The Profit Potential of Certified Organic Field Crop Production

Abstract

Organic crop acres in the United States more than doubled between 2002 and 2011 as acreage increased from 1.3 to over 3 million acres. While acreage for some major field crops increased substantially during this period, growth was more modest or had stalled for others. This study examines the profitability of corn, wheat, and soybean production using national survey data and finds that significant economic returns are possible from organic production of these crops. The main reason for higher per-bushel returns to organic production is the price premiums paid for organic crops. Despite potentially higher returns, the adoption of organic field crop production has been slow and is challenging due to such factors as achieving effective weed control and the processes involved with organic certification.

Keywords: corn, wheat, soybeans, organic and conventional production, average treatment-effect, propensity-score matching, regression with endogenous treatment-effects, Agricultural Resource Management Survey (ARMS)

JEL Classification: Q10