What Makes an Organic Dairy Farm Profitable in the United States? Evidence from 10 Years of Farm Level Data in Vermont
Round 1
Reviewer 1 Report
Dear authors,
thank you for this high quality manuscript which I find relevant and thoroughly executed.
There is not much I could contribute and really nothing to criticize.
However, you should review the presentation of your mathematical model. Is there a bracket missing? Also I noticed that - maybe due to converting the document - in line 77 and 84 descriptors are missing.
One comment: Your model does not reveal different factors influencing profitability of organic dairy farms than are found in the literature for conventional dairy farms. But, what exactly are the differences in Vermont dairy production between conv. and organic? Could you very briefly include this in your introduction to inform readers unfamiliar with your local production, farm structure, organic directives etc.
Author Response
We would like to thank the reviewer for the positive comments and helpful feedback on this paper.
In response to the first comment, we have fixed the variables in lines 100 (formerly 77) and 105 (formerly 83) and added a missing bracket.
In response to the second comment, we have added a few sentences of additional background information to the introduction of the paper. We briefly describe organic certification requirements and associated effects on dairy production systems. This information will provide helpful context to readers unfamiliar with US dairy policy and Vermont agriculture.
Reviewer 2 Report
This is a nice piece of work. method is sound and well presented, using a rare data set. The work applies standard methods well, and identifies the limits of the method. In particular, the econometric methods of analyzing farm data all founder on the rocks of management as an input, the value of capital, treatment of capital inputs as variable inputs, and risk. The attempt to include a management variable is admirable, though the choice of proxy seems strange, at least to someone from a country where farmers are meant to be efficient and government handouts are scarce.
Identifying the role of size is valuable information.
The results would likely be the obvious for extension workers who know this type of farming, but maybe news to others. What going organic farming does for risk of farm income would be an interesting question to explore.
Author Response
We would like to thank the reviewer for the positive comments and helpful feedback on this paper.
In response to the first point, we appreciate your insight into issues raised by management as an econometric variable. We recognize the limitations of our management proxy variables, but still find them a useful addition to our model. Our inclusion of government payments as a proxy variable is based on the nature of government payments in the context of organic farming in Vermont. With few direct subsidies available to organic dairy producers in the US context, government payments in our dataset consist primarily of competitive grants rewarding conservation practices and participation in risk management programs. While imperfect, we feel this variable somewhat reflects management ability in an organic production context.
In response to the last point, variation in income risk between organic and conventional dairy farms has been the subject of a few recent research papers in northern Europe. Given the lack of studies that have explored this topic in the US context, we have chosen not to address it in this paper.
