Organic Crop Budgeting Tool
Introduction
Montana State University’s Central Agricultural Research Center is always striving to serve agricultural producers in our region through research projects, addressing problems and impacts of agricultural production, and by disseminating knowledge to our producers through our publications, teaching, and outreach. Often we work with Montana’s agricultural producers on specific research projects.
The Central Agricultural Research Center has developed an organic crop budgeting tool for up to six organic grains in Montana. According to the USDA NASS 2014 Organic Survey, “Montana has the second most organic acres in the country”, and yet, there is little research available on Montana organic grains. The purpose of this work is to discover the potential profitability of growing organic grains in Montana. Ultimately, an organic crop budget could be used to help organic producers make growing decisions and provide transition farmers with useful information when contemplating whether to switch from conventional to organic production.
Our goal is to provide an accurate, user-friendly tool to show potential profitability of organic crops in Montana. The crops in the budget are typical organic crops grown in Montana and are intended to be adjusted by individual operators as a guide for their management decisions.
Budgets
Our budgets are divided into a cash flow section and individual crops grown. Individuals can adjust any numbers highlighted in green to represent their operation. The numbers in black are then calculated based on the market yield, market prices, and costs involved in the operation.
Machinery
Since machinery varies widely among operations, the producer can enter their cost of machinery (per acre) owned or hired by custom harvesters.
Certification
Organic certification costs also vary depending on the operation’s gross sales and the certification program utilized.
Prices
Using conventional market prices in transition years, operators can estimate what they would receive for their crops. The USDA AMS Organic Reports provide market prices for organic grains. Local millers can also provide accurate market prices for the region in which the farm is located.
Seed and crop rotations
Producers can and often use their own seed for planting small grain crops in Montana. Certified organic seed is required unless it isn’t available in which case conventional untreated seed can be used. Crop rotations are very important for managing pests, soil moisture, and soil nutrients. Crop rotations should be used except in the case of alfalfa where stands are typically maintained for four years.
Contracts
Marketing for organic grains is important to ensure good prices. A Montana producer can use a contracted price to secure a price per bushel.
Limitations
Farm operation sizes vary widely in Montana and there is no typical-sized operation. Crop rotations vary as well but typically include a small-grain crop, pulse crop, and green fallow. This budget should be used as a tool to help identify potential profitability in growing organic crops in Montana.
