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A Business Model for Organic Farming

Organic hothouse vegetables are the value-added wave of the future in farming, says 68-year-old Selma businessman Don Chamberlain. His Southern Fresh Produce Initiative sells a turnkey operation designed to fit on one acre.

Initial investment for a turnkey tunnel house operation is about $142,000, says Southern Fresh Produce founder Don Chamberlain (above). He says a farm can net $110,000 in one year.

Initial investment for a turnkey tunnel house operation is about $142,000, says Southern Fresh Produce founder Don Chamberlain (above). He says a farm can net $110,000 in one year.

It’s a chilly 42 degrees outside on a November afternoon, but inside a covered “tunnel house” on New South Organic Farm near Moundville the temperature is in the 70s. The design of the plastic-enclosed tunnel house captures sunlight and retains the heat, thus allowing year-round growing of produce.

The design has worked well for New South Organic Farm, which grew its first crop of organic produce last spring — almost 28,000 pounds of cucumbers — followed by a successful tomato crop in the fall. 

“It’s a controlled environment, and you can easily irrigate and fertilize,” says Russ Lewis Jr., whose family owns the farm. “It’s indoors, but Mother Nature is there, because you still work with the soil, water and the sun.”

New South Organic Farm is among a handful of tunnel house farms that have opened as a result of the Southern Fresh Produce Initiative, a coalition of companies that provides a turnkey approach to developing one-acre farms for growing USDA-certified organic produce. Just as a McDonald’s franchisee buys into a structured program for his or her store, farmers buy into the SFP business model as a consistent way for growing organic vegetables.

Southern Fresh Produce (SFP) was brought together by Don Chamberlain, a 68-year-old Selma businessman with an evangelical passion for farming and growing produce organically indoors. His goal — to have 11,000 one-acre tunnel house farms in operation by 2023.

It’s an ambitious target, since, as of late November, the SFP coalition had contracts with only 11 farms, most of them in Alabama. What’s more, growing organic produce is one thing; finding customers is another. 

Chamberlain, however, is passionate about the challenge. The amount of farmland is shrinking, especially in the western United States, and that opens up opportunities for growers in other regions. In Alabama, farms are disappearing at an alarming rate, and Chamberlain sees that as a huge opportunity for entrepreneurs and traditional farmers to grow USDA-certified organic produce.

“Let me put this in perspective,” he says. “Most of the produce sold in Alabama comes from California and Mexico. California took as much as 800,000 acres of farmland off the table this year because they don’t have the water to support their agriculture. So, if we have 11,000 one-acre farms, we’re not even scratching the surface as far as vegetable demand vs. supply goes in this area.”

The market for organic produce and food products is huge and growing. Industry analysts estimate U.S. organic food sales were $28 billion in 2014, and the industry is growing at about 14 percent a year. “There is growing demand for organic produce, and that’s the game changer,” Chamberlain says. “Our growers can get top dollar for what they grow because it’s healthier, it’s fresher and it tastes better.”

Chamberlain cites New South Organic Farm as an example of what tunnel-house farming can do. The farm’s growing area is almost four-fifths of an acre under roof and consists of four interconnected, plastic-covered bays that are each 28 feet wide and 300 feet long. The initial investment was $142,000 to build the tunnel house from scratch, and Chamberlain estimates the farm will net almost $110,000 in 2015. 

New South Organic Farm had been in operation for only six months as of November, but Lewis projects a relaxed optimism about its prospects. “We’ve done the cucumbers and tomatoes,” he says. “We’ve done zucchini, okra, kale, and we we’re going to do some lettuce next year. This was our first year, and we didn’t want to try too much, but next year (2015) we’ll have a wider variety of items. So far, Whole Foods has been our largest customer, but we’re looking at several other opportunities.”

Without citing specific sales figures, Lewis says, “I think we’ll do well, pretty good for a first year. The year’s not over, but it’s looking good.”

New South Organic Farm is part of a larger cattle and hay farm that has been in Lewis’ family since the 1950s. “What we’re doing with the organic produce is just another avenue for us,” Lewis says. “We think organics is the route America’s going to, and we thought we would jump on it and take advantage of the opportunity. And I’d rather work for myself and keep farming. That’s what my family has been doing.” 

The feeling is similar at Sterling Valley Farm in Northport, which began growing organic produce through Chamberlain’s SFP coalition last fall. Sterling Valley Farm was established in 1821 and has been in Celeste Campbell Hagler’s family since 1899. “We were looking for ways to utilize this property, which has been passed down through the generations,” Hagler says.

“We’ve got several hundred acres, and we’ve currently got 35 enrolled in the organic program, but we can expand that if we want to. We were looking for something different, something innovative, something for the younger generation, and this looked like a great fit.

“We’re doing this as an investment, but we’re also doing it from the heart,” she says. “We don’t want to see this farm become a subdivision.” 

Hagler’s 27-year-old son, Kent, manages the organic production, which makes him a fifth-generation farmer. “We think this is going to catch on sooner or later, and I think it’s going to be sooner,” he says.

Chamberlain and others say that time is on their side. Gerber, for example, continues to expand its line of organic baby food, and who knows what other new products or demand might be created because of the nutritional value of organic produce? 

Also, world demand for food will double between now and 2050 and, “We aren’t going to meet that demand at the rate we’re going,” says Alabama Agriculture Commissioner John McMillan.

“There’s definitely, and I think really definitely, an opportunity and room for growth for this kind of produce being grown in tunnel houses and other greenhouse-type facilities. There are all sorts of things going on. This isn’t a get-rich-quick scheme, but it offers all kinds of opportunity.

“Whether (SFP) will have 11,000 units depends on how everything else goes between now and 2023,” McMillan says, “but I don’t think it’s beyond considering as a goal. If things come together, and we (in agriculture and Alabama) do what needs to be done, the sky’s the limit, I think, for the next 40 years. I think we’re entering a golden age of agriculture.”

Southern Fresh Produce, Chamberlain says, is on nothing less than a mission to bring back farming and the income and job-creation that go with it. And for him, it’s personal.

During his long career, Chamberlain made four unsuccessful bids for Congress, the last one in 2012. His campaign platform for Congress was the same as his goals with Southern Fresh Produce — creating wealth in Alabama’s rural areas by building tunnel-house farms. So does he intend to go down swinging?

“Absolutely,” he says. “That’s what I’m doing. I’m out to prove that I was right about all of this. We’re out to bring back agriculture, and we’re doing it one acre at a time.”

Charlie Ingram and Cary Norton are freelancers for Business Alabama. Both are based in Birmingham.    

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