BS in Agricultural Business
This study examined the differences in costs and profitability for established conventional and organic almond orchards in Stanislaus County, California. The study used a partial budgeting approach to compare cost and profitability for established orchards for 2010, and thus ignored transition costs. Data was obtained from UC Davis cost studies for organic almonds, and from the Green Valley Ranch in Keyes, CA for conventional almonds. Adjustments were made to the U.C. Davis costs to account for changes in input use, input costs and grape prices Stanislaus County during the 2010 growing season, and to ensure both orchards in the study reflected a similar management style.
The basic costs were found, and the organic costs were slightly higher than the conventional, however with the partial budget change it was deemed “unfeasible” without a price premium for organic. The study found that the profitability of established orchards would be equal with a price premium of 29%. There were many limitations and estimations when doing this study such as secondary information; therefore the price premium may be more or less depending on the orchard.