Transition to Organic Sustains Farm’s Future

The first stumbling block in transitioning to organic farming is your own perception, says Michigan farmer Joel Layman. “I had to buy the organic concept mentally.” ( Chad Tidey )

As a student of the 1980s, Joel Layman never thought he’d have the opportunity to farm. His parents encouraged him to attend Michigan State University where he earned a degree in agriscience. During his nearly 20 years working in ag retail he couldn’t shake his desire to farm.

The problem? The '80s were hard on his family’s farm — so he had to rebuild the operation.

In 2007, Layman started farming part time near Berrien Center, Mich. “I lived frugally and really only bought essentials so the rest could go to the farm,” Layman says. “It was hard, but my gut said this is where I want to be in the future.”

In 2013, he transitioned to the farm full time. Shortly after, he took an even bigger risk by dabbling in organic production.

To date, 1,700 of Layman’s acres are certified organic, 200 are in transition and 350 are being rented out and farmed conventionally. He has raised snow peas, green beans, fall squash, corn, soybeans, black beans and pinto beans.

Profit Potential

It all started after working with his neighbor, who in 2013 had recently started farming under organic standards. After seeing its potential, Layman rented 25 acres and went through the process to certify them as organic.

That same year, Chipotle released “The Scarecrow” video. After the video went viral, Layman decided to see what all the fuss was about. A visit to the restaurant changed the trajectory of his farm.

“I was the oldest person in Chipotle by at least 10 years,” he recalls. “I then went to a McDonald’s to buy a Coke, and I was the youngest person there by at least 10 years. That’s when it hit me: that’s the future.”

He saw consumer interest in local, organic and natural, and he wanted a piece of the demand. He started the process by transitioning 1,000 of his acres.

“We went wide-scale on transition,” Layman explains. “I rented 500 of my acres to a neighboring farm. It was a risk mitigation strategy, and it helped convince our lenders to give us a shot.”

Understand the risks

The profit margins for organic production are attractive. According to USDA, organic corn prices ranged from $7.25 to $9 per bushel in 2019, and soybeans ranged from $18.90 to $19.

With prices more than double their conventionally grown counterparts, why aren’t more farmers jumping into organic production?

Layman encourages farmers to think about these three hurdles:

  • Crop insurance. Producers must use county averages rather than historic APH for the three-year transition period. Once the field is certified organic, it takes another four years to build an organic APH for crop insurance guarantees.
  • Financial risks. Because guarantees are low during the transition and first few years, poor weather or other catastrophes could wreak havoc on balance sheets.
  • Lender confidence. Low guarantees and lack of understanding make getting a lender to buy into organic farming challenging.

“A producer making the transition needs a strong balance sheet to weather lower returns during transition,” says Stephen Nicholson, Rabo AgriFinance senior analyst for grains and oilseeds.

When Layman first started farming, he would have said there was no way he’d ever grow organic crops. Today, as he gazes at his microbe-rich soils, he wonders why he didn’t start sooner.

By The Numbers: The Organic Farming Industry

“The organic grain market is still a niche market,” says Stephen Nichols, Rabo AgriFinance senior analyst for grains and oilseeds. “Currently, organic corn and soybean production only represents 0.2% and 0.1% of total U.S. production, respectively.”

Organic Farming by the Numbers
Graphic: Lindsey Benne