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Budgeting tool developed to encourage more organic grain production

Crop budget worksheets help determine economic impact of agronomic choices

Maggie McNeil
(202) 403-8514
(202) 615-7997
Washington , DC
October 24, 2017
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Successful farming requires careful planning and the right tools. A new crop budgeting tool developed by the U.S. Organic Grain Collaboration enables organic farmers – and those producers interested in transitioning to organic – to zero in on their specific operations and provides a new resource to help improve their current organic operation or to make the choice to go organic.

The U.S. Organic Grain Collaboration, a special project of the Organic Trade Association’s Grain, Pulse and Oilseed Council, has developed crop budgeting templates to help farmers in North Dakota, South Dakota, and Montana plan future organic crop production and understand the economic impacts of their agronomic practices.

Coordinated by contract partner Sustainable Food Lab, the project has helped design templates presenting conventional, transition-to-organic and organic scenarios side by side to aid conventional producers in evaluating the financial merit of switching to organic. The primary differences between these scenarios are field operations, like the cost of weed control, higher costs for applied inputs and organic and transitional crop prices.

“Having a detailed budget can help avoid costly mistakes for established and transitioning organic producers,  while also providing a tangible resource to use for other goals such as securing financing,” said Nate Lewis, Farm Policy Director for the Organic Trade Association. “Budgets come in many forms, yet the most common is a spreadsheet that helps estimate costs and revenue, plan cash flow, and allocate resources such as labor or capital. These new crop budgeting templates are in spreadsheet form and are a great new tool that famers have sorely needed.”

The U.S. Organic Grain Collaboration funded the development of the two cash-flow budget calculator tools in partnership with Montana State University and an independent agronomist. The lack of such calculators had been identified as a barrier for farmers looking to transition to organic, as they had no way to readily estimate yields, costs, and prices for their production as they went through their transition phase and entered into the organic market. These two separate tools accommodate the different climates and production conditions from the Dakotas to Montana.

“The success of organic food companies is predicated on the success of organic farmers. Funding the development of tools that improve a farmer’s chance of succeeding is a responsibility that we all share,” said Matt Dillon, chairman of Organic Trade Association’s Grain, Pulse and Oilseed Council and head of Agricultural Policy and Programs at Clif Bar & Company.

Although developed specifically for organic farmers in North and South Dakota and in Montana, the calculating tools provide the flexibility to choose from a suite of typical organic transition and organic cropping rotations, allowing fine-tuning of field operations and enabling the user to adjust expected future crop prices.

“Accurate enterprise budgets help farmers make informed decisions when looking to transition acres to organic production or improve upon their existing operation. These informed decisions can help farmers position themselves for success early in the process of organic transition,” explained Eric DeBlieck, Crop Specialist with Grain Millers Inc. based in Minnesota.

The calculator tools are available for download on the Organic Trade Association’s website and on partner university websites. Instructions for using the budget templates and tailoring them to a farm operation are included in the explanation sheet as well as within the workbook itself. Details to enter on the templates include input options and costs, crop insurance, equipment costs, land costs, as well as yield and price, and cash flow tabs.

The Organic Trade Association’s Grain, Pulse and Oilseed Council formed near the end of 2015 at the request of trade association members involved in an ongoing collaborative effort to identify barriers to the growth of organic grain supplies, and to develop recommendations and actions that companies, farmers, and advocacy groups can take to overcome those barriers.

The council provides the foundation of the U.S. Organic Grain Collaboration effort, which created a three-year plan focusing its activities in two pilot regions--Aroostook County, Maine, and the Northern Great Plains. Activities include commissioning analyses of the grain supply chains in each of these regions to give companies an accurate picture of the landscape in each area. The group hosts opportunity days in each region bringing together farmers and other industry stakeholders to identify and solve problems limiting the growth of organic grain acreage and supports regional field days and workshops for farmers to improve on-farm productivity and post-harvest handling. The group hopes to highlight its work at regional conferences throughout the year.

The Organic Trade Association (OTA) is the membership-based business association for organic agriculture and products in North America. OTA is the leading voice for the organic trade in the United States, representing over 9,500 organic businesses across all 50 states. Its members include growers, shippers, processors, certifiers, farmers’ associations, distributors, importers, exporters, consultants, retailers and others. OTA’s Board of Directors is democratically elected by its members. OTA’s mission is to promote and protect ORGANIC with a unifying voice that serves and engages its diverse members from farm to marketplace.