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Profit potential in organic farming

Profit potential in organic farming

The four-year-old trial of organic dairy farming by the Institute of Natural Resources indicates the farming method can be just as profitable as conventional farming.

Although pasture production, and therefore milk production, is lower on the organic farm, this is compensated for by the extra money consumers are prepared to pay for organic milk.

The trial began in 2001 when the Massey dairy farm outside Palmerston North was split in two as evenly as possible in terms of land and herds.

It is the only comparative grassland-based open grazing dairy study in the world, with the two farms managed individually according to best practice and monitored intensively for production, animal health and environmental impacts.

It took two years for the 20.4ha organic farm to achieve full organic certification and in that period the results were similar. In the two years since, production has been 10 to 20 percent lower on the organic farm but environmental impacts appear to be less than on the conventional farm.

Because of the 20 percent premium paid for organic milk, net incomes are similar.

The basis for the trial is that organic farming systems are usually thought to be less productive and therefore potentially less profitable, but they are also thought to be better for the environment. Long-term objectives of the trial include:

- Developing farm and herd management systems that optimise performance.

- Comparing the impacts of organically and conventionally-managed systems on soil health, water quality, pasture and forage crop productivity, and animal production and health.

- Identifying management practices that improve soils’ biological activity, optimise clover content and best maintain biological nitrogen fixation.

- Determining the stability and sustainability of high biodiversity organic dairy pastures, including weed control.

Scientists involved in the project are from the Institutes of Natural Resources, Veterinary, Animal and Biomedical Sciences, and Food, Nutrition and Human Health.

In a report just out they conclude it is still too early to draw firm conclusions “since three-plus years is quite a short time in the transition to a stable organically-managed farming system”.

However, the authors, led by senior lecturer Dr Terry Kelly, say the lower pasture production is likely to be due to the inability to cost-effectively apply nitrogen fertilisers at critical periods in the spring.

They also note that organically-rearing stock may provide an advantage. Calves had grown exceptionally well and tended to be slightly heavier and in better condition than their conventional counterparts.


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