"Today, New Harvest Organics is the largest Arizona-based marketer of organic fruits and vegetables. We market Arizona citrus and apples and Mexican greenhouse tomatoes and field vegetables grown in the desert states of Sonora and Sinaloa. New Harvest has exclusive relationships with small Mexican farms growing over 200 acres of organic tomatoes, squash and cucumbers. In Arizona, New Harvest represents two organic citrus growers with over 1,000 acres in orange, grapefruit and lemon production, and is the exclusive marketing company for three organic apple orchards with over 1,000 acres of combined production. "

• The New Harvest Organics story
• Our philosophy
• Developing market infrastructure
• Profiles of our growers
• Disadvantages to working with marketing agents
• Alternatives to marketing agents
• Conclusion
• Author information
• Additional web resources

Marketing--the very word can make a farmer want to hide in the corn field. While some growers enjoy the challenge of finding the best price for their produce, many others would prefer to leave the day-to-day challenges of selling their product to someone else. Getting product to the market involves a full-time commitment that can drain a farmer's time, financial and personnel resources and creative energy. Furthermore, marketing entails more than just selling fruits and vegetables. Marketing involves identifying a market need and fulfilling that need. It can also involve advertisement, consumer identification and education, packaging development, transportation, billing and debt collection among other things. Growers marketing internationally must address a whole different set of issues, including customs and tariff laws, trade agreements, national standards and other factors. Many farmers, especially those without capital or desire to develop their own marketing team, turn to marketing companies to handle these details.

As marketers of organic fruits and vegetables grown in Arizona and the northern Mexican states of Sonora and Sinaloa, New Harvest Organics, under the direction of the authors, fulfills all of the tasks listed above as well as several others. By virtue of marketing organic produce exclusively, New Harvest Organics has evolved in a specialty market that allows us insight into niche marketing. This article provides an overview of our company and how companies like ours can assist farmers in marketing. Through profiles of New Harvest growers, issues such as crop diversification, specialty crops, and sustainability issues are covered. Finally, we also discuss other modes of marketing available to growers.

The New Harvest Organics Story

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New Harvest Organics began with a young boy who wanted to grow a garden and market his goods to neighbors. When Philip Ostrom was five years old, he would ride his bicycle to the neighborhood hardware store and wait for seeds to fall on the floor from the bulk bin. The store's proprietor allowed Philip to gather these seeds, which he would then rush home and plant. Philip peddled the resulting harvest to his neighbors from his wagon. He went on to co-manage a small family farm in central Minnesota in the early 1980's. His family experimented with organic production techniques for naturally raised livestock, grains and legumes.

In 1988, Philip founded High Country Sprout Farms in Prescott, Arizona. He was soon joined in the business by his wife, Sherry Luna. High Country Sprout Farms produced and distributed sprouted seeds and specialty mushrooms to chain stores, retail markets, and food service companies throughout Arizona and Southern California. We soon realized that this required expensive transportation, and cost-benefit analysis did not support the long hauls necessary to move our product from rural Arizona to larger metropolitan areas. To offset these expenses, we began to haul produce grown by other farmers and eventually branched out to sourcing and delivering a full line of organic produce purchased direct from farmers or out-of-state distributors. As more and more growers learned of these services, that part of our business burgeoned until we were distributing produce grown all over Arizona and even northern Mexico. In 1992, the company was renamed New Harvest Organics and we began to market our produce to the distributors from whom we had previously been purchasing. In 1994, we sold the sprout production part of the business and focused on marketing.

Today, New Harvest Organics is the largest Arizona-based marketer of organic fruits and vegetables. We market Arizona citrus and apples and Mexican greenhouse tomatoes and field vegetables grown in the desert states of Sonora and Sinaloa. New Harvest has exclusive relationships with small Mexican farms growing over 200 acres of organic tomatoes, squash and cucumbers. In Arizona, New Harvest represents two organic citrus growers with over 1,000 acres in orange, grapefruit and lemon production, and is the exclusive marketing company for three organic apple orchards with over 1,000 acres of combined production.

We are also known as "grower's agents." This means that New Harvest represents the grower and is responsible for getting the grower the best price possible. In marketing, brokers are also common. A broker, however, does not necessarily represent the producer but merely negotiates the price between a seller and a buyer. Unlike brokers, New Harvest does not gain a "broker's fee" for each transaction; rather, we negotiate a commission with each grower before the beginning of each season. The fee depends upon the services New Harvest will provide. In the USA, New Harvest typically offers marketing, crop scheduling and planning, packaging under our umbrella label, assistance with organic certification, market projections, transportation from the farm and to the buyer, and consolidation. We also provide, if contracted, "pick-and-pack" advances (that is, money advanced to a grower to cover harvesting and packing costs).

In Mexico, we perform all of these activities and also assist growers with capital to cover planting, fertilization, and other production expenses. We also retain agents on both sides of the US-Mexican border to handle paperwork involved with transborder shipment of agricultural commodities. New Harvest frequently provides technical assistance to Mexican growers, such as researching pest or disease conditions or arranging on-site assistance from organic agriculture advisors.

For all our growers, we provide packaging which is billed back to them when they begin to ship product. This benefits both New Harvest and the grower by creating a brand label that consumers will recognize and buyers will trust. The farmer is also spared the considerable expense of fronting the capital investment to develop artwork and purchase boxes, stickers, plastic wrap or other materials. Large scale purchasing enables New Harvest to take advantage of lower per-unit prices.

New Harvest also performs all billing for the growers, a huge time investment involving not only invoicing but also tracking freight expenses, credits, and collections. If a buyer fails to pay, under United States federal law, the grower ultimately must absorb the loss. However, New Harvest Organics dedicates a great deal of time to verifying a purchaser's creditworthiness and to collecting fees, so we guarantee payment to our growers. Thus, New Harvest shares with the grower the risk involved with farming. If a grower has a bad year, we help to carry them through their losses. If the market is high, we both share in the success.

Our Philosophy

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When we began, we wanted to develop a livelihood from farming that would benefit people and be ecologically and financially sustainable. As our business evolved, we realized that various aspects of it were unsustainable. We could not support ourselves selling sprouts on a small, local level and had to develop a larger market base. To support the expense of selling further afield, we had to increase our product line with items of higher return value. Along the way we met several small producers in the same situation. Deciding to focus our efforts on helping small producers market their product has meant a reexamination of our belief in regionally organized agricultural systems. We still believe that food would ideally be locally grown and marketed, but accept that current realities of population distribution require the transportation of food to metropolitan areas.

The US organic produce market today represents around one percent of the total produce market. Organic produce is still considered a specialty item. In a sparsely populated area such as Arizona, even the few large cities like Phoenix and Tucson cannot absorb the quantity of fruits and vegetables produced by a medium-sized organic farm of 50-250 acres. Moreover, we have been surprised by the relative lack of enthusiasm by Arizona stores to market Arizona-produced fruits and vegetables. We attribute this largely to buyers' lack of awareness of the value of fresh, locally grown produce and to the tendency towards non-regional, centralized buying. The situation requires that we market locally grown produce nationwide and to Canada. Within this context, however, we remain dedicated to working with small family farmers who practice sound ecological stewardship of the land. All of the land in our production schedule is certified by third-party inspectors to be "organic." That means that no chemical fertilizers or pesticides have been used on the soil or crops, and that long-term fertility of the soil is being maintained by optimizing biological activity.

New Harvest Organics is also third-party certified organic as a marketer. While no state or federal agency requires this additional certification, we believe it adds legitimacy to the process of handling organic produce from the field to the distributor. Our certification means the consumer can know our practices meet industry standards for processing, handling and freighting organic produce. From an environmental point of view, freighting produce over large geographic areas is not sustainable; however, in the case of organic growers in under-populated rural areas, it may be the only financially sustainable solution.

Developing Marketing Infrastructure

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As producers and later as marketers in rural Arizona, we faced several challenges in cultivating a market niche for locally produced organic vegetables within an economic system based upon centralized purchasing and distribution centers not easily accessed by small growers:
1) the need to produce larger volumes of product;
2) corporate management policies which discouraged localized sourcing by regional managers, and
3) limited access to consumers knowledgeable about organic produce and willing to spend a premium for locally produced organic foods.
Over the course of six years we have addressed these challenges by developing an infrastructure that attempts to address each issue.

1. In order to supply the volumes required by large purchasing agents, we typically contract with more than one grower of a particular commodity or work with growers who can maintain a certain volume of production throughout a season. Our growers gain the advantage of a marketing umbrella that provides them with market leverage. In order to meet these volumes, however, we frequently defer requests by very small growers to market their produce. This umbrella also allows us to set quality control standards which make our product attractive to large buyers.
2. We have developed a network of transportation and cold storage consolidation points to make our product accessible to centralized purchasing agents. In the organic industry, even some of the largest distributors do not have the capacity to bring their own trucks to Arizona to load produce. In order to make our Arizona and Mexican grown produce attractive to these buyers, New Harvest Organics arranges the delivery of our grower's produce to the buyer's consolidation points.
3. We have developed several strategies to educate consumers and distributors about our products. Our packaging contains information about organic production methods and we also supply stores (through their distributors) with point-of-purchase information brochures on organics and on the growers. We have developed a web site that profiles each of our growers, lists our mission statement and provides information on organic production. We also attend conferences, trade shows and conventions annually in order to meet our buyers face-to-face and exchange ideas for better serving their needs, and to keep abreast of changes in the organic industry.

As a result of these efforts, we are able to achieve the volume necessary to meet the needs of centralized buyers for regional distributors and chain stores. Moreover, by marketing our organic produce over a vast region, we are able to search for the best market price for our growers and can avoid regional market saturation.

Profiles of Our Growers

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Our growers make our distribution system possible. We work to help them develop niches that make their crops more marketable. Our Mexican growers specialize in crops that do not typically compete with crops grown in the USA. The Mexican growing season is generally opposite the US growing season because of climatic differences and Mexico tends to produce summer crops during the US winter season. There is some overlap at the beginning and ending of the seasons, which we try to avoid since organic buyers tend to support more "locally" grown produce or US grown produce. In Arizona, we discourage our growers from summer vegetable production because, in most cases, we cannot return a sustainable price to these small growers who must compete with large corporate farms based on the West Coast.

The following profiles highlight some our growers:

Salvador Parra
Salvador Parra is one of the original organic growers of western Mexico. A third generation grower from Guasave, Sinaloa, his family has been farming in the Sinaloan River Valley since 1951. As he began working on his father's farm in 1971, he initiated experiments with integrated pest management techniques on the family's main crops, which include peppers and cherry tomatoes. The family farm was the laboratory where he developed and refined his theories in organic production that make his farm so successful today. He also blends bio-dynamic practices into his approach.

In 1984, Salvador became the first vegetable grower in Sinaloa to be certified by the European certifier, France Agriculture Biologique. He converted his family's mango groves in Guasave to certified organic status in 1988. Today, his farm consists of three areas: eight acres next to his packing shed include one acre of greenhouses dedicated to cucumber, pepper and tomato production; a 100-acre organic mango orchard with 32 acres for winter squash production; and a 15-acre field north of the packing shed, also planted with six varieties of hard squash. Salvador has worked with some of the largest organic marketing companies in the United States, and we feel fortunate to be able to work with one of the best organic growers farming today in Mexico.

Cocorit Horticola
In the mid-1990's Serge Parre, a Canadian greenhouse grower in Mexico, wanted to find a better way to grow the best-tasting greenhouse tomatoes. After a fortuitous meeting with Philip Ostrom, the two formed a partnership to convert his production techniques from conventional to organic. New Harvest assisted Serge in finding agronomists who could help in the conversion, including a horticulturalist from the University of Arizona specializing in greenhouse production. Using such nutrients as Norwegian sea kelp, seabird guano, and compost teas, Serge now prepares organic mixtures which are applied foliarly and to the plants' root systems, thus creating highly nutritious and delicious tomatoes and European cucumbers. In 1998, Serge added 40 acres of organic field production in Obregon, Mexico to grow organic Roma tomatoes, eggplants, zucchini, cucumbers and pole tomatoes. Along with his new partners, Jose Luis Rubalacava and Jenny Rivera, Serge today spends long hours tending over 180,000 tomato plants and 20,000 European cucumber plants.

The Briggs Family Orchard
Jean and Joe Briggs began farming apples in the fertile Bonita Springs Valley of southern Arizona in 1968, and they've farmed organically since 1990. Their 300-acre apple orchard lies at the base of Mount Graham, a critical "sky island" habitat for many species. Since the early efforts of the Briggs and other committed farmers, organic production has increased in the valley to over 2,000 acres. These farms constitute the largest contiguous block of organic apple production in the United States and create environmentally safe migratory corridors for birds and animals.

The Briggs believe in building organic soil using a nutrient-rich tea made of composted poultry manure and organically derived trace minerals. Codling moths are a challenge, but local growers have had great success with pheromone traps and mating disruption techniques. The granite-rich, alluvial soil and the warm spring temperatures allow early harvest of Gala, Fuji, Granny Smith and Pink Lady(r) apples. This creates a market niche that enables the Briggs to compete with Washington and California growers, as do the number of varieties and quality of apples that they grow. Like Salvador Parra, the Briggs have worked with some of the largest marketers in the organic industry. They now choose to work with New Harvest because we are Arizona-based and extremely attentive to the special needs of Arizona growers.

Summers Citrus
Herman Summers was born not too far from the citrus grove managed in the 1960's by his father. Back then, their grove was miles removed from the small Arizona city of Phoenix. Today, Herman carefully tends those same orange, lemon and grapefruit trees as the booming metropolis creeps ever closer. Since passage of the North American Free Trade Agreement (NAFTA), most small family citrus growers have struggled to remain competitive. Like his pioneering ancestors, however, Herman is not afraid to take chances; since 1992, he has managed his grove organically, using mechanical methods to control weeds and organic-based nutrients for the soil. Herman waters his trees with some of the same ancient irrigation canals used by the Hohokam people. As well as providing sweet, juicy fruit, his trees of Ruby Red Grapefruit, Arizona Sweets, Washington Navels and Valencias offer safe habitat for quail, roadrunners, rabbits and other desert wildlife displaced by the growing city. Here again, climate differences between Arizona and other organic orange-producing states afford this grower a market niche that allows New Harvest to market his product competitively.

Disadvantages to Working with Marketing Agents

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While marketing agents offer advantages to some farmers, every farm is different and there several factors that may offset the benefits of such a relationship. A few problems for organic farmers wanting to market their produce in the USA are:

1. Organic produce prices continue to decline. Historically, one of the ways small organic farms have survived is by commanding higher prices for their product, sometimes 10-50% higher than conventional prices. Today, this premium has fallen, in some cases below conventional prices, due to the increased acreage that large US and international farming concerns have converted to organic production. As the prices fall, many small farmers find they cannot compete with both the large volume production methods of these companies and the lower prices these methods can provide the consumer. Large companies can also absorb below-production costs due to their overall larger volume of production and their product-line diversity.
2. Organic certification may be cost- and time-prohibitive for small growers. Many small farmers find that the additional cost of certification is higher than anticipated. These costs may, but do not always, include the certification process itself, paying for the organic inspector's multiple visits, paying percentages of gross sales to the certifier, and hiring personnel to maintain organic records. If it is the farmer who directly processes the necessary paperwork, the time costs may be overwhelming.
3. Small growers cannot always meet United States Department of Agriculture standards. In the US, any grower or marketer who sells more than 500 pounds of produce across state lines must meet USDA standards for the grade at which they are selling the product. For the best prices, a grade of USDA No. 1 is preferred. Everything not meeting this grade is either culled or given a lower, less valuable, grade. Many small growers either cannot meet USDA No. 1 standards or cannot accept the losses incurred by grading their produce to these standards.
4. Small growers cannot absorb the losses incurred by long freight distances. Again, the economics of scale work against the smaller growers in the area of transportation. While large growers can absorb losses incurred during a two- to five-day transport to market, small growers often cannot.
5. The commissions paid to marketers may be cost-ineffective. Depending upon many factors, growers may find it more cost-effective to market their product directly. If the farm is large enough, a grower may develop his or her own in-house marketing team. If the farm is small, a grower may decide that time spent away from actual farming in order to market the product is a worthwhile cost-savings over a marketer. The grower may also have outlets better suited to direct marketing.

Alternatives to Marketing Agents

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Farmers have long marketed their produce directly to consumers. The most common outlets in the US have been farmstands, farmers' markets, U-picks (that is, fields where customers pick their own produce), grocery stores, food co-ops and restaurants. Increasingly, organic farmers are looking to Producer's Cooperatives and Community Supported Agriculture systems to market their produce. These last two outlets, while affording the grower more pricing autonomy, are also more complicated and challenging, and are discussed below in more detail.

Producer's Cooperatives
In the case of producer's cooperatives, farmers join together to create joint marketing and trucking operations. Grain farmers in the US Midwest have done this for years. By creating their own marketing umbrella, farmers can maintain product uniformity, capitalize on economics-of-scale for marketing leverage and affordable freight, and create a market presence that enables them to compete with large-scale producers. On the other hand, substantial fees must be assessed to each grower to cover the costs of sales, clerical and administrative personnel. Quality standards must be agreed upon and somehow regulated. Personalities and preferences can also play a role in determining the stability of the cooperative.

Community Supported Agriculture (CSA)
Community supported farms are becoming more common throughout the USA. CSAs, as they are called, operate on the principle that everyone is dependent upon a stable food supply and that consumers and farmers should work together to maintain that supply. Consumers, in this system, pay a predetermined membership fee to a grower in order to receive a predetermined amount of fruits, vegetables, flowers and other agreed upon items throughout the growing season. The fee is proportional to the amount needed by the grower to live on and to farm. Some CSAs incorporate volunteer time into their pricing structures. The members typically help the grower to weather losses in an "off" season. Thus, growers are relieved of the burden of financing production from previous season's profits or loans and from having to shoulder the risks of farming. Consumers get high-quality, locally grown produce that often is below market price

Conclusion

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Small farmers have several options when it comes time to market their produce. How they determine their marketing strategy depends upon several factors individual to their specific situation. If a grower decides to go it alone, then such issues as defining a market niche, sales and distribution must be considered. The grower should look at all of the possible venues and should consult with his or her potential customers in order to determine how best to serve that market.

In choosing a marketing agent, the grower must determine if the additional cost of the marketer is exceeded by the profits the marketer will bring. If a grower does decide to use a marketer, the farmer should ask some basic questions: What is the commission charged by the marketer? What services will be supplied? What will happen in a poor market season? What other growing concerns does the marketer represent and do they create a conflict with your objectives? All of these questions should be covered by a contract.

Marketing does not have to mean an uneasy relationship between a marketer and a grower. A marketing agreement can be a cooperative endeavor where the marketer and grower work together to develop strategies that best support the farm. When the marketer is successful, the farmer is too. A marketing company is another tool that a small farmer can use to develop a strong and successful business, to the ultimate benefit of the farmer, marketer, consumers, and community alike.