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AG ECONOMISTS ISSUE REPORT "SURVIVAL AND GROWTH OF ORGANIC FARMS IN THE U.S."
Jul. 3, 2023
Source: Agricultural & Applied Economics Association (AAEA) news release
Organic production becomes more concentrated on larger farms when consumer demand for organic increases, which tends to happen when the economy is stronger. A new study finds organic farms are most likely to exit 1-2 years after entering, which is fast given the high cost of transitioning to organic.
In the new article "Survival and growth of organic farms over the long-run" published in the Journal of the Agricultural & Applied Economics Association, Michael Brady, David Granatstein, and Elizabeth Kirby from Washington State University.
The authors say "We had two main findings. First, organic farms have the highest exit rates in the first couple years after becoming certified organic producers. Second, large organic farms are more sensitive, in terms of exit and growth, to organic market conditions than small organic farms."
While discussing the structure of their research they state "we constructed a record of entry, exit, and growth decisions for organic farms back to the beginning of the industry in the 1990's, which is much longer than previous studies. Then, we track nearly every farm in our study region (Washington State), which is a significant improvement over a survey of farms that is likely to underrepresent small farms.
ABOUT AAEA
Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes three journals, the Journal of the Agricultural and Applied Economics Association (an open access journal), the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more click here.
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