Crunching the numbers: There’s more to organic farm production than profit

WEST LAFAYETTE, Ind. — Organic corn earned substantially more than conventional corn over the past five years. So, why aren’t more farmers making the switch?

“Simply because average profits don’t tell the whole story,” said Michael Langemeier, agricultural economics professor and director of the Center for Commercial Agriculture at Purdue University.

“Some organic farms actually earned less than the best conventional farms, and the difference between the highest and lowest performing organic operations was far greater than it was for conventional farms.”

Langemeier compared five years of data from FINBIN, the national farm financial database maintained by the University of Minnesota.

“Organic crop yields were generally lower than conventional yields — no surprise there,” he said.

From 2021 to 2025, organic corn yields averaged about 24% lower, with soybean yields 23% lower and oat yields 36% lower. Yields for winter wheat and alfalfa were similar.

“If yield were the only factor that mattered, conventional production, particularly for corn and soybeans, would clearly have the advantage,” Langemeier said. “But that’s only part of the profitability story.”

Organic crops receive substantially higher market prices. Over the five-year period, organic corn generated about 80% more gross revenue per bushel than conventional corn, while organic soybeans generated more than double the gross revenue per bushel.

“These price premiums more than offset the lower yields,” Langemeier said. “Of course, higher revenues don’t automatically mean higher prices.”

Organic production also comes with higher production costs, particularly in some situations. Weed management is substantially more intensive, crop rotations are often more complex and labor requirements tend to be greater.

“So, the real question isn’t whether organic crops bring in more revenue — it’s whether they leave more money at the end of the year,” Langemeier said.

According to the FINBIN data, they often do.

Organic corn during this five-year period generated average net returns about $310 per acre higher than conventional corn, while organic soybeans averaged about $325 per acre higher than conventional soybeans.

“These are significant differences, obviously, and help explain why organic production continues to attract interest,” Langemeier said.

“But here’s what I believe is the most important finding in this study. The biggest difference wasn’t the average profit. It was the variation between farms.”

For conventional corn, the difference between the highest and lowest performing farms was $866 per acre. For organic farms, this spread exceeded $1,400 per acre.

“So, obviously, some farms are doing really good and others not so good,” Langemeier said.

The same pattern appeared for soybeans. Although the median organic soybean farm earned substantially more than the median conventional farm, some organic soybean producers generated returns that were similar to the lowest performing conventional operations.

“Just because you’re organic doesn’t mean it’s going to be more profitable. It depends on management,” Langemeier said.

He explained that organic production offers greater profit potential, but also requires much stronger management to consistently achieve those returns.

Experience, weed control, crop rotations, marketing and overall management appear to matter even more in organic systems than they do in conventional production, he said.

“It’s very important to control weeds in organic systems,” he stressed.

Langemeier said there are two additional points that are easy to overlook:

• Most organic operations don’t grow only corn and soybeans.

• There is a transition period of two to three years required before a field can be certified as organic, and net returns during those transition years can be relatively low.

Organic rotations typically include crops like oats, winter wheat or alfalfa. In this study, those crops generally produce returns that were similar to or in some cases lower than their conventional counterparts.

“That means you can’t evaluate an organic system looking only at the profitability of corn or soybeans — you must evaluate the economics of the entire crop rotation,” Langemeier said. “You also need to consider whether reliable markets exist for every crop in that rotation.”

For example, he noted, there may not be a market for organic alfalfa in your area.

“Depending on where your farm is located, finding profitable markets for organic small grains or forages in general can be much more challenging than marketing organic corn or soybeans,” he said.

If you’re considering organic production, don’t focus only on the price premium, Langemeier said.

“Focus on whether your operation consistently managed the production system required to earn that premium,” he said.

“Run realistic enterprise budgets. Test how sensitive profitability is to changes in yield, prices and production costs. Also evaluate the returns for the entire rotation, not just your highest-return crops such as corn or soybeans.”

The bottom line is organic corn and soybean enterprises generate substantially higher average net returns over the past five years, but they also showed much greater variability from one farm to another, Langemeier said.

“Success in organic production isn’t simply about earning higher prices,” he said. “It’s about having the management system, experience and marketing opportunities needed to consistently capture those higher returns.”

Read the full analysis and explore additional farm management resources at purdue.ag/4pvW76g.