Mexico, California open dialogue about deals - The Packer

Mexico, California open dialogue about deals

01/27/2012 10:56:00 AM
Jim Offner

With Mexico’s asparagus season reaching year-round proportions, California’s industry is hoping the two don’t collide during the latter’s March-through-May deal.

Mexico can present some strong competition, some shippers say, and the industry is trying to ensure it doesn’t incur any damage as a result of Mexico’s presence.

“Year-round supply has definitely affected all production regions,” said Cherie Watte Angulo, executive director of the El Centro-based California Asparagus Commission.

“The California plan is to receive a competitive price for our product. Mexico has definitely had an impact on the California industry’s transition. We saw an acreage increase in Mexico, while California acreage decreased.”

California’s asparagus industry is whirring to life at the tail end of Mexico’s winter season, so it seems conceivable that the two wouldn’t clash, Watte Angulo said.

“No two years has been the same in my 10 years in this industry,” she said. “Our season now is typically in quantities in March, April and May. By that time, we should be the only production in there. It’s definitely the tail end of Mexico’s season. It has a great deal to do with how much we overlap.”

Opening a dialogue

California’s industry is communicating with its Mexican counterpart in a process Watte Angulo describes as a dialogue, rather than negotiation.

“This industry is — well, fragmented is too strong a word, I guess,” Watte Angulo said. “We had the opportunity to talk about how can we as an industry come together for orderly marketing so we are delivering a consistent quality to the marketplace. And we are talking.”

California and Mexico are competitors, but there are some commonalities that have to be kept in mind by both sides, Watte Angulo said.

“We do represent a different clientele, but we all have a common goal,” she said. “There were times when my counterparts did not talk at all — they were archenemies. But today, they’re working together toward a common goal.”

How fruitful the talks prove to be is anybody’s guess, said Marc Marchini, commission president and a partner in Stockton, Calif.-based A.M. Farms.

“I can’t guarantee they’re going to follow all the precepts,” he said. “Unfortunately, they have extended their season to a typical year-round type of thing, very much like Peru.

“We’re trying to convince them to more fill in the gaps during our season because California can’t supply all the demand. But fill in the gaps, but don’t step on our season by lowballing the price,” he said.

An impact on returns

There’s no denying that Mexican asparagus finds its way to retail shelves during California’s season, and that can weigh down returns to California growers, Watte Angulo said.

“Sometimes at the end of their seasons, they have cold rooms full and they just move it, when we have new product that is of higher quality, in my opinion, and deserved a premium price. ... That Mexican product definitely has an impact on the market, and that’s what we’re trying to address,” she said.

Mission Produce Inc., an Oxnard, Calif.-based grower-shipper, pays attention to Mexican production, and the assessment there is that Mexico’s influence on California’s deal seems minimal, said Cruz Carrera, asparagus operations director.

“It typically comes to an end at the end of March or early April, depending on conditions,” he said. “I guess it really hasn’t had too much of an impact overall.”

James Paul plays for both sides. He’s a salesman for Greg Paul Produce Sales Inc., Stockton, Calif., and Calexico, Calif-based Altar Produce LLC, Calexico, Calif.

“There’s been a lot of complaints out of the growing region in Stockton that the Mexican product has taken them out of business, so to speak,” Paul said. “The reality is, the Mexicans do come in at a different time.”

And, he said, Mexico plays an important role in ensuring that the North American market is supplied.

“You couldn’t grow asparagus in Stockton today,” he said in mid-January. “We had a 29-degree night this week. It’s frozen and the wrong time to grow. We have a different harvesting window.

“There is a small amount of overlap, no question, and that amount of overlap has continued to motivate guys to grow other items. They have the land, resources and money for it; let’s see if they have the stomach to put it in,” he said.

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