For several years, farmers who grew organic crops were able to generate higher returns than non-organic farmers.  However, with the current recession, those days may be coming to an end.

Organic farmers are required to meet tough standards to have their crops and food products branded as organic.  Generally, they are not able to use any commercial fertilizers or pesticides and in the cash of milk or animals, all of the feed that is used in the operation must be also organic.

For many years, the demand by discerning consumers for organic food created a premium pricing for these growers and farmers.  I know many farmers were able to get a two or three times premium for their organic products over comparable non-organic products.  Any time that you have this type of pricing differences, two things can happen that will negatively affect the price.  Either demand can decrease or supply can increase.

For most organic farmers in today’s environment, both things are happening.  The recession has decreased the demand for these products due to the large differences in prices.  The old consumer that might have been willing to buy a gallon of organic milk for $6 or more would rather buy non-organic for $3 or less now.

Also, many new farmers are coming on-line with organic products.  This is causing there to be a large increase in supply along with an offsetting decrease in demand will cause many organic food product pricing to diminish rapidly.  Also, many of the input costs for organic farmers are continuing to increase while their prices drop.

For example, organic dairy farmers have probably seen their price for their product drop by almost 50% over the last year or so, while the cost of buying a bushel of organic corn to feed their cows is still around $10, which over twice what a conventional dairy would pay for corn.

If you are thinking about changing over to organic farming in the near future, please make sure to determine how these factors will effect your operations.

The Super Bowl of Football is coming up in about two weeks. I have always thought that the game of football has many similarities to the business of farming.

During the off and pre-season, the team is acquiring talent based upon their needs and goals for the upcoming season. As farmers, during this off-season, we need to acquire our own talent. This talent could be a new CPA for estate and tax planning, a new attorney for business entity selection, a new insurance agent for asset protection and liquidity. It could be reviewing new types of seed or fertilizer options for the upcoming season.

After the pre-season is done, the early football season gets started. This involves playing games and seeing how the team is playing against the competition. If they are playing well, then small tweaks may be made. If they are playing bad, then major changes need to be made. With farming, after the crop is planted, you need to check how it emerges, how your application of nutrients is working. If pests or weeds are rampant, appropriate applications of herbicides and pesticides are made. If you are an organic farmer, then natural applications are made.

The season goes for about 17 weeks. There are ups and downs and if the team has prepared and executed well, they make the playoffs. If a farmer executes well during the growing season, it will make it to harvest.

In the playoffs, the regular season no longer means anything. You either win each week, or the team goes home. With farming, as you harvest, you have immediate feedback as to whether you had a winning season or not. If the crop exceeds your average for previous year or you exceed what your neighbors are doing, then you had a good regular season and a successful playoff (harvest). If not, you lost for that week or season.

Only one teams wins the Super Bowl and the other 31 teams go home “loser”. Even if you do not win your Super Bowl harvest, you are like all 32 football teams since there will be a new season for everyone to start over and win again.

May your favorite team win the Super Bowl and if not, remember they can win next year.