Posted January 29, 2004: Even the gray gloom
of a rainy November day couldn’t stifle the energy bubbling
forth from Iowa State University’s Scheman Building,
where some 350 farmers, scientists and consumers convened
to discuss one of agriculture's fastest growing sectors at
the third annual Iowa Organic Conference.
Iowa now boasts over 100,000 of the country’s 2.5 million
organic acres. Ranked second in the nation for organic soybeans,
fourth for organic grains and eighth in organic livestock,
Iowa is becoming a major player in field of organics.
In his opening remarks to conference attendees, Brent Halling,
Iowa’s Deputy Secretary of Agriculture, praised Iowa’s
organic growers and researchers. “I am gratified and
satisfied with the progress organic agriculture has made in
Iowa and nationally,” he said. With annual growth expected
to continue at 20 percent, Halling argued that organic production
is not just a trend, but here to stay. “There are exciting
opportunities for organic agriculture in Iowa.”
Conference speakers encouraged participants to get involved
in the larger organic movement, beyond the farm. Now a $10
billion industry, organic agriculture has captured the attention
of multinational companies—making attentiveness on the
part of producers more important than ever. As one speaker
stated, “We have to be activists, not just farmers.”
What follows are a few of the day’s highlights on the
profits, policies, and production of organic agriculture in
the Upper Midwest.
Organic Valley’s success
The day began with Theresa Marquez, director of marketing
for Organic Valley Cooperative, offering insights from one
of the country’s oldest and most accomplished organic
dairy pools.
Organic Valley is the brand for the Cooperative Regions of
Organic Producer Pools (otherwise known as CROPP) based in
Lafarge, Wisconsin. The 650-member farmers' cooperative is
now the largest farmer-owned organic dairy in the country,
possibly in the world. Since it began in 1988, Organic Valley
continues to surpass the industry’s annual growth average
of 20 percent. This year’s projected revenue is $156
million, up 22 percent from record sales and profits in 2002.
Organic Valley pays the highest prices for dairy in the country,
almost twice the price of conventional milk (OV pays $17.95
cwt compared to $10.97 cwt for conventional). While national
statistics estimate that 28 farmers go out of business each
day, Organic Valley plans to add 121 new farmer members to
their dairy pool next year.
What’s the secret to Organic Valley’s success?
Marquez said it's “all about having a fabulous product
and trying to predict trends.” And, she added, making
sure the cooperative continues to align its values with its
customers'.
To maintain product quality and integrity, Organic Valley
sells product exclusively from its farmer-members. Those same
members determine the pay prices for milk and control the
market’s supply. Other elements of Organic Valley’s
success include a diversified product line, a low debt load,
and innovative marketing strategies such as regional branding
and celebrity endorsements.
Organic Valley does face challenges, however. Marquez finished
her talk by sharing some of the factors that threaten Organic
Valley’s future as a family farmer cooperative. The
three biggies include industry consolidation, frequent buy-out
offers, and repeated attempts to prohibit or discredit meaningful
labels like “organic” (such as the Hudson Institute’s
“Milk is Milk” campaign).
In her final remarks, Marquez urged farmers to stay current
with industry news and respond to efforts to slander organics.
“We all need to step up right now and write letters
to the editor" or otherwise contribute to the public
debate, she emphasized. "Consumers need the real facts
on organic agriculture."
Program opportunities for organic farmers
Later in the day, Larry Beeler of the Iowa Natural Resource
Conservation Service joined Traci Bruckner of the Center for
Rural Affairs and Amy Natvig of northeastern Iowa to discuss
state and federal program opportunities for organic farmers.
Beeler explained changes to the Environmental Quality Incentives
Program (EQIP) under the 2002 Farm Bill. EQIP is a federal
program offering financial and technical assistance to implement
structural and management practices on eligible agricultural
land.
According to Beeler, each state now determines the main problem
areas to be addressed using EQIP dollars. In Iowa, a state
technical committee provides input on environmental concerns
associated with Iowa agriculture. Most EQIP funds are dispersed
to the county level based on the recommendations of the state
technical committee.
Although EQIP funding at the state level is no longer available
to transition to organic crop production, funding may still
be available at the county level. Beeler recommended that
producers interested in converting to organic should contact
their local NRCS offices and encourage local counties to include
incentives for organic production. In addition, he mentioned
that the USDA Agricultural Marketing Service now provides
financial assistance via the Iowa Department of Agriculture
to have crops certified as organic.
Traci Bruckner talked about the Conservation Security Program
(CSP), a new farm program passed under the 2002 Farm Bill.
Considered by many to be a landmark program, CSP will provide
incentive payments to enhance conservation practices on working
lands. Unlike other farm programs that help bring farmers
into conservation compliance, CSP rewards farmers who already
employ good conservation practices and want to do even more.
Although organic growers would not automatically qualify
for CSP, Bruckner told participants they could have an advantage
over conventional growers due to the conservation practices
required for organic certification. “You will have a
huge leg up to qualify because you [organic farmers] have
extended crop rotations.”
For Amy Natvig, CSP can’t come soon enough. Natvig
and her husband Mike raise organic crops and livestock on
420 acres in northeast Iowa. She gave a slide show of the
conservation practices used on their farm. In addition to
following an eight-year rotation, they’ve restored prairie,
put in buffer strips, and installed terraces and windbreaks.
The Natvigs receive no support from the government to implement
these costly practices. They do it because of their commitment
to ecologically sound farming.
Still, Natvig expressed frustration that her neighbors continue
to get government support simply to raise corn and soybeans.
She is hopeful, she said, that CSP will “help level
the playing field as far as federal dollars go and finally
get some of the money to the little guys.”
Bruckner and Natvig also encouraged the audience to pay attention
and get involved in the rule-making process for programs like
CSP. Although passed as an entitlement program under the 2002
Farm Bill, CSP has already faced numerous attempts to cap
or eliminate it. Thanks to the vigilant efforts of farm groups
and farmers, CSP is now back on track to full entitlement
status. Although delays in the proposed rule continue to slow
the program’s implementation, CSP supporters hope the
program will be up and running in 2004.
Is organic farming more profitable
than conventional farming?
Yes--according to both Holly Born of the National Center
for Appropriate Technology (NCAT) and Craig Chase, an Iowa
State University (ISU) farm management specialist. In an afternoon
session, Born and Chase shared their analyses of studies comparing
the profitability of organic versus conventional systems.
Born presented economic data from organic research conducted
at the national level. She found that although price premiums
for organic grains and soybeans have fallen somewhat since
the 1990s, organic agriculture continues to be profitable,
thanks to lower input costs and strong yields.
Contrary to the notion that switching to organic agriculture
entails a dramatic drop in yields, Born found that average
productivity per acre in organic systems is 90 to 93 percent
that of conventional agriculture. And in fact, under drought
conditions or in drier areas, organic systems actually perform
better.
Chase shared similar results from data collected over four
years at ISU’s Neely-Kinyon Research Farm. He compared
the economics of Iowa’s conventional rotation (corn,
soybean) to two certified organic rotations (corn, soybean,
oat/alfalfa and corn, soybean, oat/alfalfa, alfalfa).
Chase found that although the organic rotations had considerably
lower input costs than the conventional, the yields for the
systems were comparable. Moreover, returns on land, management
and labor were significantly higher in the organic rotations
than in the conventional rotation—especially when organic
growers had access to on-farm compost. Based on his research,
Chase argued that price premiums for organic are not as critical
for economic viability as commonly thought. Including high-value
crops such as soybeans, however, is important for higher average
rotational returns. 
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