Jason and Jerome Berning aren't that excited about the chances for $4 corn and $10 soybeans. They sold theirs for $8-12 and $15-20, respectively.
That's the price paid by organic dairies, organic meat and other food manufacturers for corn and soybeans grown without herbicides, insecticides and fungicides.
“We have to use a rotary hoe just about every time it rains early on,” says Jason, who joined his father as an organic producer seven years ago near Scott City and Marienthal, KS. “But the prices we receive for organic crops make it worth it.”
The Bernings grow corn, soybeans, wheat, barley, grain sorghum and triticale. Other than a separate field Jerome is still transitioning into organic, all crops are free of chemicals.
They are among a growing number of farmers looking to find their niche in organic. And why not?
More consumers are demanding food products free of anything that isn't natural. Just step into a Whole Foods Market and dodge the many shoppers picking out the best looking vegetables, cuts of meat and other foods — all organic.
Local supermarket shelves are devoting more space to organic/natural foods. There are often as many brands of organic/natural dairy products as there are conventional ones.
MANY CATTLE PRODUCERS and feeders often have several pens of natural cattle in higher demand by packers and consumers. Those cattle, or natural swine or natural poultry, must eat non-biotech or other non-chemically grown grain.
Kathleen Delate, Iowa State University (ISU) organic specialist, says there are about 10,000 organic farmers nationwide, compared to about 8,300 in 2005. Organic corn acres total about 131,000, compared to about 123,000 for soybeans. Iowa growers farm about 60,000 acres of organic beans and 40,000 of organic corn.
“In 2005, there were?4.1 million acres of total organic production,” says Delate, noting that number is likely much higher today.
“More organic feed and pasture is needed to keep up with the demand for organic livestock products. The price of organic feed has risen, so farmers are faced with the decision to buy feed or grow their own,” Delate says.
Organic sales have more than doubled in the past five years, reaching $16.9 billion, according to the Organic Trade Association. Demand for organic crops currently exceeds supply, the group says.
Jerome Berning started going organic in 1989. “I wanted to diversify; to do something that would help the bottom line,” he says. “Organic was intriguing.”
He started with five acres of dry-land blue corn. That expanded more every year to about 400 total acres. Most production is now under irrigation, which helps generate 180-200 bu./acre on average for corn and about 50 bu./acre for beans.
One can't just stop applying chemicals and call it organic. A typical field must be chemical-free for at least three years. Growers must keep detailed records of fertilizer (natural, of course) applications, planting dates, dates for cultivation and manual hoeing, other field work, harvesting and storage.
Fields must be organic certified by a USDA National Organic Program-approved agency; there are several nationwide. The Bernings are certified by Indiana Certified Organic. They market their corn and beans through Kansas Organic Producers and via a broker.
“Finding a good market is essential,” says John Kennicker, ISU Extension sustainable ag specialist, Creston, IA. “Growers really need to do their homework and follow-up in checking out markets. A good local market is needed if possible.”
Of course, more field time is usually needed for organic farming. There are no Roundup Ready varieties allowed. No Bt allowed. No biotech, period. Seed cannot be treated for insects or diseases.
“There are many challenges that farmers perceive as difficult their first years out of conventional farming,” says Delate. “Farmers in Iowa will cite weed management as No. 1, but in other parts of the country it may be building soil fertility.”
The Bernings use an “under cutter” cultivating system, in which they knife below wheat stubble that has been no-tilled into corn stalks on their irrigated acres. “We leave the stubble on the ground to help prevent blowing in the winter,” says Jason. “We also have to hire hoe hands to handle weed breakouts.”
Beneficial insects are plentiful at the Berning farms to help control the bad bugs.
JASON SAYS THE cost of becoming certified organic was about $2,000. He received a $500 rebate from the Kansas Agriculture Department as an incentive to go sustainable.
But the return on corn and soybean prices twice as high as the local elevator bid make it worthwhile.
Jason says that other than machinery, fuel, seed and his labor cost, the only other corn input cost is about $60/acre for manure fertilizer. “Our seed is about $35/acre,” he says. “Diesel is expensive, but our overall costs are much lower than for conventional corn. Our only other inputs for soybeans are for inoculant.”
ISU crop production enterprise budgets give growers an idea of what to expect in variable and fixed costs. The organic corn budget uses February 2008 figures, based on organic corn yielding 150 bu./acre and priced at $9.25, says Craig Chase, Extension farm management specialist.
Fixed machinery costs were estimated by ISU at $30.20/acre, with variable costs at $27.10, he says. Those costs include preharvest tasks of running a moldboard and tandem disk, injecting liquid swine manure for fertilizer, field cultivating, planting, running a rotary hoe and further cultivating.
OTHER VARIABLE COSTS per acre included about $73.60 for seed, $22 for crop insurance, $7 for miscellaneous expenses and about $7 in preharvest interest (manure fertilizer costs may also be needed, in the $25-60 range).
Harvest fixed costs were $24.60 and variable costs $47.75. Land, with an estimated $225 cash rent, put total fixed costs around $305/acre, or $2.03/bu., with variable costs at $184.37, or $1.23/bu.
Returns over variable costs were $1,203/acre. Returns over total cost were $898/acre. Chase says that compares to a February 2008 conventional corn budget of $810/acre in receipts for $4.50 corn and a $209.43/acre return over all total costs.
An organic soybean budget shows that a 40-bu. yield at about $16-20/bu. would generate $784/acre in sales. By deducting production costs, the return is $676.64 over variable costs and $375.86 over total costs. That compares to $525/acre for conventional soybean receipts for $10.50 beans and a return over total costs of $107.50/acre, says Chase.
An organic rotation would likely need to include small grains and, in many cases, hay or pasture. More ISU crop enterprise budgets can be found at www.agmrc.org/agmrc/business/; click on Operating a Business on the left side, then scroll down to Organic Production. Producers can enter their own information to determine their individual estimated return.
Jason Berning says there are also mental rewards in organic production. “I like the challenge of having to think how to manage the system,” he says.
USDA's organic program site is www.ams.usda.gov/nop/indexNet.htm. The Iowa Organic Association (www.iowaorganic.org/index.html) has additional information for recommendations. Many of these and other organic sites have links to many more sites.
Government entities and some organic food companies are offering help to growers interested in going organic, says Jim Slama, president of the Chicago area FamilyFarmed.org and Sustain, groups that promote environmentally friendly food and fiber production.
The new Illinois Food, Farm and Jobs Act hopes to make Illinois the Midwest leader in local and organic food and fiber production, notes Slama, and allow local growers to tap into the state's $500 million market for organic.
In addition, Whole Foods Market is offering a $10 million program to provide low-interest loans to Midwest producers and family farmers through a Local Producer Loan Program. For more on the program go to www.FamilyFarmed.org.
The Organic Farming Research Foundation (http://ofrf.org/) and other groups are working with Congress to include more cost-sharing support for transitioning and organic farmers in the new farm bill.
More organic information is available at USDA's organic program site: www.ams.usda.gov/nop/indexNet.htm.