GLGT Blog
What is the Conversion Factor of Conventional to Organic Corn Prices?
Why is This Important?
Growers historically can use a conversion factor between conventional corn prices to determine what would be an appropriate organic price. This is a popular, though not always accurate, method of determining prices.
The above chart shows the conventional and organic corn prices through the last 10 years, along with the multiple and how it has changed. The multiple is if you took the conventional corn price in 2013 $6.15 a bushel, and multiplied it by 2.00, you would get the organic corn price of $12.32.
That multiple has shifted through the years, and is currently sitting at about 1.62. It’s important for growers to understand that the multiple changes along with the crop prices throughout the year.
If we look at the last 10 years, a historical multiple to use was 2. So twice the conventional corn prices is about the price expected for organic corn. However, in the last 2 years, increases in the conventional corn price have proved this multiple to be out of date. A more accurate multiple would be about 1.6 the conventional corn price is a good estimate of organic corn prices.
(Data Source for Graph: USDA Conventional & Corn Prices)
