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Profitability of Organic Farming Systems

Profitability of Organic Farming Systems. Mr. James McDonnell, Teagasc Teagasc National Organic Conference 2009. Outline. Conventional v Organic Sources of financial information NFS EPM Teagasc Budgets Beef production Rearing systems Non breeding/ other systems Dairy production

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Profitability of Organic Farming Systems

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  1. Profitability of Organic Farming Systems Mr. James McDonnell, Teagasc Teagasc National Organic Conference 2009

  2. Outline • Conventional v Organic • Sources of financial information • NFS • EPM • Teagasc Budgets • Beef production • Rearing systems • Non breeding/ other systems • Dairy production • Tillage production

  3. Conventional v OrganicWhy? • Government 5% target • Source of new organic participants • Organic farming systems • Are they difficult to manage? • Do they have lower cost of production? • Are they more profitable? • How profitable are conventional systems?

  4. Why is Profit important? • The business needs profit to… • Pay the manager/ investor ( i.e. YOU) • Reinvest in new business assets so that the business will grow and generate more profit (building up cash is also reinvesting) • Pay back lenders the principal that was borrowed to get the business to its current state

  5. Cattle Systems in Ireland • Cattle rearing systems • Non Breeding / other systems

  6. €420 / ha difference

  7. €501 / ha difference

  8. Beef Systems €100 / ha difference

  9. Organic EPM Results v NFS 2007

  10. Organic Dairy Farming • Comparison with Conventional Winter Milk • E profit monitor results 2008

  11. Winter Milk EPM V Organic EPM(Net Margin / Ha)

  12. Winter Milk EPM v Organic EPM(Net Margin / Cow)

  13. Organic Tillage • Suits mixed farms • 2 operations on most farms • Good margins • Crop rotation critical

  14. Organic Tillage

  15. Conventional Tillage - 2008 • Preliminary results • Gross margin over materials • (seed, spray, fertiliser etc) • Winter Barley G.M/Ha €686 • Winter Wheat G.M/Ha €710 • Machinery costs average €300 - 400

  16. Take Home Messages • Beef • Huge variations in performance • Organics more profitable • Milk • attractive up to 1.7L.U. per ha • Tillage • Excellent margins

  17. Thank you for your attention

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