Demand for Organic Grains on Rise
PLAINFIELD, Iowa — The U.S. Department of Agriculture makes no claims organically-grown food is safer or more nutritious than food conventionally raised, but plenty of people believe it. And, they're willing to pay a premium for it.
Demand for organic grain --- raised without synthetic fertilizer, herbicide and pesticide --- is at an all-time high among food processors and livestock farmers. That has resulted in record prices. Sales have increase 21 percent each year since 1997 and will hit $30.7 billion by 2007, according to the Organic Trade Association.
Grain brokers say organic soybeans are selling for $17 to $25 per bushel, depending on variety. Corn is in the $7 per bushel range. That is nearly four to five times more than conventional counterparts.
Organic specialty grains such as flax and amaranth are also in great demand.
Conventional farmers looking to cash in this year can forget it. It takes a minimum of three years before fields can be certified organic.
However, farmers and industry experts say it is worth the wait.
"It's definitely worth it," said Bruce Vosseller. He finished converting 550 acres to organic production south of Plainfield last year. "It's been a real good experience ... a challenge. There's less income for a couple of years, but I'm real glad I did it."
The school teacher turned businessman turned farmer plans on planting 225 acres of corn and 260 acres of soybeans this spring, along with rye and field peas.
A 36-month transition period is needed to purge the soil of chemicals.
Once crops are certified organic, however, the yield reductions that usually accompany the switch are more than offset by price premiums and reduced input costs.
Vosseller's corn fields once yielded 150-plus bushels per acre, but dropped to 100 bushels per acre after the switch. Weeds and insects usually controlled with chemicals now must be controlled by cultivating and more intensive crop rotations to break up disease and insect patterns. Fertilizer also must be organic, coming from animal manure or cover crops incorporated into the soil.
"It was tougher for me because I went from sitting behind a desk to farming. I hadn't been on a tractor for 20 years," said Vosseller. He recently retired and sold a salt spreader manufacturing plant in Milwaukee.
The family's century farm was previously custom farmed by a neighbor.
Vosseller wanted a new challenge. A love of the environment and the challenges and rewards that come with organic farming led him to convert the acres.
"It's going to be frightening with more weeds and a little less yield until you get the soil in balance. But gradually it improves," Vosseller said. "I know farmers who are getting 180- to 190-bushel (organic) corn."
This year Vosseller is shooting for 120 bushels of corn per acre. He presold 30 percent of his crop for $5.50 per bushel, expected to gross $660 per acre. At 150 bushels per acre, using last Tuesday's cash corn price at East Central Iowa Cooperative in Hudson, the same conventional corn would only gross $285 per acre.
He also forward contracted soybeans at $18 per bushel, compared to $6.25 offered at ECIC last week for cash soybeans. Yield reduction for organic soybeans aren't as significant as corn.
Bob Turnbull, an organic grain merchandiser with Stonebridge in Cedar Falls, said demand for organic grain far outpaces supply. Buyers are clamoring for product, and that is expected to continue.
"There's hardly a (organic) category that doesn't use grain. The increasing demand is not corresponding with the growth of acres," Turnbull said. "It's a sellers market."
Organic experts say making the transition isn't easy. To be successful, farmers need to be committed.
Kathleen Delate runs the organic agriculture program for Iowa State University Extension in Ames. She suggests farmers study organic production thoroughly, speak to an organic producer and then ease into it.
Farmers don't have to apply for certification until the third year, the first season a crop is eligible. And good records --- storage, seed, inputs, crop history, etc. --- are a must to prove crops are organic.
The financial hardship during the transition to organic can also be softened by selling nongenetically modified grains. Non-GM soybeans may bring a $1.50 per bushel premium --- far less than certified organic, but still more than conventional beans.
The inspection process isn't necessarily easy.
"(Inspectors) ask a lot of questions. They're very concerned about the name organic," she said. "Some people get unnerved about the first inspection. It's a necessary pain, but you reap the rewards."
In three years, she said, ISU's 45-acre organic farm has netted $27,000.
The Iowa Department of Agriculture and Land Stewardship and several other organic organizations are available to certify farmers. Officials encourage farmers to apply early in the production year since first-time and yearly inspections are scheduled in advance.
Inspections can take from a few hours to all day. IDALS charges $250 for the inspection, a $75 application fee and between 50 cents to $4 per acre, depending on the amount and type of crops to be certified.
Vegetables cost $25 per acre.
This year's deadline was last Tuesday, though late applications will be accepted until May 31 for an extra $50.
Farmers who falsify records can be fined $10,000.
Delate isn't sure why more farmers don't jump on the organic bandwagon.
She suspects they don't want to risk big yields or give up the ease of conventional farming.
Organic farmers spend 10 to 20 percent more time raising an acre of grain because of extra tillage and cultivation passes, record keeping and making sure equipment is cleaned to prevent contamination.
"It's a big mystery ... but Iowa farmers hate weeds," Delate said.
Source: Knight Ridder/Tribune Business News