With Expanded Options, Organic Producers of Specialty Crops Increase Use of Federal Risk Management Products

While all crops are prone to risk, organic specialty crops—a broad term that includes fruits, tree nuts, vegetables, beans (pulses), and horticulture nursery crops—face specific challenges. Organic certified crops are grown in accordance with the standards set by USDA’s National Organic Program. To meet organic standards, producers must follow restrictions that can increase production costs. For instance, to maintain USDA organic certification, growers must prevent the commingling of their organic crops with nonorganic products and adopt specialized practices for pest, disease, and weed management. Organic growers also face different marketing characteristics that affect risk management. Organic crops may have fewer market participants than conventionally grown crops, limited availability of marketing data, and an increased risk of financial loss due to contamination from prohibited substances. Additionally, organic crops generally command higher prices than conventional crops. This price premium gives farmers an opportunity to recover production costs but also introduces further price risk.