Price Tracking Methodology
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The Organic Price Discovery Tool is a price tracking tool that provides public access to the latest prices for key organic grains, oilseeds and pulses grown in Canada. The methodology behind the Organic Price Discovery Tool is outlined below:
Data collection: Price data for organic grains, oilseeds and pulses are gathered and published from both organic farmers and buyers every two weeks. Data are collected only from certified organic operators and we do our best to verify this status before accepting a price. Most of the prices are collected from phone calls made by staff to certified buyers and sellers just prior to publication. Unsolicited prices undergo more rigorous scrutiny to determine their source.
Prices are represented as median values in Canadian dollars. Median values were chosen over averages because they provide a more stable midpoint in a series of observations, less susceptible to extreme values.
For spot prices, we accept only transactions that have been agreed upon by both the buyer and the seller in the two week period preceding publication. For contracts, the contract may have been negotiated at any point in the past, but the delivery period for the grain must be valid at least for the two week period preceding publication. We separate prices collected from different regions if median prices for the regions are significantly different. If they are not, prices from different regions are aggregated. Outlier prices - i.e. those that fall more than three standard deviations from the average price, are not included.
Standardization: Data are standardized to ensure consistency and comparability. Prices gathered from the United States are converted to Canadian dollars based on the currency value on the date closest to the transaction date.
Aggregation and Analysis: after collection and standardisation, data are aggregated and analysed using basic statistical methods. For each price, both the range - low and high and number of observations are posted. Users should use the number of observations as a proxy for data quality (reliability). Prices based on a low number of observations should be viewed with more scepticism than those based on a higher number of observations. Note that the number of prices depends both on how common a product is (i.e. how much volume is grown in North America) and the number of companies that actively purchase the product. For example, oilseeds such as hemp and mustard have a very restricted set of buyers that we can approach for price information.
Disclaimer: Because price data are collected from farmers and grain buyers, they are subject to distortion related to human nature. For instance, in order to influence price, some grain buyers may exhibit a tendency to downplay prices meant for public distribution, while some producers may exhibit the opposite tendency (to overstate prices). Since there are few published prices available in this sector - one of the main motivations behind the Organic Grain Hub project, our solution to this challenge is to collect as much price data as we can from a diverse range of sources and geography, while ensuring that both buyers and sellers are represented in the data. Furthermore, we gather our data only from trusted sources and do not include prices that are outliers - i.e. more than three standard deviations from the average price.
The purpose of the Organic Grain Hub is to act as a benchmark, primarily to give organic farmers a starting point in negotiations with buyers. Without this important information, farmers are at the mercy of the marketplace. Farmers and buyers should use the information with caution and do their own research. If you are a farmer, contact as many of the buyers in our directory as you can and develop your own baseline. P.S., when you do this, we would love to hear the results of your research. Either fill out the submit a price form on the Organic Grain Hub, or email firstname.lastname@example.org with your pricing information. By doing this, you contribute to strengthening the data and knowledge base for everyone in the industry.