Profitability and risk of organic production systems in the northern Great Plains

Organic crop production systems are increasingly being adopted by producers in the northern Great Plains. This study evaluated the expected net returns and risk of organic crop rotations, compared to conventional rotations. Field plot data of organic and conventional crop rotations were used to determine the net returns of the systems, using four different levels of premiums for organic produce. The risk of returns was evaluated using estimated cumulative density functions and stochastic dominance. The most profitable organic rotation required high price premiums to dominate the most profitable conventional rotation. However, the most profitable organic rotation dominated some conventional rotations that are commonly used in the northern Great Plains. The organic rotations had slightly higher risk, but the relative risk of rotations had little impact on the optimal rotation.