The asparagus market has done a 180-degree turn in a couple of weeks.
Asparagus had traded above $40 per 11-pound crate in late September, but soft demand and improving supply from Peru and Mexico saw the market tumble below to less than $20 per carton on Oct. 10.
“You go from a $40 market to an $18 market and no ads are in place and all of a sudden you have got oversupply,” said Jeff Friedman, president of Carb Americas, Fort Lauderdale, Fla.
While lower prices may spark retail promotions, Friedman said it may take a couple of weeks to see the effect of those ads.
“There are no issues on availability right now,” said Robert Penna, account manager for Alpine Fresh Inc., Miami. General market conditions were about $17 per 11-pound carton for Baja, Mexico, asparagus and $18-$19 per carton for Peruvian asparagus, he said.
While season-to-date supply from Peru has been tight compared with a year ago, Penna said exporters are now shipping normal volumes to the U.S.
“You have Peru and Mexico firing on all cylinders, so at this point there is probably more availability than demand,” Penna said.
Generally, Friedman said volume from Peru starts in May and continue through the middle of January, at which point there will be heavier imports of Mexican asparagus from Caborca and central Mexico in the winter and summer.
This year, imports of Peruvian asparagus have been down compared with year-ago levels because extreme weather conditions earlier in the year took a toll on yields. Friedman estimated that season-to-date volume from Peru is off 800,000 to 1 million boxes compared with a year ago. Through Sept. 30, the U.S. Department of Agriculture reported that total imports of Peruvian asparagus totals 6.01 million 11-pound cartons, off from 7.35 million cartons at the same time a year ago. The U.S. receives about 70% of Peru’s fresh asparagus exports, followed by European destinations.
Year-to-date Mexican asparagus shipments to the U.S. were 5.8 million cartons through Sept. 30, up 7% from the same time last year.
Waiting for retail pull
Soft demand, evidence of a lack of retail ads for asparagus, caused some shippers to sell product for as low as $13 to $16 per carton the week of Oct. 9.
“When the market was $40, nobody is putting anybody on ads, retail was high and you are not giving any advance pricing out,” Friedman said. “When the market did crash, retail was still at $5.99 per pound and they’re not moving any volume,” he said. Air freight costs were also up.
“This is what happens when nobody goes on ad,” he said.
For the week of Oct. 6, the USDA’s retail report showed that 1,173 supermarket stores were promoting asparagus at an average promoted price of $3.43 per pound. That compares with 3,094 stores promoting asparagus at the same time last year at an average promoted price of $2.92 per pound.