| The
New Farm Organic Price Index®
Fact Sheet |
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| The New Farm Organic Price Index® (OPX®) is the first-ever wholesale pricing tool organic farmers can use to market their products competitively. Available free of charge on www.newfarm.org, the index tracks selected prices from the fruit, vegetable and grain sectors. Why create such a tool? While conventionally grown or raised commodities have been tracked with pricing indices for many years, the organic community has historically been marginalized and has lacked access to pricing information. Today, organic farmers hold only half the information necessary--the cost of their production--to make sound business decisions. With the OPX, they now have the other half of the equation: accurate pricing information. Without the OPX, the situation organic farmers and buyers face is analogous to buying and selling stocks without having daily stock valuation figures posted on the stock exchanges. Buyers and sellers would not know what had recently been paid for a stock and no idea of its current value. However, with the OPX in hand, farmers can better plan their business strategies by tracking price trends over time, have an educated idea of the true value of the products they produce and determine production budgets based on organic sales prices. What foods does the OPX track? A variety of fruit, vegetables and grains. Where does the OPX get prices? The OPX uses a variety of data sources, seeking the best available data on the developing wholesale markets for certified organic fresh produce and grains, as well as the emerging national market for certified organic dairy and self-identified sustainably raised meats. Data sources include: Fruits and vegetables Organic prices are provided by large wholesale distributors or sales agencies that specialize in organic fruits and vegetables on the East and West Coasts. These organizations perform a sales and distribution function similar to the United States Department of Agriculture’s (USDA’s) Agricultural Marketing Service terminal markets. Conventional prices are gathered from AMS terminal markets in Boston and Seattle. Grains Organic prices are provided with the assistance of elevators that trade organic grains throughout the year and the Organic Farmers’ Agency for Relationship Marketing (OFARM). OFARM represents organic producer groups in 18 states and Canada. Conventional prices are gathered from AMS sources and from grain delivered to The Andersons, a large private grain handling firm with elevators in Illinois and Ohio. How does the OPX help farmers and wholesale buyers of organics? Price transparency. Prices of organically grown and conventionally grown foods are seen side by side, highlighting the premiums organic can often obtain. Competitive information. Buyers and sellers of certified organic food now know what certain items should and do sell for around the country. Fair information for insurers. Organic farmers, who have traditionally had to insure their crops according to conventional pricing, now have better documented price information for their goods, resulting in more appropriate coverage. Helping retail consumers. The OPX helps educate retail consumers, resulting in a better understanding of organic vs. conventional pricing and the food marketplace. |
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