The Economics and Productivity of Organic versus Conventional U.S. Dairy Farms

United States certified organic and conventional dairy farms are compared on the basis of economic, financial, and technological measures using dairy data from the 2016 USDA Agricultural Resource Management Survey. A stochastic production frontier model using an input distance function framework is estimated for U.S. dairy farms to examine technical efficiency and returns to scale (RTS) of farms of both systems and by multiple size categories. Financial and economic measures such as net return on assets and input costs, as well as technological adoption measures are compared by system and size. For both systems, size is the major determinant of competitiveness based on selected measures of productivity and RTS.