Is There Profit Potential With Organic Producers?
Jimmy Wedel should be every full-service ag retailer's dream prospect. At 4,000 acres, he's big. He's diversified, growing everything from dry beans, soybeans, alfalfa and cotton to corn, wheat and peanuts. He's good at what he does, with soybean yield averages as high as 82 bushels and corn making 220 bushels with sufficient water.
The Texas panhandle farmer is also active on various influential committees and boards, including the Texas Corn Producers Board and the board of directors for the Corn Producers Association of Texas and formerly served on the Research and Business Development Action Team for the National Corn Growers Association.
A helicopter sprays sulfur on an organic crop in the Salinas Valley of California. Instead of prospect, the organic farming Wedel is every ag retailer's nightmare. "I started switching to organic more than 20 years ago," he said. "We're now about 95 percent organic. Beyond the seed I buy, feedlot manure and compost is about the only off-farm input."
Wedel relies on his soil's fertility and the arid conditions in which he farms for his crop protection. He also is resigned to the fact that when pests do hit, there is little he can do about it. It's a risk he is willing to take and one that has had an impact on other producers.
"When I started to go organic, I was using state Extension entomologists to set up an IPM program on my conventional acres," recalled Wedel. "They would scout my organic acres just to see what was happening in absence of pesticides being sprayed. They realized the cotton could withstand higher thresholds than they expected without significant damage. That caused them to hold off spraying longer on conventional acres."
When Wedel's longtime friends and neighboring farmers and ranchers (his is a third-generation farm) give him grief about being organic, he has a simple response. "Why don't you grow for a market that wants to buy your stuff?" he asked.
ORGANIC ACRES BOOM
In the 20 years since Wedel began his conversion, the organic market has gone from $1 billion in 1990 to $26.2 billion in 2010, approximately 4 percent of all food and beverage sales. The on-going recession had little impact, with sales up 7.7 percent from 2009 to 2010 and more than half being sold through conventional retailers, such as the reputedly largest organic marketer, Walmart.
Acres have increased, too. Certified organic cropland increased on average 15 percent per year from 2002 to 2008. Total organic crop acres in 2008 reached 2.6 million acres with another 2.1 million in organic certified pasture. Although California claimed nearly a sixth of all crop land, other large organic farming states included Wisconsin, North Dakota, Minnesota and Montana.