Profitable Transition Strategies
Before being certified organic and being able to receive an attractive organic premium for their crops, growers must undergo a three-year period of transition that can be financially challenging. For three years, they must adopt organic production practices, which can be expensive to set up and result in lower yield. During that time however, they do not receive an organic premium price for their crops. With diminished yields, investment requirements, and low crop prices, is there a profitable way to approach the transition period?
The first step is to understand that the transition period is temporary: the losses incurred during that time do not necessarily reflect the profitability of your system. “You must consider the transition period as an investment, a loan you are taking out at the bank”, says Kathleen Painter from the University of Idaho. With that in mind, you can set two objectives for your transition period:
1. Minimize financial losses during the transition period
2. Use the transition period to maximize gains for the first years of certified organic production (for example, by building soil nitrogen)
Researchers from Idaho and Washington examined 9 different organic systems over 5 years. The first three years were a transition period, different for each system. Year 4 and 5 (both certified organic) were spring wheat followed by winter wheat for all systems.
System 1 had exclusively cereals during the transition periods, while System 9 relied on an alfalfa-oat mix for the entire three years. All other systems included a mix of legumes (for grain or plowed down for green manure) and cereals.
The lesson from the experiment? Stay away from grains during the transition period. The system relying on three years of alfalfa not only minimized losses, but also increased revenue during the certified organic years. Alfalfa increased nitrogen levels and provided weed control, which resulted in greater wheat yields during years 4 and 5, right when the crop could be sold with the organic price premium.
To learn more about alternative transition systems, take a look at this poster: Profitable Strategies for Transitioning to Organic.