From Conventional to Organic: The Case of Dairy Farm Transition Decisions

This case study examines farm-level decision-making in the transition from conventional to organic dairy production. Students assume the role of an agricultural consultant advising a dairy farmer who is considering organic certification. Using data from the University of Minnesota’s Center for Farm Financial Management, students analyze how production costs, milk prices, farm size, and transition strategies influence the financial viability of transition decisions. The case introduces a present-value discounting framework tailored to organic transition and includes an Excel-based empirical exercise suitable for recitation or laboratory settings. A key pedagogical feature is that students must work with real-world data limitations, requiring them to approximate unobserved transition costs, evaluate assumptions, and justify their recommendations. By combining quantitative analysis with discussion-based decision-making, the case emphasizes applied economic reasoning and the challenges of making management decisions under uncertainty. This case is designed for upper-level undergraduate courses in agricultural and applied economics, particularly farm management, agricultural finance, production economics, agribusiness management, and agricultural policy. 📝 Request Teaching Notes (https://aeee.scholasticahq.com/pages/1218-request-materials)