Shipments of Peruvian asparagus to the U.S. market are expected to follow the normal pattern of increasing in September with the peak shipping weeks occurring in the October-November time frame.
It was the middle of winter when most importers were asked to discuss the crop by The Produce News, so many used the same caveat as Tracy Wood of Keystone Fruit Marketing’s Southeast Division in Vero Beach, FL, when he said, “It’s just too early to tell.”
But like everyone else, Wood said it is shaping up to be a normal season. The asparagus crop in Peru is grown in several different regions allowing for year-round shipments to the United States. The peak does occur during the October-through-January timeframe. Next in terms of volume would be the next four months, stretching from February through May. June and July are usually light, with August and September serving as swing months. When South America is having a warm winter, or an early spring, late August and the beginning of September can serve as the start of the heavy shipping period.
But typically, and this year appears to be fairly typical, it is not until September that supplies significantly ramp up.
Chris Ramirez, president of Altar Produce Inc. in Calexico, CA, said in late July that the industry numbers on import volume so far were almost exactly the same as the year before. Consequently, he expects 2014 and 2013 to be very similar in terms of weekly volume.
Fabian Zarate of Tambo Sur LLC in Pompano Beach, FL, also made a comment echoed by most in saying, “The Peruvians say [volume] is down, but it looks the same to me.”
Zarate and many others indicated that the discussion about volume is always a suspect one as it behooves the growers to talk about less volume which should mean higher prices.
Over the last several years growers have talked about removing acreage and switching into other crops such as avocados, berries and citrus. And while some of that has occurred, apparently there has also been some investment in new fields keeping asparagus volume fairly steady.
Peter Warren, business development for Ayco Farms Inc. in Miami, FL, talked about the volume in terms of market price, which was still another topic discussed by most importers. He argues that the best way to move asparagus in the United States is with a retail price at $2.99 per pound. He said consumers will buy 10 times the volume at that price compared to what they will purchase at $5.99 per pound.
In fact, he says the best way to kill the market and reduce sales is to have a retail price that is just too high.
The retail price is a reflection of the f.o.b. price, and most importers said the Miami f.o.b. price has to be in the low $20s for retailers to commit to promotions. Virtually all the shippers were predicting promotable price levels by mid-September but many would like to see those prices earlier so that there are no movement gaps in the supply chain, and they can all operate with an orderly marketing price structure.
However, Peruvian asparagus tends to be an f.o.b. Peru commodity, as the growers have several potential markets, not just the United States.
In fact, mid- to late July was one of those periods when the f.o.b. market in Peru spiked, causing the U.S. retail price to rise and U.S. asparagus sales to fall.
Warren said the market rose to an f.o.b. Miami price of $28-$32. That caused high retail prices, no ads and about a $12 drop in the market the following week.
Rodolfo Liau Kang, sourcing manager for Crystal Valley Foods in Miami, FL, said that was an unfortunate situation but expressed optimism that the situation would level off and as volume increases later in the summer, the f.o.b. price will allow for promotions and very good movement. He said growers were reluctant to give out program pricing in August, but he believed that would change when the calendar flipped to September.
Jeff Friedman, sales manager of Carb/America Inc., based in Pompano Beach, FL, agreed that ad pricing is the best way to move Peruvian asparagus. He said a good retail price can move product rapidly and reiterated that the United States is really the only market for Peruvian asparagus that can move volume quickly with a promotion price.