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Organic Terminology  

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B
Basis The difference between a spot or "cash" price and a specified futures price.
   
Bid Willingness to buy at a stated price according to specified conditions.
   
Broker A person paid a fee or commission for acting as an agent in making purchase or sales.
   
C
CIF Deleted periods between letters Cost, Insurance, and Freight.
   
Carrying Chargers Those costs incurred in warehousing the physical commodity, generally including interest, insurance, and storage. May include allowance for loss in quality, condition, or volume.
   
Cash Price Term used to represent the economic value or worth of a commodity. Often used to distinguish all other prices from futures trading on an organized commodity futures market.
   
Commission Merchant Person who makes a trade in his own name and becomes liable as principal between himself and the other party to the trade.
   
Consignment A shipment sent to a commission merchant for him to sell.
   
Contract Price Price and conditions of sale agreed upon when buyer and seller negotiate a transaction.
   
Country Elevator Grain elevator located in a local farming community to which farmers bring their grain for sale or storage.
   
Crop Year (U.S.) Period from one harvest of a crop to the next harvest in the following year. The period varies among commodities as follows: Wheat, Barley, Oats June 1-May 31. Rice August 1-July 31. Corn, Sorghum, Soybeans October 1-September 30.
   
D
Deferred Delivery (See Forward Contracting.)
   
Discount A schedule of deductions from the cash price for a commodity grading lower than the base grade.
   
F

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FOB Deleted periods between letters Free On Board, price at place or origin not including transportation charges.
   
Foreign Material (FM) - Dockage Anything other than the designated commodity which is present in a lot.
   
Forward Contracting A transaction common in many industries, including commodity merchandising, in which the buyer and seller agree upon delivery of a specified quality and quantity of goods at a specified future date and price or formula for establishing the price.
   
Forward Price Price of a commodity bought or sold for a specified delivery period usually 30 days or more away.
   
H
Handling Charges Charges for loading and unloading a commodity.
   
I
Inspection Certificate Certificate showing grade and other factors of quality issued by inspector licensed under the U.S. Grain Standards Act, or a certificate issued on agricultural commodities under the Agricultural Marketing Act of l946.
   
M
Made with Organic Ingredients At least 70 percent organic ingredients. The label must identify both organic and nonorganic ingredients.
   
N
Nominal A nominal price quotation is reported in the absence of a cash trade if the reporter is confident that the nominal price reflects current market value conditions.
   
O
100% Organic All organic ingredients produced without synthetic fertilizers, pesticides, herbicides or sewage sludge; food irradiation or genetically modified organisms; no artificial growth hormones in livestock; and farmers adhere to soil and water conservation methods.
   
100% Natural All natural; natural: Not federally regulated.
   
Offer Indication of willingness to sell at a given price, same as "ask."
   
Open-End Contract A contract to purchase with a minimum cash payment, with final settlement at the end of the season.
   
Organic Refers to product that has been grown organically, according to the Organic Foods Production Act (OFPA) of 1990. At least 95 percent organic ingredients; remaining 5 percent can be approved nonorganic ingredients, such as citric acid and baking powder, or approved nonorganic agricultural ingredients when they are not available in organic form.
   
Organic Certification Varies by certifying agency and by state. Typically, three years without chemical pesticide and commercial fertilizer applications are needed for certification.

(Access: National Organic Program)

   
P

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PDS Deleted periods between letters Price Date of Shipment, price of a contracted commodity to be determined on date of shipment.
   
Ports of Export Sites for collecting and loading commodities for export.
   
Premium A schedule of allowances over the cash price for a commodity grading higher than the base grade.
   
R
Reseller (Jobber) A person who takes ownership of a commodity and then resells on the open market before physically taking delivery of that commodity.
   
S
Spot Bid Price willing to be paid for a commodity available for immediate delivery.
   
Spot Price Price of a commodity available for immediate delivery.
   
Sub-terminal Takes delivery of grain from both growers and country elevators for storage and distribution. Usually has greater handling facilities than a country elevator.
   
T
Terminal An elevator located at a major point of accumulation and distribution in the movement of commodities. Usually has greater handling facilities than sub-terminal.
   
To-Arrive Price Price of a commodity, including freight and handling charges, delivered destination at a specified time.
   
W

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Warehouse Receipt Ownership certificate for a specific commodity and grade of a commodity stored in a licensed warehouse, elevator, or storage tank.
   

 


 
  Last Modified Date: 03/24/2011