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- Asparagus Growers Slice Minimum Price
A marketing committee representing the vast majority of Michigan asparagus growers has agreed to cut its per-pound minimum base price for processing contracts by nine cents in order to compete against cheap foreign imports.
The Michigan Asparagus Growers Division of MACMA will now market asparagus for processing at a minimum of 54 cents per pound, down from 63 cents a pound last year. About 10 processors are currently evaluating the recommended price and must decide whether or not to accept the base offer and extend purchase contracts.
The nine cent price reduction - the largest single drop for a division base price that peaked at 67 cents a pound - represents a sign of the times for the industry, said Ken Nye, Michigan Farm Bureau’s horticultural and forestry specialist.
Michigan leads the nation in the production of asparagus for processing and is third behind California and Washington for fresh-market asparagus production. However, in the last 12-18 months Peru and other countries have stepped up their exports of processed asparagus to the United States.
With Michigan’s annual average of about 25 million pounds of asparagus for processing, total production is small enough that even a tiny amount of competition “makes a difference,” Nye said. He said several million pounds of Michigan asparagus were not harvested last year or unutilized because of competition from imports.
“With the market for processed asparagus not growing much in recent years, the Michigan Asparagus Growers recognize they need to be competitive with imports,” Nye said. “The industry is committed to maintaining our shelf space for Michigan product, and our growers want to deliver all the asparagus that we grow. To make sure that happens, the committee felt we needed to reduce the base price this year.”
The price decision will likely cause marginal and poor-producing fields to go out of production this fall, according to Dick Walsworth, chairman of the Asparagus Marketing Committee within MACMA.
“We’ve taken a real crunch on prices in the last couple seasons, and the answer is to draw a line in the sand,” he said. “Producers are willing to take a major price hit to help processors retain their markets. We think this number will allow them to meet the competition and retain our markets.”
Nye added, “I think the industry feels fairly certain that fields with good productive capacity will be viable and growers will have some opportunity for profit even at the lower prices,” he said.
This price drop for processing asparagus should also encourage more farmers to consider opportunities for fresh-market asparagus - a developing market in Michigan and the fastest growing sector of the asparagus industry.
“In the long run it would probably be beneficial to our Michigan industry to develop the fresh market as much as we can because there is demand out there for fresh asparagus,” he said.
The MACMA division now also will market spear-pack asparagus at a minimum base price of 64 cents a pound. Prior, asparagus grown for spear-pack (canned or frozen entire asparagus spears versus tips and cuts) sold for about a dime more per pound but did not carry a base price.
Nye said growers decided to set a base price for spear-pack asparagus to reflect the historically higher prices paid for the crop, which is more labor intensive to harvest and handle.
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