Whole Farm Modeling - Organic vs. Conventional
The rotation modeling spreadsheet assists producers in comparing, at the field level, certain relevant economic differences between rotations and farming methods of conventional and certified organic production. However, the rotation modeling spreadsheet does not account for economic information such as fixed costs, nor does it reflect the overall economic picture of a farm.
The department developed a second spreadsheet to model the economics for an entire farm and provide an example of how information from the rotation modeling spreadsheet can be used to plan and evaluate transitioning an entire farm. This "whole-farm" spreadsheet is not intended as a template and is only provided as an example. The whole-farm spreadsheet does not have some of the error-protection and user-friendly features that are built into the rotation modeling worksheet.
The whole-farm model compares the economics of a dryland farm transitioning to organic production to the economics of continued conventional production over a twenty-year period.
Model Farm Description
Initially: 2,540 acres under conventional management
- 640 acres CRP
- 720 acres in a three-year rotation (winter wheat – peas – fallow)
- 1,180 acres are in a two-year rotation (winter wheat – fallow)
Complete transition accomplished over a 10-year period:
- 2,540 acres certified organic production
- Four-year rotation (winter wheat – pea plowdown – spring wheat – summerfallow)
- Timing of when individual fields start the transition process is based on an attempt to balance income and maintain adequate cash flow
Net income is for an incorporated farm
- Farm corporation owns equipment and rents land
- Compensation is provided to the farm operators in the form of wages, medical benefits, and meals
- Annual variation of income is affected by the rotations (crop selection) and the fact that field sizes are deliberately varied so that the farm is not "symmetrical" (to reflect the situation of many farms)
- Information from the Rotation Modeling Spreadsheet is entered for each of fourteen fields (Revenue per acre and return after direct costs per acre)
The spreadsheet contains several worksheets, which show up as tabs at the bottom of the spreadsheet. The first worksheet, titled "Comparison Summary," provides a consolidated comparison. Different sets of worksheets are used for the scenario in which the farm transitions to organic production and the scenarios in which the farm continues conventional management.
As in the rotation models, two examples are provided below to model different economic conditions: the first using mid-2007 commodity prices and input costs from 2007-2008; and the second using 2006 crop prices and costs.
Contacts
Chad Lee
Montana Department of Agriculture
302 N Roberts
Helena, MT 59601
Phone: (406) 444-2402
E-mail: chlee@mt.gov
Fax: (406) 444-9442
Published: Mon Nov 21 15:14:00 MST 2011.
Last Modified: Tue Nov 22 10:39:14 MST 2011