Organic Agriculture: Organic Production and Costs

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The U.S. organic farm sector has a broad mix of farm sizes and production specialties, and includes many farms that manage both conventional and organic crop and livestock operations as they transition into organic production.

• Every State in the U.S. had some organic agriculture by 2005.

• The organic farm sector is diverse, with both small-scale operations marketing directly to consumers, and large-scale operations targeting national and international markets.

• The organic fruit and vegetable sector has the highest level of adoption, but many organic production specialties, including dairy and poultry, have expanded.

Certified Organic Acres and Livestock Continue To Climb

U.S. farmland under organic management has grown steadily for the last decade as farmers strive to meet consumer demand in both local and national markets. U.S. certified organic crop acreage more than doubled between 1992 and 1997, and doubled again between 1997 and 2005. Organic fruit and vegetable crop acreage, along with acreage used for hay and silage crops, expanded steadily between 1997 and 2005. However, most of the acreage increase for organic grain and oilseed crops took place early in this period, and organic soybean acreage has declined substantially since 2001.

California had more certified operations than any other State, with just over 1,900 operations in 2005, up 20 percent from the previous year. Wisconsin, Washington, Iowa, Minnesota, New York, Vermont, Oregon, Pennsylvania, and Maine rounded out the top 10. Many of these States have a high proportion of farms with fruits and vegetables and other specialty crops. Also, some of these States, particularly in the Northeast, have relatively little cropland but a large concentration of market gardeners.

While adoption of organic farming systems showed strong gains between 1992 and 2005 and the adoption rate remains high, the overall adoption level is still low—only about 0.5 percent of all U.S. cropland and 0.5 percent of all U.S. pasture was certified organic in 2005. Obstacles to adoption by farmers include high managerial costs and risks of shifting to a new way of farming, limited awareness of organic farming systems, lack of marketing and infrastructure, and inability to capture marketing economies. Still, many U.S. producers are embracing organic farming in order to lower input costs, conserve nonrenewable resources, capture high-value markets, and boost farm income.

ERS collaborates with over 50 State and private certifiers to make U.S. and State-level estimates of certified organic acreage and livestock. See more data on organic production from ERS.

Organic Production Costs and Returns

ERS and NASS expanded USDA's major producer survey, the Agricultural Resource Management Survey (ARMS), in 2005 to include organic farmers. Dairy and soybeans are the first two organic farm sectors that have been included in this survey.

The 2005 ARMS included a sub-sample of organic dairies and collected detailed information about the production practices and costs on dairy farms in 24 States representing over 90 percent of national milk production. Estimates of milk costs and returns are available from the survey for 2005, by State and size of operation for all milk producers and for conventional and organic dairies. For more information, see the report A Comparison of Conventional and Organic Milk Production Systems in the U.S.

USDA's 2006 ARMS collected information about the production practices and costs of soybean growers in 19 States (representing over 97 percent of U.S. planted soybean acres). A set of estimates is now available from the survey that presents costs and returns for 2006 by region and size of operation for all soybean producers and for conventional and organic producers for regions and size groups with sufficient sample for statistical reliability. For more information about these soybean cost and return estimates, see The Profitability of Organic Soybean Production.

See more data on organic production from ERS.

See related readings on organic farming.