Price premiums necessary to incentivize switching from conventional (inorganic) to organic cocoa (Theobroma cacao) production in Ghana are identified. Optimal, phased-replacement models for orchard management are used to determine when switching from conventional to organic is profitable. The decision is a function of orchard growth stage, price premiums, and yield loss. Results indicate that the net present value (NPV) of organic production under current market conditions is 21% lower than the NPV of conventional production. Analysis shows that, generally, the minimum price premium to convert to organic is just slightly lower, in percentage terms, than the yield reduction caused by growing organically.
Mahrizal, L. Lanier Nalley, Bruce L. Dixon, and Jennie Popp
Heather Friedrich*, Curt R. Rom, Jennie Popp, Barbara Bellows, and Donn Johnson
Interest IN and conversion to sustainable agriculture practices, such as organic agriculture, integrated pest management or increasing biodiversity, has been increasing for a number of years among farmers and ranchers across the United States In order to meet the needs of producers, university researchers and educators must adapt their program areas to reflect this change toward sustainable agriculture practices. Although consumers, producers, and extension workers have been surveyed regarding their attitudes and interests in sustainable agricultural practices, few surveys have examined sustainable agriculture perceptions among university agriculture professionals. The object of this study was to survey 200 agriculture professionals, including research scientists, classroom educators of the Land-Grant agricultural college and the Cooperative Extension service of a southern state with a traditional agricultural economy in order to determine their perceptions and attitudes toward sustainable agriculture and to gather information on current research and education activities relevant to sustainable agriculture. Seventy-eight questions were asked concerning professional incentives, personal and professional importance of topics under the sustainable agriculture rubric, current research and educational activities, and demographics. By conducting this research we hope to identify factors that are an impedance or assistance to future research and education to support sustainable agriculture. The survey findings will provide a foundation for directing and developing agriculture research and education programs for row crops, fruit, vegetable and livestock production.
Hector German Rodriguez, Jennie Popp, Curt Rom, Heather Friedrich, and Jason McAfee
Numerous apple (Malus ×domestica) research experiments have shown that organic apples can be both profitable and sustainable, especially in the Pacific northwestern United States. However, there is limited published research on the profitability of organic apple orchards in the southern U.S. region. Surveys of southern U.S. stakeholders have indicated that great opportunities exist for markets of both fresh and processed fruit, but significant challenges still exist. These challenges include a lack of information available on the economic impacts of different organic production practices and the potential returns available from organic production. In response to these challenges, we developed a user-friendly interactive economic decision support tool using spreadsheet software to simulate organic apple production in Arkansas and across the southern United States. The purpose of this interactive economic decision support tool is 2-fold: 1) to assist producers in the evaluation of costs, returns, and risks associated with their organic apple orchard and 2) to assess changes to cost, return, and risk as expected costs, prices, and/or yields change. The production budget components of the interactive economic decision support tool estimate variable and fixed costs, gross revenues, and net returns for 18 years of production. In addition, this interactive economic decision support tool provides economic analyses regarding: 1) the operation’s breakeven (price and yield) points, 2) sensitivity analyses or “what if” scenarios related to changes in costs and returns, and 3) risk assessment by calculating the probability of obtaining a positive net present value (NPV) over the life of the organic apple orchard. This manuscript describes the development of this interactive economic decision support tool and provides an example of how it works.
Héctor Germán Rodríguez, Jennie Popp, Michael Thomsen, Heather Friedrich, and Curt R. Rom
Extending the production season of blackberry (Rubus subgenus Rubus) cultivars allows producers the opportunity to potentially receive better prices. Producers could benefit from out-of-season production by sustaining cash flow during more of the year and thereby expanding their market. The objective of this study was to compare the present value (PV) probabilities of being able to cover the total cost (TC) of production (break-even) for open-field and high tunnel production systems for the primocane-fruiting blackberry cultivar Prime-Jan® in northwestern Arkansas. (PVs) of gross revenues (GRs) of each production system were simulated 500 times. Total yields were higher in the open-field system in the first 2 years of production and consistently higher in weeks 33 to 34 and 36 to 37 than high tunnel production. It seems that there are no yield benefits from the high tunnel system early in the harvest season, except in the first year of primocane-fruiting production. The break-even probability was sensitive to the different percentage of yield sold, the percentage of the retail price received by the producer, and the production system analyzed. Even though the potential gross returns obtained with the high tunnel system are high (when compared with open-field production), the PV distributions of the gross returns do not offset the high tunnel TC in half of the simulations. Conversely, open-field production proves to be more profitable both in magnitude and in terms of the likelihood of exceeding the break-even threshold over the productive life of the enterprise.
Heather Friedrich, Curt Rom, Jennie Popp, Barbara Bellows, Donn Johnson, Dan Horton, Kirk Pomper, David Lockwood, Steve McArtney, and Geoffrey Zehnder
Southern organic fruit production is limited by a lack of regionally appropriate, scale-neutral, and market-focused research and technology. There has been limited research, outreach, and cooperation among universities on organic fruit crops in the southern region. Organic research and outreach activities, based on producer input, must be focused on the most limiting areas of the organic system in order to allow southern producers to receive the economic and environmental benefits that organic agriculture can provide. With funding from USDA-SARE and USDA-SRIPMC, researchers at the University of Arkansas have collaborated with scientists, extension specialists, growers, and representatives of the organic industry in Arkansas, Georgia, Kentucky, North Carolina, South Carolina, and Tennessee to create a Southern Region Organic Fruit Working Group (SROFWG). The SROFWG conducted in-state focus group meetings through which barriers to production and marketing, and opportunities for organic fruit in the region were identified. Prioritized research and outreach needs that were identified in the focus groups included use and understanding of organic fertilizers and nutrient management; methods, knowledge and awareness of pest disease and weed control including orchard floor management; information on transition to organic; consumer awareness and market development and the economics of organics. The planning activities of the SROFWG support the development and submission of grants for cooperative and collaborative research and outreach programs to sustain and expand organic fruit production in the southern region.