Category : Economics

Profiled in Sustainable Business Oregon

Farmland LP is getting a decent amount of press lately.  The most recent was last week in Sustainable Business Oregon.

Here’s a bit from the article:

For Cody Wood, a sheep farmer near Harrisburg, the appeal is financial.

By leasing from Farmland, Wood is able to spend more on his flock.

“I’m leasing 125 acres; it’s got $40,000 or $50,000 worth of irrigation equipment on it. I wouldn’t have been able to swallow that cost,” Wood said. “And I can produce a lot of animals on this farm.”

What he pays for his time on the land will depend on what he gets paid for his sheep. Farmland LP shares the risk with farmers, betting that their land will produce higher yields.

“One way or another we have to get farmland available to younger farmers and this is one way to do it,” said Harry McCormick, a Corvallis farmer and co-founder of Oregon Tilth, who served as an adviser to Farmland. “I like that the fact that it’s money coming out of the banking sector.”

Cody and I are in the middle of setting up the irrigation equipment right now and it is indeed quite an investment.  But the payback is also very good as lambs will grow out quickly, to be ready for market in the fall and therefore not need over-winter care.

The article includes a few good pictures, including this one of a baby lamb and ewe taken on May 18th.  Healthy lambs on their mother’s milk may gain about a pound per day.  The newborns will often be walking within an hour of birth and be running around, quite agile and fast, in a couple of weeks.

Thanks to Christina Williams for writing this piece.  It is nice to get some coverage in the regional press.

 

Triple Pundit Interviews Farmland LP

The tag line for Triple Pundit, a sustainable business media outlet, is People, Planet, Profit, which makes them a natural kindred spirit with us at Farmland LP.  Triple Pundit correspondent Bill Roth met Craig Wichner at the recent Investors Circle conference in San Francisco, and today posted an article based their interview.

Embedded in the article is a short video clip of their discussion.  I highly recommend it for a quick overview of Farmland LP’s business strategy.

Inc. Magazine Features Farmland LP

Farmland LP is featured in the May issue of Inc. magazine as part of a special section on How a Business Can Change the World, which is billed as “A special report on the innovative business models social entrepreneurs are inventing.”  We at Farmland LP enjoyed the process of being interviewed by Inc. staff, we appreciate their interest in what we do, and we are pleased to be one of the companies featured in their report.  Here’s the opening paragraph of the main article:

It used to be that if you wanted to make a difference, you joined a nonprofit. And if you wanted to make money, you launched a business. These days, it’s not so simple. More nonprofits are being run like fast-growth start-ups. And more traditional companies are being built around social missions.

The details of how companies are being set up that blur traditional bounds is fascinating and I highly recommend the associated articles.

The specific piece about Farmland LP is titled “The Benefits of Going Organic – Farmland LP’s unusual approach to making money on real estate” and discusses our unique approach to farmland investing and how we advance sustainability.  We’re thrilled with the article and hope you enjoy it as well.

It is also nice to see one of my farmland pictures in print.  The image Inc. chose (shown below) was taken on Feb. 4, 2011.  We had just unloaded a group of sheep onto Fern Rd Farm and I snapped this shot with my iPhone as the animals settled down to feed, just a minute or so after exiting the trailer.  This pasture was sown on Sept. 15th, 2010.  We didn’t expect to be able to graze it so soon, but it was a very dense and tall sward by mid-January.  The flock of sheep pictured below was off the field after a couple of weeks, the pasture regrowth was fast, and we grazed it again in April.

 

Edible Seeds Making a Comeback

The Willamette Valley is famous for its grass seed production, and can even boast supplying the World Cup soccer fields in South Africa.  The dominance of grass seed began to wane with the collapse of the housing bubble a few years ago.  And while the major shift has been towards wheat, much more is going on.

I promised in a past blog post to review the regional resurgence of an edible and more diversified seed crop industry and will do so now.  Prompting comes from recent front page coverage in the Oregonian, namely an article by Eric Mortensen titled “Flax returns to the Willamette Valley in fertile land that once grew grass seed” which happened to profile the same farm I did in my January 2011 blog post titled Local Grains.  It is a good article and I encourage folks to read it.  I will also show that wheat and flax are parts of a diverse, tasty mix of culinary staples.  First, I’ll highlight a couple of quotes from the Mortensen piece:

This is a changing state that romanticizes its farms but doesn’t understand its farmers. Two-thirds of its farmers and ranchers are older than 55. Ownership of 9 million acres, more than half the state’s farmland, is projected to change hands in the next decade. The next generation has to do more than master the multiple skills farming requires: They’ll be hard-pressed to fend off development pressure while connecting with an urban population intensely, sometimes intrusively, interested in what they’re doing.

What a great summary paragraph of the complex social and demographic situation in agriculture.  This is why 30 something year olds like the article’s protagonist, my friend Clint Lindsey, get so much attention:  More of them are needed if we are all going to eat 20 years from now.   And these young farmers are entering the profession during one of the most tumultuous periods in the past few decades.  Again from the article:

Lindsey and his father decoupled the farm from the international commodities market. With their partners, they plan to install a small grain mill. From now on, they intend to sell grain, seed and flour to bakeries, restaurants and specialty stores within 150 miles.

It is less a revolution than a throwback. They are at the forefront of restoring an infrastructure that grows, processes, markets and consumes food locally.

So not only are these farmers trying to grow a diversity of edible seeds—from wheat to chick peas to flax, but they are working to re-localize processing and distribution.  There are several reasons why, but mostly you will hear it is about niche marketing opportunities catering to the locavore craze, growth in the organic food industry, capturing the margins of processing and distribution, and developing strong and stable relationships with buyers to avoid the ups and downs of commodity markets.

A crowd of local eaters gathers at the edge of a flax field at A2R Farms near Corvallis, OR.  Clint and Mike pose for cameras and answer many questions.

But I also know that there’s something else going on.  Nearly all farmers by now have connected the dots between the cost of energy and the cost of their inputs.  This means a rise in food commodity prices often doesn’t improve net farm income because modern farms have their inputs priced by commodity markets too.  I wrote earlier about the tight correlation between the price of oil and the price of food.  Oil prices are also a good proxy for farm input costs.  Therefore, some farmers have decided there’s a long-term advantage in cutting the distance between themselves and their customers, and by reducing the volatility of input costs by using organic, or quasi-organic, methods.

A few months ago Clint gave me a call while in my neighborhood.  He wanted to make sure I was home so he could stop by with something.  A loaf of bread… “his” bread.  We shared a few moments of excitement and praise before Clint had to go.  Then I started making sandwiches with it and haven’t gone back.

Some people have their livelihood riding on building a regional food system and that motivation seems to be getting it done, one slice at a time.  But beyond the economic and food security issues that come up, I must say that watching this happen, and really working to do my part, is also a lot of fun.

My first loaf of Oregon Grains, by Nature Bake, which uses wheat, oats and flax from A2R Farms.

Wheat, flax and what else?

Okay, there’s been plenty of talk about wheat and flax.  Let me showcase more of the contenders for our newly appreciated regional seed crops.  Almost none of these are sold by commercial seed dealers around here.  Farmers are buying seed stock from other parts of the country (or world) and seeing what can be locally adapted.  A few seeds are even sourced directly from the bulk bins of grocery stores!

Last summer a few of the local farms gave public tours and I have pictures and notes that I am drawing from.  Also, I have attended some meetings of the Southern Willamette Valley Bean and Grain Project and have these notes.  Dan Armstrong has written well about these discussions on his web site.

While the public tours were on the larger farms, with the area being managed ranging from 900 to 9000 acres, a few small farms are also involved in the development of grains and beans and alternative edible seed crops.  The most well-known small farm is Sunbow Farm, one of the founders of the Bean and Grain Project, and newcomers such as Adaptive Seeds are trying many species and varieties.  A number of the small farm varieties won’t work on the large farms because they can’t be mechanically harvested.  Much of the discussion revolves around harvesting issues, and the big farms need plants that can be field dried, cut and combined efficiently.  For the most part, I will restrict myself to what the larger farms are doing.

I will briefly discuss three categories of edible seed crops:  grains, legumes and “others.”

Grains are grass species (family Poaceae). These are usually cool season crops, known broadly as small grains, planted in fall or spring for mid-summer harvest.  Soft white wheat is the main grain in the valley, but farmers are now growing hard red wheat (which has higher protein levels and can be used in leavened breads) hulless oats and hulless barley for human consumption (as opposed to the more common feed oats and barley varieties).  There is excitement over a six row malting barley being developed by a breeder at Oregon State University.  Cereal rye and triticale get some mentions, but the market for them is less certain.  The most common summer grown grain in the area is corn, but it is all sweet corn for processing.  Small farms are trying other types of corn but none of the big farms are.  I was surprised to learn that a couple of farms are now growing teff for sale to a local food wholesaler.

A table display at Stalford Seed Farms near Shed, OR highlights their flour products.  This farm has been key in the development of locally adapted hard red wheat and beans, and in the formation of Willamette Seed and Grain LLC, which processes, markets and distributes for local farms transitioning out of conventional grass seed and into edibles.

Legumes (family Fabaceae) fix nitrogen and are part of a healthy crop rotation.  Historically this area has produced clover seed.  The edible newcomers are lentils, chick peas, pinto and black beans.  Lentils and chick peas are probably better for our cooler climate as they can be sown before the last frost and mature quickly to be harvested in dry summer conditions.  Pinto and black beans are warm season crops that have had some success, but during the past couple of years the harvest has gone poorly as we’ve had cool summers and the beans didn’t dry in the field well enough before fall.  Something to keep an eye on is chickling vetch, which is being tested by farmers.  Soybeans like it hot, so nobody is sure they will be a good fit around here, although small farms are growing edamame varieties.

Rows of pinto beans at Stalford Seed Farms.

Flax (family Linaceae) has uses for food, fiber and industrial oil.  The cool climate here is perfect for flax, which can be either fall or spring sown.  Buckwheat is a very quickly maturing plant (family Polygonaceae) that is used as a summer cover crop and for its edible seed, which is usually made into a flour.  Cool season oil seed crops (family Brassicaceae) in the area may eventually be used for human food, and farmers are interested in these as they add to the crop rotation potential.  Canola grows well but is semi-banned since it can cross with vegetable relatives grown commercially.  Another member of the same plant family, Camelina, is better accepted.  Locally it has primarily been promoted for biofuel production, but is used for food in Europe.  Sunflowers, which have varieties developed for either seed or pressed oil, are being tried but may be marginal because of potentially cool summers.

The tour included a stop and delicious meal at Tom Hunton’s place near Junction City (Tom also owns SureCrop).  Pictured here is a field of buckwheat in flower.  I was also impressed by the diversity of commercial scale field trials on this farm, such as teff, and varieties of chick peas and lentils. Later in the year Tom reported a yield of 1800 lbs/acre for variety Dillon chick peas on his Malabon soil.

Where does Farmland LP fit in?

If you read this blog it is obvious that we are mainly doing livestock production on the farmland we manage.  This is because growing seed crops organically during the transition period from conventional farming is very difficult, which the Oregonian article touches upon.  By contrast, livestock grazing prevents weeds from going to seed, builds soil fertility, and provides us with a steady income before we are certified organic.

What we will do once our land becomes certified organic and the soils are in great shape is offer sections to organic seed farmers.  We will be looking for those with experience and the ability to plan and implement a diverse crop rotation.  After a few years in annual seed crops the land will go back into pasture, and the seed farmer may be given new areas to sow.  This pattern is expected to reduce the management costs and risk to the farmer while increasing yields, which should increase profitability for all of us.

 

Methyl Iodide For Strawberries? Simply Not Needed

I gave the following speech at a press conference yesterday at the California State Legislature regarding the rushed approval of methyl iodide, a new toxic fumigant proposed for use to sterilize soil prior to planting strawberries.  As background, John Froines, PhD, and chair of the California Scientific Review Committee that evaluated methyl iodide, at a 2010 Senate hearing called it “one of the most toxic chemicals on earth.”  For more information see:

http://en.wikipedia.org/wiki/Methyl_iodide

http://www.panna.org/cancer-free-strawberries

http://www.epa.gov/ttnatw01/hlthef/methylio.html

http://www.cdpr.ca.gov/docs/risk/mei/peer_review_report.pdf

>>>>>

Thank you all for your interest in the methyl iodide issue.  My name is Craig Wichner, and I run Farmland LP, an investment fund that acquires conventional farmland and adds value by converting it to organic, sustainable farmland. I’m glad to be here to share the perspective of the investment community on methyl iodide.

California is the state of innovation and progress.  California’s auto emission standards improved the efficiency of our nation’s automobiles and eliminated lead from our gasoline.  California led the way in clean energy technology that is helping reduce CO2 emissions and reduce mercury pollution from Coal-fired power plants.  And California is the home of the medical science industry that uses biology to cure cancer, rather than toxic chemicals that doctors hope will kill the cancer cells before killing the patient.

Yet in the field of Agriculture, California seems to have forgotten its vast success in innovation and progress, and rather than supporting its leading position in organic and sustainable agriculture, it looked backwards to approve a pesticide more toxic than the one it replaces.  This is a gigantic step backwards for California. From the viewpoint of this investor, methyl iodide will not only sterilize and pollute the soil, but it will kill jobs, kill investment in agriculture, and kill another opportunity for California to lead the nation in healthy, sustainable and organic food production.

Why does organic food production matter to California’s economy?  Organic, sustainable agriculture is proven successful and is more profitable than chemical-reliant agriculture.  California’s farmers generated 36% of the nation’s revenues for organic crops; California produces over 60% of the nation’s organic fruits, nuts and vegetables; and California has 2.5x more certified organic cropland acres than any other state.

This leadership in organic agriculture is very important to California’s economy. For example, organic farmers are 2.5x more likely to make $100k per year than conventional farmers. Organic farmers are more profitable as well, as they are not dependent on expensive genetically modified seeds, non-organic fertilizers, nor on toxic and expensive pesticides (such as methyl iodide).  And best of all for California’s economy, organic, sustainable Agriculture employs twice as many people per acre while still being more profitable.  These are benefits California gets from organic agriculture, and these benefits are lost when pesticides are used.

Regarding methyl iodide, there is simply no need to mix this pesticide with strawberries. Per the California Strawberry Commission, California produced a record crop of strawberries in 2010 – without methyl iodide.  And certified organic strawberries, grown without fumigants, made up 4.5% of the crop acres, while generating an even higher percentage of the profits and revenues.  Organic and sustainable methods work, and work at commercial scale.

California’s investors are interested in supporting and accelerating the transition to organic and sustainable agriculture.  But the Government makes it much harder when it actively supports toxic pesticides that aren’t needed and that lock in antiquated and harmful production methods.  By approving these pesticides, the government subsidizes and enables harmful, unnecessary agricultural practices and stifles and suppresses innovation and investment in sustainable agriculture.  Thus, I call on California to innovate — Use MI as an experiment:  rescind the approval of MI, and watch as the amount of certified organic acreage increases significantly over the next few years, and watch as sustainable agriculture practices advance and spread.  This will benefit the farmers who transition to organic and sustainable methods, as well as California’s economy, California’s environment, and California’s workers and citizens.

Healthy, sustainable food systems are the future. Eliminating pesticides has no cost to California, and yet it creates jobs, keeps our citizens healthy, and boosts our economy.  CA should be the innovator and point the way forward to a sustainable future, rather than heading back to methyl iodide and other pesticides.

So I ask the administration to do two things, plus one bonus opportunity:

First, rescind the approval of methyl iodide, an act that requires no expenditure and yet will deliver substantial economic benefit.

Second, divest its holdings of $50 million in Arysta, the pesticide manufacturer.  There are other places to invest that will deliver similar returns without their product harming California.

And the bonus option is to invest those divested funds into opportunities which enhance organic, sustainable and local agriculture for California.

While this toxic compound was approved in the final gasp of the last administration, I would expect that any administration that looks to the future would reject the short term profits of a single pesticide company in favor of policies that create farm jobs, grow healthy food, and preserve and restore the environment for the great State of California.

Oil and Food Prices

Several years ago National Geographic magazine published an article on oil that included a stunning photo of mature steer and the barrels of oil needed to grow an animal to that size.  I recently went looking for that picture, found it, and post it here because it hasn’t lost its impact or relevance one bit.

Here’s the caption that accompanies that photo:

Weighing in at 1,250 pounds (567 kilograms), Marina Wilson’s champion steer Grandview Rebel is ready for auction at a county fair in Maryland. Raising this steer has taken an agricultural investment equal to 283 gallons (1,071 liters) of oil, represented here by the red drums. That includes everything from fertilizers on cornfields to the diesel that runs machinery on the farm. Overall, it takes three-quarters of a gallon of oil to produce a pound of beef.

Yowza!  Three quarters of a gallon of oil to produce a pound of beef.  At $4.00 per gallon, this implies the cost of a pound of beef includes $3.00 worth of oil.

In reality, the oil is used for illustrative purposes only.  The energy in the food systems comes from many sources, such as natural gas for fertilizer and drying grains, and the electric grid for almost everything. Broadly, however, industrial energy sources tend to have correlated prices and oil is considered the lynch pin since it is involved in the transportation of all goods, including energy inputs.

Given the heavy use of oil in the food system wouldn’t you expect oil and food prices to correlate?  Well they certainly do.

The above graph comes from the web site of Paul Chefurka and derives from easy to get, publicly available data from the UN Food and Agriculture Organization and the US Energy Information Agency.

The Broad Context

While the price correlation is stunning, the big picture is even more interesting.  Let’s look at this again from an energy perspective by comparing the energy content of one pound of meat with the 3/4 gallon of oil that goes into it.  3/4 gallons of oil is equivalent to 0.11 Giga Joules (GJ) of energy.  A pound of meat averages about 1000 kilo calories, which equals a measly 0.0042 GJ.

Twenty six (26) units of fossil fuel energy goes into producing one (1) unit of food energy in the form of beef.

Agriculture was created as the primary way civilizations harness the energy that allows them to do work. Now, however, agriculture is simply another fossil fuel conversion system.  While these fuels provide us with tremendous labor efficiency, we can no longer say we have an energy efficient way to make food since food production is now an energy sink.

Given the volatile and generally rising trends in energy costs, I believe we are in a transition between two periods.  For the past several decades, fossil fuels could be counted on as readily available and cheap, which is what built the system we have.  These non-renewable stocks have depleted to the point where we may no longer get the historic rates of flow we’ve depended on.  Look ahead a bit then, and an advantage goes to systems that build renewable stocks and capture and convert renewable flows of energy.

In simple terms, this defines the need for sustainable agriculture.  The renewable stocks we need to build include fertile topsoil.  And the flows come from what plants, animals, fungi and microbes do with soil, water and sunlight.

Well, that’s the big picture.  And if you want to learn the details of how this is done then this blog will be a worthwhile read.

Local Grains

I have been visiting A2R Farms outside of Corvallis Oregon all year.  They are a former conventional grass seed farm transitioning to organic seed crops, primarily for local distribution.  I watched as they planted the fields and as the crops grew—flax, chick peas, sunflowers and wheat.  And as harvest season approached I looked over at the combines and asked my friend Clinton Lindsey, “Which one am I driving?”

So I was delighted to get a call one morning in August.  Over the hum of a motor Clint told me, “Hey Jason, I’m harvesting the field north of our office today if you want to visit.”  Heck yeah!  And I could bring the whole family.  It was Saturday and we all would get a turn in the cab.

It is the middle of August and time to harvest wheat in the Willamette Valley of Oregon. Clint lets my 11 year old son steer a John Deere combine.

What it Does

The combine performs tasks that replace an enormous amount of labor in a reliable and timely fashion.  It cuts the stalks of seed crops, threshes the heads to dislodge the seeds, and then separates the seeds from the straw and chaff.  Without the combine (and a series of intermediate technologies), harvesting grains involves manually cutting stalks, bundling them, transporting the bundle to storage, threshing and winnowing.

The labor efficiency of the combine is extreme.  Over the course of a long and somewhat boring 12 hour day in his air conditioned cab (made a little better by listening to audio books on an iPod), Clint can harvest about 25 acres of wheat.  We visited while he was in a field with a hard red variety that yields about 2400 lbs per acre (soft white yields are 2-3 times higher).  In one day, Clint and his machine will collect 60,000 lbs of hard red wheat, or 1000 bushels.

Each pound of wheat contains about 1500 food calories (i.e., kilo calories), and a person needs about 2500 calories per day.  A year’s supply of calories for a person is in the neighborhood of 900,000, which in wheat units is 600 lbs.  In simple terms, during a day of work Clint can supply the annual food needs of 100 people.  Of course he and his dad Mike also spent days prepping and sowing the field, and there are hours planning, maintaining equipment, and marketing, etc., but in total the amount of time actually spent with machines on that 25 acres is probably only a week or so.  And since Clint and his family manage to farm several hundred acres it all works out to about 100 people fed by one guy like Clint, which is typical for the US food system.

Social Context

One of the main enablers of a demographic shift away from a rural-agrarian population to an urban-industrial one is the combine.  The combine removes most labor from agriculture for the most critical crops:  edible grains, legumes and oil seeds.  Seeds are a highly portable, storable and versatile class of food, allowing civilizations to trade and buffer against shortages.  Most calories now consumed derive directly or indirectly from seeds.

The percent agriculture population is plotted in relation to per capita energy use.  Nations with abundant use of exosomatic energy tend to have less of their population involved in agricultural production, presumably either because they can afford to import much of their food or employ labor saving devices in food production.  For example, only about 1% of the US labor force is involved in farming.  Data come from the Energy Information Administration (EIA) and the United Nations Food and Agricultural Organization (FAO).  Original article containing figure is here.

This is why I spend a lot of time studying not only pastured livestock, which we use almost exclusively on our land during the organic transition process, but the seed industry, which will feed us in the long run.  Go back several decades and the Willamette Valley fed itself and exported a diversity of grains, especially wheat.  In more recent times, most of the acreage has converted to grass seed for lawns.  Still, the equipment to sow, harvest, clean and transport seeds is similar, whether it is used for turf grass, edible grains, or forage and cover crop seeds.

Shift to the years 2007-2008 and the beginning of a new era.   Commodity prices are on the rise, promising great gross returns for farmers growing crops such as wheat, but taking away most profits by parallel gains in fertilizer and fuel costs.  Meanwhile, the housing market is suddenly crashing, and with it much of the demand for lawn seed.

The same equipment is used for many purposes.  In this image, Dallas Goracke loads a bag of pasture seed mix into his no-till drill at our Fern Rd Farm.  He and his brothers grow a diversity of seed crops and have their own grass seed distribution business.  Ten years ago they converted to no-till agriculture for all their acreage, saving about 23,000 gallons of diesel per year.

These two trends,  a rise in basic commodity prices and a decline in the turf grass industry, caused many farmers to look for something else to plant.  Almost all seed croppers shifted to wheat for some of their acreage.  A few have also responded by transitioning to organic, which carries two obvious advantages—avoiding the costs of synthetic fertilizers and pesticides, and organic price premiums.  Those going organic are also working on value added marketing and processing, such as selling locally, and selling wheat flour or rolled oats.

Grain and Bean Project

I have spent the past couple of years watching this happen and participating in some of the discussions.  Keeping track of this shifting landscape, and shaping it to some extent, is the Willamette Valley Bean and Grain Project.

The originators of the project were small scale organic farmers and citizens interested in food security.  They foresaw that the large conventional farmers around them would soon have some troubles and they began conversations and experiments to provide alternatives—hoping these would be adopted when needed.

One of the crops now being grown in the area after decades of absence is flax.  These seeds are just off the combine at A2R Farms.

What has emerged is a lose affiliation of farmers, food buyers, bakers and chefs, government representatives, non-profits and food activists.  I would encourage a visit to the project web site, and I’ll write more about what I have seen and learned in future posts.

Big Picture Agriculture Interviews Us

The past few rainy days I’ve had the opportunity to respond to an interview request by Kalpa, the blogger at Big Picture Agriculture.  She asked a lot of questions and really let me go in depth, which is much appreciated. Here’s a link to the interview:

http://bigpictureagriculture.blogspot.com/2010/11/socially-conscious-way-to-invest-in.html

The Question of Yield

Our investors have often asked whether organic farming methods result in a yield differential vs. crops produced by conventional farming methods. Would a large scale return to organic farming methods result in decreased yields and, ultimately, food shortages both domestic and abroad?

Fortunately, the research shows that organic farmland delivers both superior long term crop yields and superior economics.

Long Term Studies

Earlier this year, the Long Term Agroecological Research (LTAR) program in Greenfield, Iowa published the results of a 12 year long study comparing the performance between crops conforming to the USDA’s National Organic Program and conventional crops. Dr. Kathleen Delate, associate professor of Iowa State University, led the study in collaboration with the USDA-ARS Soil Tilth Lab and the ISU Experiment Station. The team divided farmland into 44 quarter-acre plots and studied performance parameters which included soil quality, fertility, nitrogen utilization, weed control, insect and disease pressure and control, and – of course – yields.

An overhead view of the Iowa State University plots

While the organic plots were initially less productive, by the third year they had caught up with the conventional plots in terms of yield. In the fourth year, the organic crops surpassed the conventional crops.

Over the 12 years, the average yields between the two farming methods have been neck in neck across different crops. However, the average production costs for the conventional crops were approximately $50 per acre higher than organic. Organic crop farming did not use petroleum-based herbicides, fungicides or insecticides. As a result, the organic crops returned, on average, double the revenue of the conventional crops over the course of the project.

The team’s conclusion was that the increased yields and reduced input costs of the organic farming methods translated into significant cost savings: the revenue from the organic plots could be more than twice that of conventional. These outcomes point to a significant difference in the amount of time it takes to break-even on investments in organic farms versus conventional ones. Similar results have come from studies by the Sustainable Agriculture Farming Systems project (SAFS) at UC Davis and the Farming Systems Trial at the Rodale Institute: organic, sustainable farming methods result in comparable yields, greater profitability, and increased soil fertility.

Studies conducted in the developing world show even more promise. In 2007, Catherine Badgley of the University of Michigan published research that concluded: “Organic farming can yield up to three times as much food on individual farms in developing countries, as low-intensive methods on the same land,‖ a finding she says “refute[s] the long-standing claim that organic farming methods cannot produce enough food to feed the global population.” The significant increase in yield exists because many developing world farmers still do not have access to expensive fertilizers and pesticides.

The Organic Conversion Process

Converting farmland to certified organic production requires a minimum three-year transition and certification process. Starting at the beginning of the certification process, only organic materials can be used on the farm, usually resulting in decreased yields during the transition period while the natural soil fertility is restored. Artificial fertilizers are like amphetamines – giving a short-term boost of productivity but eventually burning out the land. It takes specialized knowledge and hard work to rehabilitate soil to its previous natural health and vitality – and that’s where Farmland LP comes in. We restore the land’s health and achieve high yields through soil management, crop diversity and ecological synergy.

By converting land to organic, sustainable farming methods, Farmland LP lowers input costs, increases revenues, conserves nonrenewable resources including fuel and natural-gas-based fertilizer, reduces use of toxic materials such as pesticides and herbicides, and enhances the long term value of the land through improved soil quality and enhanced water retention.

Organic farming using sustainable-agriculture best practices is a robust business model, delivering superior economics over conventional farming on a wide variety of metrics such as crop yields, gross and net income per acre, cost of inputs, per farm income and more. Although it takes time to convert the land, once done, it delivers payback in perpetuity. And each acre converted to organic, sustainable methods is one acre closer to a societal tipping point for sustainability.

Energy in U.S. Food System

I wanted to highlight a recent post from Michael Bomford of Kentucky State University on his blog Energy Farms.  Michael notes that USDA data show that the U.S. Food System is INCREASING its use of energy per capita and per consumption of food.  In other words, if you have any concerns about issues such as greenhouse gas emissions, fossil fuel depletion, and the economic impact or security implications of importing most of our energy supplies, we are going backwards.

Here’s a telling graphic:

What this shows is that no single sector is to blame.  Basically the entire food system is still becoming more energy intensive, with the possible exception of retail and wholesale.

And graphics aren’t yet available for the 2002-2007 period, but apparently no improvement occurred.  According to Bomford:

The period between 2002 to 2007 likely saw another jump in food system energy use that far exceeded the increase observed in the rest of the US economy.

It is not a long article, and I encourage you to read the entire piece for further information.

On this blog, I’ll continue to explain how Farmland LP invests in the right direction, by developing lower energy input, yet highly productive, agroecological farms.