Organic Data and Research from the ARMS Survey: Findings on Competitiveness of the Organic Soybean Sector

Abstract

Organic production has expanded rapidly in the US over the last decade, particularly for specialty crops. In 2005, USDA's Economic Research Service (ERS) and National Agricultural Statistics (NASS) began to include targeted sub-samples of organic producers in its major annual economic survey, the Agricultural Resource Management Survey (ARMS). In this article we use data from the 2006 ARMS to examine the characteristics of producers adopting the organic production approach to soybean production, and contrast these with conventional producers. Organic soybean producers were younger, had less acreage, were less likely to work off-farm, and were more often located in northern states than conventional soybean producers. Also, differences in the costs of production for each system are derived. Results indicate that the average costs for producing soybeans were higher for producers using the organic approach in 2006 after accounting for the influence of other factors on production costs, sample selection bias, and organic transition costs, but were covered by the higher premiums that year. However, the organic price premium for soybeans has narrowed since 2006, and reduced the economic incentive for converting to or maintaining an organic system.