Benchmarking project offers certified organic and organic transition farmers scholarships for farm business management

Benchmarking project offers certified organic and organic transition farmers scholarships for farm business management

FOR IMMEDIATE RELEASE

Contact: Joleen Hadrich

University of Minnesota

College of Food, Agricultural and Natural Resource Sciences

jhadrich@umn.edu, 612-626-5620

Benchmarking project offers certified organic and organic transition farmers scholarships for farm business management

Dec 1, 2021. St. Paul, MN -- Organic farming promises price premiums for everything from milk and feed corn to apples and raspberries. The potential for economic rewards is enticing. However, little is known about whether these premiums outweigh any added costs associated with organic management. “Farmers need to know whether organic farming is going to pay off before they commit to the three-year transition period,” says Joleen Hadrich, associate professor and Extension Specialist in the Department of Applied Economics at the University of Minnesota.

Researchers at the University of Minnesota hope to change that by offering a 25-50% cost-share on tuition for farmers enrolled in the Farm Business Management (FBM) program as part of a multi-year project, Organic Farm Financial Benchmarking in the Upper Midwest. FBM educators work with farmers to complete annual enterprise budgets, balance sheets, cash-flow plans and projected profitability statements. These financial statements can be used by individuals to make strategic decisions that will help the farm business remain sustainable, in loan applications and crop insurance reporting. When aggregated, the financial data will help researchers analyze the profitability of organic and organic transition enterprises for the farming industry.

“This is a unique opportunity for farmers in the Midwest,” Hadrich says. The cost-share program subsidizes FBM tuition, which can cost up to $2,000 per year, for any farmer who is certified organic or transitioning to organic. “Farmers and ranchers are invited to apply for the scholarship regardless of operation size, commodities produced or marketing channels used,” says Hadrich.

As an FBM student, farmers work one-on-one with FBM instructors to improve their knowledge and understanding of accounting, budgeting, finance, tax management, and business analysis. FBM instructors visit farms to work directly with all members of the family who participate in business operations. At the end of each year, farmers receive individualized income statements, cash flow reports and balance sheets for the operation as well as specialized enterprise analyses for different crops and/or marketing channels.

All organic data submitted through the cost-share effort will be aggregated and included in the Center for Farm Financial Management’s searchable online database, called FINBIN. Data will be used to develop regional benchmark reports and build Extension programming. Each participating farm will receive individualized benchmark reports, financial analysis, and cash flow reports working with their FBM instructor.

A report from the first year of the organic benchmarking project, Upper Midwest Organic Farm Business Management 2020 Annual Report, is available online through the University of Minnesota. The report details whole farm and enterprise returns as well as traditional financial indicators for organic dairy and row crop producers in Minnesota and Wisconsin. The report, including enterprise results for organic dairy, soybeans, corn, corn silage, alfalfa hay and haylage, is available at z.umn.edu/OrganicReport.

Learn more about the organic benchmarking cost share program and apply for scholarships at: z.umn.edu/organicscholarships.

Contact Joleen Hadrich (jhadrich@umn.edu) or Gigi DiGiacomo (gigid@umn.edu) with any questions.

To learn more about the FBM program contact Cory Detloff in Minnesota (Cory.detloff@clcmn.edu), Brad Sirianni in Wisconsin (SirianniB@westerntc.edu) and Jason Fewell in North Dakota (jason.fewell@ndscs.edu). Funding for the organic benchmarking cost-share program is provided through the USDA-Organic Research and Extension Initiative Program (2019-51300-30484).