Winter could transition to spring this year with major change on the farm horizon. Or change could start next year, but regardless of the timing, a major economic reshuffling of ag acreage is fermenting.
“A game changer” is how farm manager Rob Woodrow describes a new pricing strategy that could provide the needed impetus to push thousands of acres of farmland from chemical to organic practices.
Woodrow and his partner Kent Kraft, Farmland Solutions LLC, manage about 40,000 acres in Illinois, Wisconsin, Minnesota and Iowa. About 25,000 acres of that is in Scully land trusts, and the Scully beneficiaries all have interest in organics.
William Scully came to the United States from Ireland in the 1800s and bought large parcels of property between St. Louis and Chicago, ultimately owning one of the largest farm empires in the country. Because of carefully structured trusts, the land has been passed down through four generations of Scully descendants. Michael Scully, grandson of William, dabbled in organic farming but after his death in 2008, no Scully land has been in organic production.
That could change.
“Young Michael (son of Michael Scully) has a personal interest in organic and has pushed us to have the conversation,” said Woodrow.
“All Scully heirs seem to have interest in organics.”
A major stumbling block to converting from chemical to organic farming has been the economics of the transition period. Before the U.S. Department of Agriculture certifies crops as organic, use of agricultural chemicals must stop and organic practices must be followed for 36 months.
“The learning curve is straight up and involves cover crops and organic fertilizers. You can’t call the local farm retailer to spray and fertilize. You have to figure out crop mix and rotations. The economics have to work,” Woodrow said,
During the 36-month transition, crops produced on the land can’t be sold at the premium organic price but yields may be lower and costs may initially be higher.
So, for example, corn grown organically during this 36-month transition is sold at a conventional market price of about $4 a bushel rather than the premium organic price of about $12 a bushel.
Woodrow said if USDA approves a certified transition model devised by Clarkson Grain in Cerro Gordo, he will start the conversation with all his clients about converting to organic.
George Kalogridis at Clarkson Grain said that the Organic Trade Association is working with USDA on the transition label, and what he had hoped would be a six-week approval process has now stretched to nine months. However, in the meantime, his company has started working on a transition program that will allow farmers to get more income from crops in year one and two of the transition process. Once the program is approved on the national level, the Clarkson Grain program will fold into the national program.
Kalogridis said it’s possible consumers could start seeing a transitional organic label on products late this year but most likely the label will begin appearing in 2017.
Sam Jones-Ellard, spokesman for Agricultural Marketing Service at USDA, said the transition certification would clearly help farmers get a better market price.
“It takes additional effort to farm organically. There are fewer tools in the toolbox,” he said, noting that a better market price would reward farmers during the transition period. He was uncertain when USDA will issue its decision on the certified transition concept.
“If this is approved very soon, it will affect the 2016 growing season. We will be driving this on the farm management side,” Woodrow said. “This could be huge. It could be the mechanism for economically transitioning land from conventional to organic.”
The Clarkson model allows for labeling food produced in the transition years so farmers get a proportionally greater premium for crops produced during year one and two.
Woodrow began working with one of his clients, Laura Besley, several years ago to prepare her 500-acre farm to start transitioning to organic.
Besley grew up on the property helping her physician father bale hay and walk beans.
“My father was not a full-time farmer. He and my mother bought the land slowly over time,” Besley said. “My father apprenticed himself to area farmers just to learn. Dad loved the land and wanted to learn from it.”
Besley said when she and her family moved to Madison, WI, people would ask her what CSA she planned to join.
“CSAs were very popular here, but the concept was new to me,” she said. “We joined a CSA and began eating what came in the box. We began eating organic produce and organic milk, and I began reading more about organic.”
She and Woodrow discussed ways to balance the soil on her farmland and add different inputs and rotations.
Her father, Dr. John Harris, died in 1992 but the year before his death he received a conservation award for his farm management practices that included construction of a pond to capture runoff before it entered Lake Springfield.
Besley and Woodrow began the formal 36-month transition to organics and are now in the second year.
“For me, this is honoring my father’s memory,” Besley said. “I hope others in central Illinois see this and decide to make the conversion. If USDA approves a transitional label, that could help more people make the decision.”
Woodrow said retail demand is pushing more farmers toward organic.
“Half of organic grain sold in the United States today is imported, so we know we have a market,” he said. “The certified transition program helps with a price between (conventional) commodity and organic. If we get this soon, we could see some changes in the 2016 crop. For the 2017 crop, this would be a huge game changer.”
Another factor that could favor this shift to organics is a generational change in land ownership. As farmers approach retirement they are less willing to embrace a major change like converting from chemical farming to organic farming. As the younger generation takes over land ownership and either farms or works with a farm manager, they are more willing to embrace change. Young farmers can make a living on 400 to 500 acres in organic commodity production but more land is needed for a profitable operation that uses chemicals because of the input expenses.
“The economic model has to work. People may want to save the planet, but farmland has to make money,” Woodrow said.