Parity price

A parity price is used to measure the current price of a product in terms of a baseline average price. The baseline price is derived from a time period that is designated as the starting point for the comparison, such as the preceding ten-year period. If the current price is lower than the parity price and the item being sold is a commodity (such as an agricultural product), it is possible that the federal government will issue subsidies to bring the net price back up to the parity price.