Economic Performance of Long-Term Organic and Conventional Cropping Systems in Minnesota

Long-term crop rotation studies enable economic analyses that include a more complete representation of possible profit outcomes than do experiments of shorter duration. The objective of this study was to compare the profitability and risk of organic input (OI) and chemical input (CI) 4-yr corn (Zea mays L.)-soybean [Glycine max (L.) Merr.]-oat (Avena sativa L.)/alfalfa (Medicago sativa L.)-alfalfa crop rotations with a CI 2-yr corn-soybean rotation using yield and management data from an 18-yr experiment in southwestern Minnesota. Estimated production costs were matched with trial yields and commodity prices to calculate a distribution of net returns for each crop rotation. Cumulative distribution functions (CDFs) were constructed and compared using stochastic dominance. Average production costs for the CI 2-yr rotation were higher than those for the CI and OI 4-yr rotations ($488 ha(-1), $405 ha(-1), and $409 ha(-1), respectively) though the OI rotation had higher machinery costs. The average net return for the CI 2-yr rotation was the highest of the three rotations analyzed when no organic price premiums were considered. However, when organic price premiums were applied, the average net return of the OI rotation was considerably larger than that of the CI 4-yr and 2-yr rotations ($1329 ha-1, $675 ha(-1), and $846 ha(-1), respectively), and the OI rotation was stochastically dominant to both CI rotations at all levels of risk aversion.