| 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.
The New
Farm Organic Price Index®
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