C. Alan Rotz, USDA / ARS, Building 3702, Curtin Road, University Park, PA 16802-3702, Heather D. Karsten, Crop and Soil Science Dept., The Pennsylvania State University, 116 ASI Building, University Park, PA 16802-3504, and Robert D. Weaver, Department of Agricultural Economics and Rural Sociology, The Pennsylvania State University, 207 Armsby Building, University Park, PA 16802.
The current market demand and price for organic milk is encouraging dairy producers, particularly those on smaller farms, to consider organic production as a means for improving the economic viability of their operations. Of particular interest in this region is a low-input production system relying on perennial pastures and out-wintering of animals. To characterize this system, extensive production information was collected from three organic dairy farms in Pennsylvania. Based upon these farms, a whole farm simulation model (Integrated Farm System Model) was used to compare four production systems representing organic grass, conventional grass, conventional crop with grazing, and conventional crop with confinement production systems. The performance of each was simulated over 25 years of central Pennsylvania daily weather using the same 250 acre land base, Hagerstown silt loam soil, and herd size of 100 cows plus replacement heifers. Simulation results indicated that farm level accumulation of soil P and K may be a concern on organic grass farms where poultry manure is often the primary crop nutrient source. Whole-farm budgets using prices that reflect recent conditions showed an economic advantage for organic over conventional production. A sensitivity analysis showed that this economic advantage was heavily influenced by the difference in milk production maintained by herds using organic and conventional systems and dependent upon a higher milk price for producers of organic milk. Factors found to have little effect on the relative profitability of organic over conventional production included the differences between organic and conventional prices for seed, chemicals, forage, and animals and the overall costs or prices assumed for organic certification, machinery, pasture fence, fuel, and labor. Thus, at the current organic milk price relative to other prices, grass-based organic production systems can provide an option for improving the economic viability of dairy operations of the scale considered in Pennsylvania.
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