Strategies to increase crop value

In addition to reducing production costs, farm profitability may be improved by increasing prices received for crop and livestock products. Organic farming is one option for adding value to farm products that has become increasingly popular in recent years. During the mid to late 1990s, retail sales of organic products in the USA and Europe rose 20% to 30% annually (Tate, 1994; Burros, 1997; Welsh, 1999). In 1997, the American and European markets for organic products were each estimated to be between $4 and $5 billion, while sales in Japan were estimated to be $2 billion (Welsh, 1999). Geier (1998) predicted the worldwide market for organic foods will reach $100 billion by 2010.

Price premiums paid to American farmers for organic products can be substantial: more than 100% above conventional prices for broccoli in California (Franco, 1989); 33% to 38% higher for apples in California (Swezey et al., 1994); and 45% to 119% higher for maize, 95% to 223% higher for soybean, 28% to 94% higher for oat, and 46% to 74% higher for wheat in South Dakota (Dobbs & Pourier, 1999). Substantial price premiums are also paid in many European countries for organic products (Padel & Lampkin, 1994) and are a major factor driving organic production of certain tropical products, such as coffee.

In a review of data collected by land-grant universities comparing conventional and organic grain and forage production in the midwestern USA (including the South Dakota studies cited previously), Welsh (1999) concluded that organic systems that receive price premiums at existing market levels can consistently match or exceed the profitability of most common conventional systems. Welsh (1999) also found that "break-even" premium levels required for organic systems to match the profitability of conventional systems were lower than the average premiums available during the 1990s. In contrast, Klonsky & Livingston (1994) compared the economic performance of different tomato-based cropping systems in California and found that net returns from a conventionally managed two-year rotation were greater than returns from an organically managed four-year system, even when available organic premiums were included in the analysis.

These and other studies indicate that organic production is a viable means of increasing farm profitability for some, but not all, farmers. Owing to a longstanding paucity of weed research relevant to organic farming systems, strategies to improve weed management are among the top research priorities of organic farmers (Organic Farming Research Foundation, 1998). Ecological approaches for weed management need to be fully developed to achieve the agronomic and economic potentials of organic farming systems.

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