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Veteran Advisor
Posts: 4,279
Registered: ‎02-11-2013

Re: If you can't beat them....join them

[ Edited ]

Just for discussion, might pencil out if organic,
Figure tillage, not chemical, perhaps a 50% reduction
In yeild. Look at
Albert Lee seed get your seed price,
Then look at how you would do with conventional
Then the organic figures I mentioned.

We used to have a fellow from the NW that was
In the organic business

Veteran Advisor
Posts: 731
Registered: ‎05-13-2010

Re: If you can't beat them....join them

So where do you sell organic wheat? Best I could find is have your own bins and haul to Denver. I know there’s a mill in Leoti but what I ve heard sounds like they have enough supply
Senior Advisor
Posts: 1,208
Registered: ‎05-20-2010

Re: If you can't beat them....join them

The farms doing organic in Indiana that are Peers of ours are taking a zero

yield hit. Organic corn in 2018 average 229 across 240 acres for example.

Yes, you have to change some things, like have cattle on the farm you

feed a couple years of alfalfa too and beef/dairy manure to get the N and

lots of cover crops etc

 

Bottom line is from S-Oh, thru NW-IN, the organic yield hit can be

managed pretty well. The issue is the transition, and the long-term

impacts of it (weed seed bank) tillage burns carbon, so you need the

grazed beef to help rebuild it in the off corn years, etc.

 

Organic is like any other farming technique, pros and cons. IF you are just going

to do current salt based fertility and use tillage instead of chemicals, yes

the yield drag will be quite high. If you are going to actually operate an

organic farm with multiple crops, multiple species, and multiple crop

rotations and even multiple markets, there can be no yield drag most of

the time. just what I have gleaned in studying it.

 

We are looking at going to organic pork as a way to stop growing the

stupid other white meat that only losses money.

Veteran Advisor
Posts: 4,279
Registered: ‎02-11-2013

Re: If you can't beat them....join them

Clayton, I'll ask the market people there.
Another possibility is Hudson flour mill
In Stafford county...but don't know how
They source.
Veteran Advisor
Posts: 731
Registered: ‎05-13-2010

Re: If you can't beat them....join them

I did not realize Hudson's did organic.  Not really surprised though.  So where does Walmart source their organic stuff?  China?? Like we can really trust that.

Frequent Contributor
Posts: 39
Registered: ‎04-04-2011

Re: If you can't beat them....join them

Here is the thing about "Marketing".

Trying to establish the right CBOT positions to price your crops is not marketing.

Hedging ... sure... but not marketing

 

Marketing is finding the right customers who are willing to spend the money to get what you produce.

Who do you want to be your customers?

 

With organic grains, if first starting out, it would be a good idea to talk with prospective buyers first to see what varieties they are looking for..

They often offer contracts, so then you know a price and market ahead of time. 

For markets like feed corn and feed soybeans, it is becoming more like a commodity, so it is not hard to find a home for your production without having a contract ahead of time.

From my experience, having on farm storage is almost a necessity, although there are some buyers who have storage to take some production at harvest.

Be prepared for some transportation. For me, most of my buyers facilities are 1 -2 hours away.

 

I have had several hundred acres certified organic since 1999

My first surprise is how marketing was different.

When buyers found out you had, or were considering growing organic grains that they wanted, the next question was "what are you asking?" 

It turned out there was often considerable room to negotiate price.

One time I was approached about growing a specific soybean variety for a customer, and they offered a fairly good price for the time.. I hesitated to agree, and suggested I would maybe do it for $2.00 a bushel more. 10 seconds later, that was the new price.

 

It has changed since then as organic grains have become more of a commodity, with a tighter price range, but there still is room to negotiate, as it is a still largely a demand driven market..

 

As far as production goes, I have had my share of disasters, but once you get a system clicking, the yields can be respectable as Time was suggesting in his post.

In my operation I have a farm in another county that I have been farming conventionally for the past 20 years using typical GMO seeds, fertilizer and herbicide programs as provided by a local coop

My home farm is the one certified organic. 

It makes for an interesting comparison. 

There have been a few years when the organic yields were actually better.

In fact, my all time highest yielding soybeans were organic soybeans.

 

One of the difficult parts of organic production is that if things go wrong, like unusual weed or insect pressure, there is often not a readily available plan B to fix the problem. That can be hard on a person.

 

 

 

 

Honored Advisor
Posts: 17,913
Registered: ‎05-13-2010

Re: If you can't beat them....join them

Just my experience with organics and what I learned on the head of a pin.  Beans are the bread & butter and they`re are good $20-$30 bushel or whatever, however you could only raise them 2 years out of a 5 year plan, I hope you like oats and hay, because 2 years of the 5 year plan have to be oats or hay and there`s zero premium for organic oats or hay.  Organic corn is good $5-$10 bushel or whatever, but no commercial fertilizer so you better have access to hog manure.  

 

The thing about the organic beans are, you raise them and store them until May and then they pick them up and put them on a boat to Japan in June/July.  When Japan cuts the check, them your broker can pay you and if everyone is on the up and up, you`ll get your pay for last year`s beans in the following August.  So you have to be financially able to wait almost a year after harvest for your check.

 

Maybe things have improved since back then, but is seems to me if you start out with a Hefty brothers approved soil tested farm of about 80 acres of high ground, because you won`t afford building soil tests with organic amendment$ once certified organic. Have a small cow herd of your own to use all the hay and oats and a big livestock neighbor that has more manure than he needs.   All that and the love of doing paperwork.  Smiley Happy

Senior Advisor
Posts: 1,208
Registered: ‎05-20-2010

Re: If you can't beat them....join them

Excellent post Six Shooter...great points...congrats on your success (and weathering the failures like we all do)

Honored Advisor
Posts: 8,892
Registered: ‎07-18-2011

Re: If you can't beat them....join them

It is all in the accounting "slight of hand" ....... a process many farmers do without realizing it...... 

How many losses are you willing to endure to look like you made money.

 

Example is comparable to the kansas dryland rotation "shuffle".... a dance going on now for decades....

 

Options

1......... a fallow year,  a wheat year, a row crop year    ----- that is three years of expenses (weed control/ etc....) for one looser year, no yield one breakeven year, and one brag about my yield gains year.        O yield, then 45 bushel , then 80 bushel row crop  =  41.6 av.

 

2 ........... a fallow year, a crop year    ------ traditional wheat    less yield and ----   O yield they 45 bushel yield - 22.5 average yield

 

3............. continuous crop a 35 bushel yield every year  or 25 bushel out west    35 bushel yield steady every year.

 

 

None of which are "sustainable" at any current cost of production.  (always important to use proper terminology.... (ads some signifigance to your poverty.)

 

4........... The organic option..................a fallow year (no herbicides double costs), an induced weed year(cover crops/possible break even with risk),  second rotational crop year... mechanical weed control.... (hope break even),   Organic production year --- 160 bushel production......and a 5th year of marketing, storage and delivery  XXXXXX Oh and there needs to be a livestock enterprise cost just to provide fertilizer and of course "organic beef" and "almond milk"  might break even if you slaughter and deliver on time.

Banker is going to love that logic and if you don't need a banker your too smart to fall for this.

 

You get the "drift.".... (a pun intended in every possible way) ........ Is there a price that supports the process ??  Is it sustainable??

Is it affordable for you the producer and the consumer ( because if "organic" becomes volume that will sustain 10% of ag production potential (10% of our acres or farmers).........the buying power of consumers goes down.)  At higher volumes it just becomes a normal commodity under competition.

That is the problem ----"Organic" as we know it today has to have a rarity of production to justify a premium price.  

 

 

 

But the big question is ......Is the mindset involved in the "all natural" agriculture movement "sustainable" when there is ..IMO... a 30 to 40 year return on investment process for the producer.   ----- at best...... Otherwise it is just another feel good avenue out of business.  Even if it is delivered by drone.... home delivery and lack of choice will become too expensive and undesirable as the bills come due and the public learns to budget again.

Honored Advisor
Posts: 8,892
Registered: ‎07-18-2011

Re: If you can't beat them....join them

Time ------- is that enough production for your organic producers to justify less acres in production?

 

And Is it as I assume, Your producers are very close to a metropolitan organic market?  

 

Are the economics do able if most of his neighbors join in?