Walter Yager, chief executive officer of Alpine Fresh Inc., located in Miami, said it is a simple case of supply and demand this year. More customers are looking for Peruvian asparagus, which is driving up the price. Consequently, he said, the product will be higher priced in U.S. supermarkets and it remains to be seen how U.S. consumers react to that. He said there is plenty of asparagus in Peru if the U.S. consumer will pay the price.
"It's a very good market," agreed Tony Pinto, procurement manager for Harvest Sensations. "Today it’s $20-$21 and Mexico will be out of the deal within the next couple of weeks. We'll see a higher market then."
Two weeks of interviews with Peruvian asparagus importers revealed a consistent theme that echoed the sentiments of Mr. Yager. The importers pointed to a decrease in supplies because Peruvian growers have other crops than they can grow and some have pulled out asparagus acreage in favor of grapes, citrus and avocados. In addition, there are more buyers for the product including importers of fresh product from Europe, Asia and Australia, as well as processors who buy the fresh asparagus for canning or jarring.
Discussing the foreign interest in the commodity, Mr. Yager explained that 10 years ago, European customers could be counted on to take about 10-15 percent of the Peruvian asparagus crop in an average year. "Now they are taking 30 percent," Mr. Yager said. "And several years ago Australia was hardly a blip on the radar. Now they are taking about 30 tons every week."
Mr. Yager said the processing situation has also changed. He revealed that China has lost some asparagus acreage that used to go to processors at the same time that it has increased its own consumption of the product. The result is that there is less Chinese asparagus available for processors throughout the world. This again has increased demand for Peruvian asparagus by that type of customer.
Mr. Yager said many growers in Peru contract part of their crop for the processors as they tend to receive a premium for the product at the beginning of the year as long as they make the commitment. Other growers play the market all year long, gauging one market against the other and diverting their asparagus to the highest bidder. This causes the market price to fluctuate with the grower sometimes getting a far better price for his production and other times having to sell at a price lower than he could have obtained at the beginning of the season.
Leo Rolandelli, president of Jacobs, Malcolm and Burtt, located in San Francisco, lamented the fact that processor demand is affecting the fresh price, and used colorful language in doing so. "There is heavy processing value right now, he said. "That has given the growers pie-in-the-sky ideas on pricing."
He said he was having trouble signing contracts at an agreeable rate.
Rick Durkin, director of business development for Miami-based Crystal Valley Foods, said the changing dynamics are changing the industry. For years, he said, Peruvian growers were very dependent on the U.S. market, which took about 95 percent of their production. They grew for the U.S. fresh market and that was pretty much their only outlet. They have become much more sophisticated marketers and while the United States is still their top buyer, they do have alternatives.
He said the same expansion of alternatives has occurred at the grower level with the development of other fresh crops and accompanying markets. Peruvian avocados have only been imported to the United States in earnest for the past two seasons, but everyone is expecting the Peruvian avocado industry to continue to get larger in the years to come.
Mr. Durkin said the growing areas in Peru are quite similar to those in California in terms of climate and terrain, leading one to believe that the local growers there have many more crops that they can experiment with over the next generation.
But though the supply and demand equation has shifted, virtually every expert expects that there will be promotable supplies as the Peruvian season moves into its peak volume sometime in September. Typically the heavy shipping period lasts through the fall months and well into December. At that time of year as many as 800,000 cartons of Peruvian asparagus per week are shipped into the United States.