Low March market picks up in April

04/16/2014 12:01:00 PM
Jim Offner

California Asparagus CommissionCalifornia Asparagus CommissionAmple supplies of asparagus in March had growers worried about low returns for their product, but markets had picked up by early April.Plentiful supplies out of Mexico and a rapidly ramping up deal in California, combined with weather-slowed shipments to markets in the East Coast markets, have asparagus growers and shippers concerned about sagging prices.

“It’s terrible,” said Peter Warren, marketing and sales director for Pompano Beach, Fla.-based Ayco Farms Inc. “We’ve got Mexico doing 1.5 million boxes a week and galloping through the thing. That’s a lot.”

Warren said that likely would remain the case until Mexico started to slow down.

And nobody was sure when that would happen, he said.

That’s just part of this year’s market mosaic, he said.

“Nobody really knows, and we have the Peruvians sharpening their teeth and wanting to get started,” Warren said.

He said the market was “at historic lows.”

 

Market rebound

Prices seemed to back up his contention, at least comparing the 2014 to the previous year.

According to the USDA, pyramid cartons/crates of 28-pound bunched green asparagus from Mexico were priced at $24.75-28.75 f.o.b. for large size and $26.75-30.75 for standard size March 25.

A year earlier, the same product was $28.75-32.75 for large and standard sizes.

Prices in mid-March had fallen into the teens, as increased volume from California was hitting the market at the same time shipments out of Mexico were peaking.

Some California grower-shippers tried to hold back their shipments during the peak flow of the Mexican crop, said Marc Marchini, a partner in Stockton, Calif.-based A.M. Farms and the president of the California Asparagus Commission.

“Mexico is driving prices down and we’re not able to return enough to make it profitable,” he said.

But the Californians could delay their deal only so long, Marchini said.

“Mother Nature obviously wants to get going and so they’re producing,” he said.

Some growers are sending product to the frozen and canning market — a move they generally don’t make until later in the season, Marchini said.

“We’re running into a situation where there’s probably a $15-20 differential in where we can afford to pack it,” he said.

Numerous grower-shippers said the U.S. asparagus market likely will exceed last year’s numbers. According to USDA, in 2013, California shipped 2.9 million 11-pound boxes, primarily in the March-May period; Michigan, 700,000 in May-June; Washington, 955,000, April-June. The total volume of U.S. production was 4.57 million boxes.

Mexico’s year-round shipments totaled 16.16 million boxes a year ago, and Peru shipped 17.30 million boxes. Canada and Ecuador followed, at 336,364 and 27,273, respectively.

The total asparagus volume in the U.S. in 2013 was 38.39 million boxes, USDA reported.

“There are unprecedented numbers, without any interruption in supply the last couple of months,” said Pat Ramirez, West Coast sales manager with Pompano Beach, Fla.-based CarbAmericas Inc.

The flow of product, combined with the weather-hindered logistics, created a depressed market in the late winter, Ramirez said.

That prices have plunged hasn’t come as a surprise, Ramirez said.

“I’ve seen it this way before,” he said.

What he hasn’t seen is the longevity of the sagging market, he said.

“It’s record low, as far as how long the prices have been that way,” he said.

But, Ramirez added, there were signs that the market is headed upward.

 

Easter Promotions

For marketers, Easter is a generally considered a major event for asparagus sales. In 2014, the holiday will come later than usual, April 20.

The holiday will come too late to help Michigan, which is looking at a normal May start to its two-month deal, but it Michigan growers will benefit indirectly, said John Bakker, executive director of the DeWitt-based Michigan Asparagus Advisory Board.

“Third and fourth week in May is usually kind of our peak weeks, and because we don’t have a lot of pressure from outside, we’re enjoying pretty good prices during that period,” Bakker said.

About half of Michigan’s crop goes to the processing market, Bakker said.

As for the market, Bakker said he anticipates prices to be closer to normal than they have been over the winter months.

“With less asparagus on the market, I’m expecting pricing to be close to where it was last year,” he said.

Yakima, Wash.-based Rasmussen Marketing Inc. likely will have product to market around Washington State, but the company is aiming primarily at Mother’s Day promotions, said Sharon Heer, general manager.

“We’re not in any hurry to get into it, with Mexico still in,” Heer said.

She said she expects volumes and prices to be about at normal levels by the time her deal starts to peak in May.

“Our volume should be where they’ve been the last couple of years,” she said.

The late Easter is timed well for Rasmussen this year, Heer said.

“The good news, as far as the holiday is set up, we’ll come off the Easter ad and go back into a strong period for Mothers Day,” she said. “Last year, Easter was early, so for six weeks, you didn’t have a really active ad period.”



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