Originally published June 4, 2015 on Modern Farmer
A new study indicates that even with the added costs involved, organic farming nets a significantly higher profit for farmers than conventional farming. Of course, that raises the question: why isn’t everyone going organic?
Organic food has a substantial markup over conventional food, and always has, but that comes with a higher price for certification and production. A new study from researchers at Washington State University indicates that all the extra money and effort works out, and that organic farming is, at the moment, more profitable than conventional farming.
The study, published in the Proceedings of the National Academy of Sciences (commonly shortened to PNAS), is the first wide-ranging study to look at the profitability of organic farming in the real world. That’s more complex than it sounds; a major tenet of organic farming is to care for the soil and the nutrients in it, which means organic farmers typically rotate crops so as to not drain the soil of any particular nutrient. That leads to totally different yields and, in turn, profits, depending on what’s being grown each year. This study includes that data, and still finds that organic farming is worth the trouble, mostly.
Organic produce commands a price premium that has remained fairly stable over the 40 or so years that they have been on the market (though they’ve only been officially approved by the National Organic Program since 2000). In fact, the premium has varied only by a few percentage points, hovering generally around 30 percent higher than conventional produce. The yield of organic produce, though lower than conventional by about 18 percent, still has plenty of room for prices to drop before the math no longer works.