Organic wheat: Profitable niche market for conventional wheat producers?

Kathleen Painter, Kendall Kahl, Dennis Pittmann, Nicole Tauges and Ian Burke

No 205891, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Few cropping alternatives exist for growers in the semi-arid dryland wheat producing area in the Palouse region of the Pacific Northwest. This lack of alternatives makes producers vulnerable both from an economic and an agronomic standpoint. Characterized by its hilly landscape and deep loess soils, the Palouse is known for its record high wheat yields as well as its historically high levels of soil erosion. Wheat is the dominant crop here, with few profitable alternatives. In this study we explore the potential for increasing economic and environmental sustainability in this region by incorporating organic reduced tillage (ORT) cropping systems into conventional farming operations using results from six years of organic cropping system trials conducted near Washington State University’s Pullman campus. Could organic wheat production provide access to a more profitable market than the conventional commodity market? While organic wheat prices fluctuated from 2010 to 2014, they were consistently higher than conventional prices. Yields in organic systems may be more variable than in conventional systems due to insufficient nitrogen input, weed competition, diseases and pests, and more restricted tools to address these obstacles. Lower input costs in organic management can increase profitability, though this is not always the case. This variability highlights the need to analyze the factors that determine profitability within any given alternative cropping system to assess risk and feasibility on a regional basis. We have developed a spreadsheet tool that allows growers to adjust assumptions on yields, input costs, and crop prices and compare profitability for different cropping systems over time.

Keywords: Agribusiness; Crop Production/Industries; Farm Management; Financial Economics; Land Economics/Use; Production Economics; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies; Teaching/Communication/Extension/Profession (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205891

DOI: 10.22004/ag.econ.205891

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