain farmers typically use much longer and more diverse rotations, in order to manage fertility and weed pressure, but the specifics of the rotation depend on the farm. Farmers with livestock typically include two to three years of a forage crop; while other farmers might have a shorter rotation of corn, soybeans, a small grain, and a legume cover crop. While corn typically has the highest profit margin in all of these rotations, it is important to remember that there is an organic premium for all of these crops.

How do I manage weeds without herbicides?
Most organic farmers plant a cover crop, plow it in the spring, and do several cultivations. Other crops in the rotation help minimize weed problems, but weeds can still be an issue. There is research into no-till organic systems, but that practice is still uncertain.

How does profitability shake out?
With prices typically at a 50% to 100% premium, organic corn can be more profitable than conventional corn, even with lower yields. Because of the varied rotations and the transition period, it makes sense to look at this question over the long term. In our profitability analysis, we looked at a six-year time horizon for a farm transitioning to organic production. We found that, even with conservative estimates for organic yields and price premiums, an organic rotation can be more profitable than a conventional corn-soybean rotation. Three keys to maximizing organic profitability include: keeping production costs low, developing a transition plan that maximizes organic price premiums, and finding an organic market for all of your crops.

I sell my corn at a local grain elevator, where would I sell organic corn? How do I find out about prices?
The market for organic corn is driven by the growing market for organic livestock products – mostly dairy and poultry. Organic corn is being imported into Kentucky for milk production. Kentucky produced organic corn would replace these imports. Because most elevators in Kentucky don’t pay organic premiums, most organic growers contract their corn directly with a buyer instead of an elevator. The USDA collects organic grain prices and reports them at: http://www.ams.usda.gov/mnreports/lsbnof.pdf. For Sept. 6 – 14, the average price of yellow feed corn was $11.22 per bushel.

This article was written by Lee Meyer and Wil Martin, agriculture economists in the University of Kentucky College of Agriculture, Food and Environment. The article first appeared in the September 30 edition of Economic and Policy Update.