Making the connection every day
Philip Ostrom and his wife Sherry Luna are committed to organic produce. In fact, they are more devoted to providing organic produce to the American consumer than they are to growing crops themselves. They have transformed a small Arizona farm into a large produce distribution business, and now focus on taking other growers’ organic crops to the marketplace.
What they have is a dynamic packer/shipper operation near the Mexican border in Rio Rico, Ariz. New Harvest Organics is becoming known as an organic distributor of specialty crops not only in Arizona, but also throughout the United States and Canada.
They are prime purveyors of mangos, pineapples, limes and hard and soft squash from Mexico, as well as produce from Peru, Costa Rica and Thailand. Some of these commodities are supplied year-round. Still, the basis for the operation are the Arizona apples from the eastern part of the state and citrus from the central part of the state. That’s what got the couple into the business, and still provides a lot of their produce.
Ostrum came to Arizona in 1988 from Minnesota, where he grew crops such as strawberries, rhubarb and pumpkins. He wanted to live in a warm climate, so he started farming here with a small-scale organic sprout operation in Prescott, filling contracts with restaurants, grocers and wholesalers. He moved around the state a bit, at one time also growing mushrooms, but he found that selling small quantities at a time wasn’t economically viable, and he began cultivating distributing relationships with growers overseas—such as tomatoes from Holland and bananas and pineapples from Mexico.
“As we established that model we started looking in other directions,” Ostrom recalls. “There’s not a lot of profit in a crate of sprouts.” He realized he needed to increase his volume beyond what he could grow himself on a small scale, and he turned to the distribution of locally grown produce for small Arizona growers as well.
Another problem was that 20 years ago the market for organic produce—the category he has chosen for health and philosophical reasons—was very small in the state. He began a campaign to educate and supply grocers and consumers, and as that demand grew, his own farming operations fluctuated. At one time he operated a greenhouse operation in Arivaca, then moved it to Sonora, Mexico. That closed last year.
What Ostrom came to realize was that there was a sizeable market for organic fruits and vegetables in Arizona and the U.S., and he began expanding his packing and shipping business to accommodate demand. At first, he established a facility in Nogales, and in 2004, he moved to Rio Rico, just north of Nogales. He built a facility that now boasts 20,000 square feet of space, 7,000 of it packing shed and the rest in warehouse and office space. He now has 40 employees and ships “close to 1 million packages” of produce annually.
Some of the first growers he signed up were in Arizona, and he now packs and ships citrus, apples and peaches grown in the state. He also attempted to find vegetables in the state, but large growers had their own deals, and small growers were selling to farmers’ markets and other local outlets, and there weren’t many operations growing in-between acreages. To make up the volume, Ostrom began reaching out more and more to foreign growers.
“We had partnerships with very good organic growers who had a passion for produce in Sonora,” he says, and it was cost-effective to promote more of those kinds of relationships. Indeed, in some cases, those are actual partnerships. New Harvest Organics shares production costs with some Arizona citrus growers and with several foreign growers. They also import organic pineapples from Costa Rica and mangoes from Peru.
“We also have some investment in machinery,” Ostrom says. The company helps advise growers in other countries, as well as help set up packing operations that meet U.S. standards. The advisers emphasize that growers meet American standards for organic produce, focusing on the use of natural pesticides, for example. Some of the machinery investments are for equipment that can spray specialized organic pesticides.
One of the most recent, and interesting, collaborative ventures has been with the growers of organic Young coconuts in Thailand. Fifteen growers are involved in a project to produce green coconuts that are sweeter and have better-tasting water than other types. Originated last year, the Young coconut program has worked to pack coconuts without the mold that often infects them. It now containers them to the Port of Long Beach, Calif. Ostrom says that this has brought a unique organic product to this country for the first time, and the market is expanding. All of these programs are under the New Harvest Organics label and can be examined, along with their complete line of produce, at www.newharvestorganics.com.
New Harvest Organics utilizes an extensive line of credit to help finance overseas operations, and has also put up collateral and helped bail the growers out of trouble at times. One challenge has been the necessity of dealing with other cultures and growing practices, but that is also part of the attraction for Ostrom. It has become an element of the New Harvest Organics mission that they establish close working relationships with growers in both Arizona and in other countries. They hire experts to provide growing, packing and logistical support to growers. This has meant that he and Luna have had to cultivate skills ranging from agronomics to finance, from information science to pest control methodology.
“A lot of times it really is just finding the information,” he notes. How do you get a carton of coconuts from Thailand to the U.S., for example, or, how do you make sure a grower deep in Mexico will follow American organic certification protocol? They find foreign growers by sending out representatives, and from there they also have to be able to establish trust in both parties.
Ostrom says his company does not encroach on American growers’ territory with imported produce. His company policy is to not import any fruit or vegetable that is being harvested at that same time organically in the U.S. The exception, he says, is Valencia oranges harvested from January to March, which fills a market need for an organic crop that is not being sufficiently produced in the U.S.
Ostrom and Luna have created a business that is one of only “maybe a dozen” packer/shippers or growers’ agents in the country doing this kind of thing. New Harvest Organics now ships to almost every state in the U.S. and every province in Canada, selling to specialty health food stores and large supermarket chains. As more Arizona markets find a place for organic produce, the company expands into those as well.
“A lot of that is the response to more chain stores in Arizona carrying an Arizona organic item,” he says.
New Harvest Organics is enjoying a boost from the current interest in sustainable crops. Ostrom has been committed to that philosophy from the beginning, and as national interest grew, his company was able to grow along with it. The company has been profitable for the last two years, and has progressed so far that he now hosts a one-week tour in Mexico for produce buyers, so they can better understand and solidify those relationships.
His only disappointment is that he can’t spend more time out in the field growing crops. That is changing, however. He recently bought a 10-acre farm in nearby Patagonia, Ariz., and is experimenting with organic vegetable crops such as heirloom tomatoes, zucchini and artichokes, as well as stockpiling compost. He’s happy that he’s able to give other organic growers a market for their crops, but he’s spending more and more time there among his plants, getting away from the packing shed and back to his roots.
Don Dale is a freelance writer and a frequent contributor. He resides in Altadena, Calif.