Michigan Farmer

5. Costs of Producing Organic Beef

New study outlines the cost of a 50-head cow-calf operation.

(4/4/2006)

Compiled by staff

In the first study of its kind in California, the University of California   has examined an organic beef cattle operation in depth, identifying   management practices, revenues, costs and marketing.

  The study outlines the cost of a 50 head cow-calf operation that produces 40   cattle for processing, describing the assumed practices used to raise the   herd and returns having the rancher selling the finished product direct to   consumers.

  The cost study details when most major operations occur as well as when the   cattle are sold. Pasture and winter-feeding, normal veterinary care, fencing,   processing, and life cycles are represented in text, table and chart formats   to show how an organic cow-calf operation works. Actual costs and returns are   highlighted in tables in the text and at the end of the study. Laws,   ordinances, and Internet sites relating to an organic production and   certification, organic labeling claims, and marketing are discussed and   locations for finding them are given.

  A separate marketing section explores possible avenues for ranchers to sell   organic beef products. Considerations about potential marketing decisions are   discussed and Internet references for other more in-depth marketing scenarios   are given.

  The study is intended as a guide only and can be used to make production   decisions, determine potential returns, prepare budgets and evaluate   production loans. The study is based upon a hypothetical ranch using   practices in the region. UC farm advisors, researchers, ranchers, equipment   and medical suppliers, and other agricultural associates provided input and   reviews.

  Assumptions used to identify current costs for the cow-calf operation,   establishing the grass-fed beef herd, material inputs, and ownership costs   are described in the study. Tables show herd costs, monthly cash costs,   profits/losses over a range of prices and yields, and annual investment   costs.

  The study -- Sample Costs for an Organic   Cow-Calf Operation, 50 Head in the North Coast Region of Mendocino & Lake   Counties is available online at coststudies.ucdavis.edu,   from the Department of Agricultural and Resource Economics, University of   California, One Shields Avenue, Davis, CA 95616, and from local UC   Cooperative Extension offices.

  The study was prepared by John M. Harper, UCCE livestock and natural   resources advisor, Mendocino and Lake    Counties, Karen M.   Klonsky, UC specialist, Department of Agricultural and Resource Economics, UC   Davis, and Pete Livingston, UCCE staff research associate, Department of   Agricultural and Resource Economics, UC Davis.

6. New MSU certificate program to cultivate an ... EARTHY EDUCATION

Demand, growing popularity of natural products spurs college to create organic farming program

By Matthew Miller
Lansing State Journal

At Michigan State University's Student Organic Farm, student interns and volunteers already are bringing in bush beans and squash, tomatoes and tat soi, eggplants and mini purplette onions.

Come January, the farm will be working on a different sort of harvest: Not just fruits and vegetables but the next generation of organic farmers as well.

MSU plans to launch a new certificate program in organic farming next year. It will be one of only three university programs in organic agriculture in the country, one of only four in North America.

"The university is responding to student demand and to opportunities," said John Biernbaum, a professor of horticulture and one of the chief architects of the new program.

For years, students have been asking why MSU, a school with a long tradition of agricultural research, wasn't focusing on organic farming, he said.

"We encountered resistance from older faculty members, who said, 'That's never going to feed the world,' " said Seth Murray, one of the students whose efforts led to the creation of the organic farm in 2002.

"That may or may not be true," he added, "but we figured it's a place to start."

The demand for more opportunities to learn about organic farming has continued, Biernbaum said.

But the program also owes its existence to the decade-long explosion in the market for organic foods, which has created opportunities for organic farmers and helped convince universities that growing organic is more than just a fad for hippies and health nuts.

Skip the hormones

Organic food is produced without unnatural fertilizers, antibiotics or hormones and with very few chemicals.

In other words: Organic farmers reject as unhealthy or environmentally unsustainable techniques that many conventional farmers think of as advances in the science of agriculture.

For that reason, Biernbaum said, "land-grant universities didn't just ignore organic, they did more than ignore it."

"They thought it didn't work and didn't make any sense," he said. "Of course, that wasn't the truth."

According to E. Ann Clack, the few classes on organics taught at universities almost always were created because of student demand and the efforts of "wing-nut faculty."

"It was branded as a marginal, weirdo, backyard, granola-cruncher thing," said Clark, who teaches courses on organics at the University of Guelph in Canada. "It was always tangential, and it remained tangential."

That's changing, though.

Clark herself helped to create a major program in organic agriculture at the University of Guelph. When it began last fall, it was the only one on the continent.

But Washington State University followed suit earlier this summer, and Colorado State University will begin an organic production program next month.

The shift is happening, Biernbaum said, in part because, "There's enough evidence now, enough successful organic farms, enough research showing that this can work."

Organic food sales up

Then, of course, there's the economics. For the past several years, organic food has been selling like hotcakes.

In 2005, American consumers bought $13.8 billion worth. That's 2.5 percent of total U.S. food sales.

What's more, the market is growing, and growing fast. The Nutrition Business Journal predicts sales will reach $23.8 billion by the end of the decade.

Even now, demand sometimes outstrips supply.

Mike Hamm, a professor of sustainable agriculture at MSU, said Michiganians consume about $66 million worth of organic fruits and vegetables annually, another $15 million in organic milk.

"I guarantee we're nowhere near that in production," he said.

"And if we (at MSU) don't provide opportunities for farmers to take advantage of these things that are arising, what value are we?"

Michael Potter is the chairman of Eden Foods, a Clinton-based organic foods manufacturer.

He said things have improved significantly since the late 1960s, when he had to go door to door through rural Michigan, looking for farmers interested in growing organic.

But he added there's "a lot of potential for more variety in the state, particularly in organic vegetables."

"Why, when you walk into a large natural foods store, are all the vegetables from California?" he said.

"We can grow carrots here."

The students most interested in organic farming typically are not the sons and daughters of farmers.

Corie Pierce, a manager at the Student Organic Farm and an instructor, said that there are more English and anthropology majors among their volunteers than agriculture majors.

They're students who are interested in "broader issues," she said, things such as environmental sustainability, building community and finding meaningful work.

But, when it comes to farming, she said, "they need to learn almost everything."

Which is why the certificate program will start with the basics and run through everything from direct marketing of organic food to the use of passive solar greenhouses for winter growing.

Program has internship

Students in the program will take classes and work the organic farm for a year, following their formal education with a several-month internship.

The idea is that students will have the skills they need to run their own small organic farm or community garden.

But the continuing expansion of the organic market likely will mean other career options, with grocery chains, for example, or organic food manufacturers.

Holly Markham, an MSU sophomore who's interning at the farm this summer, said the program is a step in a very right direction.

"It's really cool to get the ball rolling on that," she said.

"If people can go and get an education in it, they're more likely to practice it in the real world."

Vicki Morrone

Organic Vegetable and Crop Outreach Specialist

Michigan State University

C.S. Mott Sustainable Food Systems

303 Natural Resources Bldg.

East Lansing, MI 48824

517-353-3542

517-282-3557 (cell)

517-353-3834 (fax)