Comparison of Long-Run Net Returns of Conventional and Organic Crop Rotations
Abstract
1. Introduction
2. Materials and Methods
2.1. Enterprise Budgets
2.2. Downside Risk Model
3. Results
3.1. Net Returns per Acre and Break-even Prices and Yields
3.2. Trade-Off between Risk and Return
4. Discussion
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
References
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Crop | Year 1 | Years 2–10 |
---|---|---|
Conventional Corn | $3.00 | $3.60 |
Conventional Soybeans | $8.00 | $8.85 |
Conventional Wheat | $4.90 | $4.85 |
Transition Soybeans | $8.00 | $8.85 |
Transition Wheat | $4.90 | $4.85 |
Organic Corn | $6.90 | $8.30 |
Organic Soybeans | $16.80 | $18.60 |
Organic Wheat | $9.25 | $9.70 |
Crop | Year 1 (bu/acre) | Annual Increment (bu/acre) |
---|---|---|
Conventional Corn | 176.0 | 2.00 |
Conventional Soybeans | 54.0 | 0.50 |
Conventional Wheat | 77.0 | 0.35 |
Transition Soybeans | 36.3 | 0.35 |
Transition Wheat | 58.5 | 0.25 |
Organic Corn | 118.8 | 1.50 |
Organic Soybeans | 36.3 | 0.35 |
Organic Wheat | 58.5 | 0.25 |
Enterprise | Conv | Org | |
---|---|---|---|
C/S | C/S/W | C/S/W | |
Gross Revenue | 442.86 | 392.16 | 505.56 |
Variable Cost | 253.88 | 212.02 | 196.35 |
Contribution Margin | 188.97 | 180.14 | 309.21 |
Fixed Cost | 233.25 | 230.79 | 285.71 |
Earnings | −44.28 | −50.65 | 23.50 |
Net Return to Land | 115.13 | 108.75 | 182.90 |
Crop. | Base Case | C/S NR | C/S/W NR |
---|---|---|---|
Organic Crop Prices, Years 2–10 (per bushel) | |||
Corn | $8.30 | $6.82 | $6.68 |
Soybeans | $18.60 | $15.29 | $14.97 |
Wheat | $9.70 | $7.97 | $7.81 |
Transition and Organic Crop Yields, Year 1 (bushels per acre) | |||
Corn | 118.8 | 98.8 | 96.9 |
Soybeans | 36.3 | 30.2 | 29.6 |
Wheat | 58.5 | 48.7 | 47.7 |
Scenario | Expected Net Return | Negative Deviations | Conventional C/S | Conventional C/S/W | Organic C/S/W |
---|---|---|---|---|---|
1 | 182.90 | 133.73 | 0.000 | 0.000 | 1.000 |
2 | 178.51 | 125.00 | 0.065 | 0.000 | 0.935 |
3 | 173.49 | 115.00 | 0.139 | 0.000 | 0.861 |
4 | 168.46 | 105.00 | 0.213 | 0.000 | 0.787 |
5 | 163.43 | 95.00 | 0.287 | 0.000 | 0.713 |
6 | 158.40 | 85.00 | 0.362 | 0.000 | 0.638 |
7 | 153.37 | 75.00 | 0.436 | 0.000 | 0.564 |
8 | 148.35 | 65.00 | 0.510 | 0.000 | 0.490 |
9 | 143.32 | 55.00 | 0.584 | 0.000 | 0.416 |
10 | 138.29 | 45.00 | 0.658 | 0.000 | 0.342 |
11 | 133.19 | 35.00 | 0.700 | 0.031 | 0.269 |
12 | 126.92 | 25.00 | 0.224 | 0.550 | 0.226 |
C/S = 1 | 115.13 | 72.98 | 1.000 | 0.000 | 0.000 |
C/S/W = 1 | 108.75 | 99.75 | 0.000 | 1.000 | 0.000 |
Org = 1 | 182.90 | 133.73 | 0.000 | 0.000 | 1.000 |
L Org | 121.91 | 41.37 | 0.900 | 0.000 | 0.100 |
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Langemeier, M.R.; Fang, X.; O’Donnell, M. Comparison of Long-Run Net Returns of Conventional and Organic Crop Rotations. Sustainability 2020, 12, 7891. https://doi.org/10.3390/su12197891
Langemeier MR, Fang X, O’Donnell M. Comparison of Long-Run Net Returns of Conventional and Organic Crop Rotations. Sustainability. 2020; 12(19):7891. https://doi.org/10.3390/su12197891
Chicago/Turabian StyleLangemeier, Michael R., Xiaoyi Fang, and Michael O’Donnell. 2020. "Comparison of Long-Run Net Returns of Conventional and Organic Crop Rotations" Sustainability 12, no. 19: 7891. https://doi.org/10.3390/su12197891
APA StyleLangemeier, M. R., Fang, X., & O’Donnell, M. (2020). Comparison of Long-Run Net Returns of Conventional and Organic Crop Rotations. Sustainability, 12(19), 7891. https://doi.org/10.3390/su12197891