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- Asparagus Worries:
Low Prices, High Imports
- By Karen Gentry
Associate Editor
- Asparagus acreage is down somewhat this year, although asparagus growers are more worried about prices and processed asparagus coming in from Peru along with competition from Mexico for fresh asparagus.
Asparagus acreage for harvest this year is expected to be 71,400 acres, down 7% from 2000, according to the USDA National Agricultural Statistics Service (NASS). In California, cool, rainy weather in February delayed the start of harvest, but drier conditions during March allowed the crop to progress well with good quality.
Michigan and New Jersey growers reported good conditions for this year’s crop while Washington’s crop is down due to grower concerns over shortages of resources such as water, power and labor, according to NASS reports.
Peru’s impact
Peru has been able to export asparagus to the U.S. duty-free since 1991. Asparagus imports from Peru have increased from that time from four million to 44 million pounds, for a ten-fold increase. Their labor costs are approximately $4 per day for workers while U.S. workers receive $6.50 per hour and more.
Washington relies on hand labor to cut the asparagus. Because of high labor costs, Washington like other producing states has been “feeling the impact of all the imported product,” according to Margaret Webring, director of communications for the Washington Asparagus Commission.
“We don’t see premium prices like we used to at the beginning of spring,” Webring said. She said that Peru now diverts more to the processed market when they see that fresh prices are down. Peru is building processing plants as asparagus growers feel the impact.
Webring said that Peru and Mexico don’t necessarily compete with U.S. producers in season, but have created a year round supply which may have raised the comfort level by consumers with asparagus.
Peruvian growers are aggressively marketing asparagus for processing, displacing Michigan producers. Partly in response to the asparagus from Peru, Michigan asparagus growers sliced their price for processing contracts for a second time this year, this time chopping last year’s price by a third.
California
Prices for asparagus have been disappointing thus far, to say the least, says Cherie Watte, executive director of the California Asparagus Commission. “Prices have not been ideal. Growers have had a real hard time just breaking even,” she said.
She said California had some unusual weather conditions including a cold snap before Easter, which caused asparagus to be late. Record breaking, unseasonably warm weather throughout the asparagus growing season has shortened the season particularly for growers in California’s Central Valley area, according to Watte, who reported 102° temperature on May 31.
“When we came in we came in fast. There was a great deal of product on the market,” Watte said. California ranks first and accounts for more than 40% of the total asparagus production in the United States. More than 95% of California’s asparagus production is for the fresh market. Mexico competes now with California with their time of production.
Washington
The state of Washington is the second largest producer of asparagus in the country behind California. Last year Washington produced 72 million pounds of asparagus on 22,000 acres, Webring said. The state’s acreage will be reduced this year to 21,000 acres, according to the latest ag statistics.
Webring said older fields with poor yields are being taken out of asparagus and not being replaced. Washington had 32,000 acres of asparagus production in the late 1980s. As asparagus needs to be planted on virgin land, growers may switch to another crop. Sixty percent of Washington’s asparagus goes for processing and 40% for the fresh market, according to Webring.
Growers of fresh asparagus have faced a couple of tough years pricewise, she said. Webring said California asparagus affects Washington asparagus. “Stockton (California) is still producing. There’s a lot of product out there,” she said in mid-May. This year’s fresh prices in Washington have started out a little low.
“Processed overall is a declining market,” Webring said. Three major processors are left in Washington - Green Giant, Del Monte and Chiquita Processed Foods - and Webring believes within a couple of years that could be down to two. “The demand for canned asparagus is not increasing,” she said.
Washington’s asparagus season runs from mid-April until the end of June. At the end of April the price for processed asparagus was 56 cents and the fresh prices 45 cents per pound while the average price in 2000 was 48 cents per pound for fresh and 56 cents per pound for processed. By June 1 the price for fresh had risen to 48 cents per pound, although growers were hoping the fresh price would equal the negotiated processing price, according to Webring.
Washington has three growing districts for asparagus - Walla Walla with 4,000 acres, the Columbia Basin with 14,000 acres and Yakima with 7,000 acres.
As the Washington Asparagus Commission does not have a large promotional budget, they promote asparagus with food editor kits and other public relations efforts.
“I think food service is an excellent opportunity for future use of asparagus,” said Webring. She said asparagus is typically used at top-end restaurants but is used more and more in mid-range restaurants.
Washington growers are also concerned about a predicted drought in the Northwest this year. This will not affect harvest this year but could stress the plants during the fern stage of asparagus. The state was hit with extremely hot weather the week before Memorial Day, which affected the quality but didn’t damage the crowns, Webring said.
Although some large asparagus growers in Washington were interested in a reduced assessment, the Washington Asparagus Commission voted to leave its assessment unchanged.
The assessment is set at 4% of gross receipts. “The board did look at it. They felt the time wasn’t right and there wasn’t support to reduce it (assessment),” said Webring.
Michigan
Warm weather in late April caused an earlier start to the harvest season, according to Perry DeKryger, from the Michigan Asparagus Advisory Board. Some growers didn’t yet have a labor crew in place and growers were put “behind the eight-ball” in applying herbicides, DeKryger said.
“The heat caused asparagus to take off and grow faster than normal,” said DeKryger. He said some acres had to be mowed that caused damage to spears. After that spell in April the weather was back to a normal pace. Tremendous rainfall in mid-May in Oceana County caused some ponds to form in some low spots. “There could be some crown loss on some low spots,” DeKryger said.
In a historic move Michigan asparagus growers sliced their price for processing contracts for a second time, this time chopping last year’s price by a third.
The Michigan Asparagus Growers Division of the Michigan Agricultural Cooperative Marketing Association (MACMA) agreed to market asparagus for processing at a minimum of 42 cents per pound, down from 54 cents a pound negotiated in March and last year’s price of 63 cents a pound. The price does not apply to spear-pack asparagus.
Some processors agreed to the March price, which at that time represented the largest single drop for a division base prices that peaked at 67 cents a pound, according to Ken Nye, Michigan Farm Bureau horticultural and forestry specialist.
Both the earlier reduction and this latest cut are results of Michigan farmers not being able to fairly compete against cheap asparagus exported to the United States from Peru and other countries covered under the Andean Trade Preference Act (ATPA), Nye said.
Michigan asparagus growers have traditionally grown asparagus for processing (canned or frozen) - what has been a profitable sector. In the past Peru mostly sold fresh market asparagus in the U.S.
The Michigan Farm Bureau is urging the USDA to buy excess asparagus for USDA domestic feeding programs, which DeKryger considers a short-term fix when you have a couple of years of oversupply. The Farm Bureau is also lobbying for significant modification to ATPA should it be renewed, mainly removing duty-free benefits awarded to Peru.
Growers are also expected to take low-yielding, low-quality asparagus fields out of production to help balance supply.
Michigan grows 17,500 acres of asparagus with traditionally 85% going for the processing market and 15% for the fresh market. DeKryger anticipates a lot more asparagus acreage will be taken out and a bigger shift toward the fresh market. He predicts that 20% of the Michigan asparagus will be for the fresh market as Michigan gradually shifts its production. “We can’t do it all in one or two years. It has to occur over time,” he said about the shift toward fresh.
“There’s been a tremendous decrease in seed planted this year,” he said, resulting in very few acres of crowns planted next year.
“Growers are very discouraged. A lot of fields were not harvested,” DeKryger said. On the positive side, he said prices for fresh asparagus are holding and strengthening a bit. California was hit with a hot spell in early May which kept their volume in check. As of May 25 prices were $28 for a pyramid which is considered a middle of the road price, DeKryger said.
Prices for fresh asparagus in Michigan typically strengthen as the harvest season progresses and less volume comes out of the West Coast. “The fresh market season when it’s done should be respectable,” he said.
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