No. 46, Fall/Winter 1999
Tools for Small Farmers
By Sherry Luna and Phil Ostrom
"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. " |
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(Back to top) 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. |
Thumbnail link to image of organic peach trees in Arizona, ~21K |
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(Back to top) 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(Back to top)
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(Back to top) The following profiles highlight some our growers: |
Thumbnail link to image of Mr. Parra in his orchard, ~21K |
Salvador Parra 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. |
Thumbnail link to image of Mr. Parre and partner checking crops, ~13K |
Cocorit Horticola |
Thumbnail link to image of Mr. and Mrs. Briggs in their orchard, ~16K |
The Briggs Family Orchard 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 Disadvantages to Working with Marketing Agents(Back to top)
Alternatives to Marketing Agents(Back to top)
Conclusion(Back to top) 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. |
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Sherry Luna and Phil Ostrom are co-owners of New Harvest Organics. You can reach them for comment as follows:
New Harvest Organics
P.O. Box 148
Patagonia AZ 85624
USA
Email: sherry@newharvestorganics.com or philip@newharvestorganics.com
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New Harvest Organics
http://www.newharvestorganics.com/
As stated in the article above, this web site includes information on the company, its commitment, its growers, seasonal availability of its products, and more.
Resources for Organic Marketing
http://www.attra.org/attra-pub/markres.html
For farmers within the USA, these pages from Appropriate Technology Transfer for Rural Areas (ATTRA) provide a useful starting point for finding buyers for their produce.
Organic Trade Association
http://www.ota.com/
The Organic Trade Association (OTA) is a national association representing the organic industry in Canada, the United States and Mexico. Members include growers, shippers, processors, certifiers,farmer associations, brokers, consultants, distributors and retailers.
International Federation of Organic Agriculture Movements (IFOAM)
http://www.ifoam.org/
IFOAM represents the worldwide movement of organic agriculture and provides a platform for global exchange and cooperation.
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