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”
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
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,
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.