Great Agricultural Equalizer : Organic Farmers Gain Ground Due to Rising Chemical Costs

George Cunningham doesn’t like recessions any more than the next guy. But this one, he says, is an educational experience for conventional farmers, a kind of comeuppance for the majority of American growers who rely heavily on chemicals to ply their trade.

Spurred by skyrocketing oil prices, the economic downturn has hurt conventional agriculture by driving up the price of fertilizers, herbicides, pesticides and diesel fuel--petroleum-based products that form farming’s backbone.

“All your fertilizers, all your pesticides are based in petrochemicals,” said Cunningham, owner of Cunningham Organic Farm in Fallbrook. “There’s a heavy expense there that the organic farmer doesn’t have.”

After 16 years on the fringes of American agriculture, Cunningham is finding that it pays to produce without pesticides. He has taken “sustainability”--the agricultural buzzword for relying on few chemical additives--to heart and is being rewarded for his troubles.

As his conventional counterparts see their production costs soaring because of events outside their control, his major drain--labor--holds steady.

“Some of my best friends are conventional farmers,” he said with a grin. “We farm this way because we choose to farm this way, we like to farm this way, we feel good about it. It’s not a knock on anyone else.”

But he has noticed, along with his organic-farming colleagues, that the economic crunch is becoming the great agricultural equalizer.

Farm production costs are expected to increase up to $2 billion a year if the price of oil stays above $30 per barrel. American consumers will foot part of that bill in the form of increased food prices, according to the U.S. Department of Agriculture.

Higher food transportation costs alone are expected to boost retail food prices by about 2% next year, the agency said. That jump does not take into account increases in the cost of agricultural chemicals.

“This is where organic is insulated,” said Bob Scowcroft, executive director of California Certified Organic Farmers. “They don’t have a petrochemical base. Most organic farmers have taken the idea of sustainability to heart. . . . Overall, I think most organic farmers won’t have as many problems with the recession.”

Although organic farmers are not immune to high transportation costs, they have always shunned chemical additives. And they are seeing, for the first time, that their production costs are becoming comparable to those of conventional farmers. Theirs are not down; everyone else’s are up.

Chemical-based fertilizer prices have jumped 15% since Iraq invaded Kuwait in August, said Steve Beckley, executive vice president of the California Fertilizer Assn. That’s an increase of about $15 to $20 per ton. California farmers use about 2 million tons of fertilizer per year.

The prices of many organic fertilizers, on the other hand, are holding steady. Bill Brammer, president of California Certified Organic Farmers and a San Diego County tomato, squash, avocado and citrus farmer, said he is paying the same for composted kelp and chicken manure as he did several years ago.

“This is one of the big reasons I went into organics,” he said. “With the oil situation and the Middle East situation, I didn’t want to be dependent on the (Persian Gulf) for my fertilizer.”

As conventionally produced foods get pricier, many organic farmers are finding that the price of their products is holding steady. In the past week, for example, a 40-pound box of conventionally grown lettuce brought a wholesale price of more than $20, up from the usual $8, said Alex Otten, sales representative at Cal World Produce Sales Inc.

Cal World is a subsidiary of Lamont-based Mike Yurosek & Son Inc., the world’s largest carrot grower. Yurosek grows about 16,000 acres of root vegetables. Of the total, 1,800 acres are planted in organic carrots.

“I haven’t seen any pressure (on the organic carrot price) to go up,” Otten said. “We’ve been at $9 per 48 pounds of carrots . . . for the last couple of months. That market has been very stable.”

Organic growers are loathe to say how much more it costs to grow crops without chemicals. They consider it proprietary information that’s closely held to protect profit margins. Such secrecy helps to keep prices as much as 50 cents per pound above those paid by consumers for conventional foods, Scowcroft said.

The main reason for higher prices is the extra labor that goes into organic growing, labor that is evident at Cunningham Organic Farms. George Cunningham cultivates 12 acres of macadamia, Fuyu persimmon, citrus and Asian pear trees in a dramatic canyon in northern San Diego County.

His operation, like most organic farms, is too small to use mechanical equipment for harvesting. The harvest is done by hand, shooting up production costs in relation to larger, conventional farms.

Controlling weeds without the benefits of herbicides is another labor-intensive task that jacks up the price of organic produce.

“We’ll do mowing and hand-weeding,” Cunningham said as he strolled past heaps of compost and chicken manure toward a stand of macadamia nut trees. “A chemical farmer might come through and spray (herbicides) twice a year. We mow once a month.”

So the labor costs are high, but chemical and fuel costs are not.

“For 50 years, very, very, very good farmers have been told to spray by the chemical companies,” Cunningham said. But he senses that the differences between conventional agriculture and organic farming are narrowing.

One reason is that consumers are demanding changes in farm practices that decrease chemical use. Another reason is money. Chemical additives are expensive, and the economic slump is driving that lesson home.

“I think the whole organic thing is going to continue to grow,” he said.