Organic Commodity Insurance


In 2011, for the first time, USDA is offering crop insurance for corn, soybean, cotton and processing tomato farmers that recognizes the organic price in its coverage.  This is not a new crop insurance policy. It adds the organic price option to existing production and revenue coverage.

In the event of a loss, organic farmers with this coverage will receive benefits calculated based on the wholesale organic rather than the conventional price, coming closer to addressing their true losses. This is an important step by USDA, and may provide an important risk management tool for organic producers.

Frequently Asked Questions about Crop Insurance with the Organic Price

Farmers are strongly encouraged to talk through their crop insurance options with their crop insurance agent.  To locate an agent near you, go the USDA Risk Management Agency Agent / Company Locator.

How is the price determined?

The organic price is determined by the average daily closing price on the Chicago Board of Trade during the discovery period.  For North Carolina, the 2011 discovery period is from January 15 until February 14, and can be found on the Risk Management Agency web site.  For revenue coverage, the price is determined by the average daily closing price on the Chicago Board of Trade during the discovery period.  For North Carolina, the 2011 discovery period is from September 1 until September 30.  Prices are released within three business days after the end of the discovery period.

Will the insurance cost more?

Any time coverage is increased, the cost of the coverage increases as well, so coverage with the higher organic price will cost more than coverage at the conventional price.  However, farmers have the option of reducing the rates of coverage to reduce their costs.

Do I have to take the organic price?

Farmers who are producing organic crops will need to  receive the organic coverage.  However, if that coverage is more costly than the farmer wants to pay, they can reduce the level of percentage of coverage in the policy to reduce the price.

Does it cover the direct market organic price?

No.  The price that the crop insurance is based on is the Chicago Board of Trade (CBOT) price, not a direct market price.  Farmers who receive a direct market price are encouraged to look at Adjusted Gross Revenue and Adjusted Gross Revenue – Lite crop insurance policies.

What types of crop insurance have the organic price election?

Available policies include revenue protection, revenue protection with harvest price exclusion, and yield protection.