Glut of Mexican asparagus depresses the market

Glut of Mexican asparagus depresses the marketLarge volumes of Mexican asparagus have driven market prices so low that some California asparagus growers are disking their fields to delay the start of the season rather than picking.

James Paul, director of sales and marketing for Stockton, Calif.-based Greg Paul Produce Sales Inc., blamed the depressed prices on a glut of asparagus coming out of Mexico"s Caborca region. The U.S. Department of Agriculture on Feb. 24 reported 2,108 40,000-pound units of asparagus have crossed at Calexico, Calif., compared to 1,255 40,000-pound units last year at the same time.

Growers in that Caborca, who typically begin picking about mid-January, tried to hold off production on the front end so they could capitalize on this year"s late Easter season, he said.

"But they weren"t really successful," Paul said, adding they only delayed production by about 10 days.

"It seemed to have brought all of the production on at the exact time, so it really doubled it up. We saw a record amount of production coming in from Mexico."

Based on current shipments, Paul said he would expect the large Mexican volumes to continue until March 10-15, then begin to taper.

Don Alford, sales manager for Altar Produce LLC, Calexico, said January temperatures brought the crop on early and strong.

"The weather"s been perfect everything"s been pulled forward, and we"re getting record production because of it," he said.

But Alford described the scenario as a "good thing/bad thing," since the early start also will mean an early end to the deal out of Caborca. As a result, some grower-shippers may not have the volume for the lucrative Easter holiday, which is late this year.

With the high volume also has come lower prices, which Alford described as "ugly."

Because of long-term arrangements and contracts with buyers, Alford said Altar Produce isn"t as susceptible to market price swings as some grower-shippers.

"Our position"s a little different, but it"s been a tough season so far, that"s for sure," he said.

With prices so depressed, Paul said more Mexican volume is coming into warehouses each day than is being shipped.

"When the market is this poor, none of the product is fresh," he said. "They"re not selling product today that was harvested yesterday. They"re selling the product that was harvested last week."

The USDA on Feb. 24 reported 11-pound carton/crates of jumbo Mexican asparagus, crossing the border at Calexico, Calif., and San Luis, Ariz., were $9.75 for jumbos and $11.75 for large. A year ago, those cartons sold for $26.75 for for large and standard in 2012, 11-pound carton/crates of Mexican asparagus were $14.75 for large and standard.

Glut of Mexican asparagus depresses the marketAlthough disking isn"t the most desirable, Barbara Cecchini, who farms west of Stockton, Calif., said she doesn"t want to start off the season in the red.

She planned to disk part of her fields and had hoped to secure a processing contract for the remaining production.

"I don"t care if I make money what I don"t want to do is lose money," Cecchini said. She pointed to the 2013 season, which started out with strong prices that soon dipped.

"I can"t afford to lose money again I won"t start if it"s a losing thing," she said.

Cherie Watte Angulo, executive director of the El Centro-based California Asparagus Commission, said Cecchini was smart to not pick with prices so low.

"This year it"s just horrible a lot of growers are being forced to postpone the start of the harvest," she said. "If the price doesn"t rebound, they will just keep disking.

"They can"t run red ink at the beginning of the season and expect to make it up during the season. Every year we"re playing catch-up, and it"s not an enviable situation."

The increasing competition from Mexican production is the main reason why California"s acreage and production has decreased, Angulo said. Heading into this season, she predicted the state"s growers would harvest about 34 million pounds about what they have the past three years.

That compares to the peak of 94 million pounds in 2000 before the North American Free Trade Agreement eliminated all tariffs on imported asparagus.

"Long-term, we can"t continue to have this problem," Angulo said. "Our growers aren"t going to continue to have asparagus in the fields. It"s not an economically sustainable crop if we have to play this game every single year."

Asparagus is considered a permanent crop, with crowns buried in the soil pushing forth spears during the spring. Disking lops off one crop of spears, but it"s not as gentle on the crowns as having workers selectively cut them, Cecchini said.

Her costs, without any extra packing requirements, are about $25 per 28-pound box, she said. Subtracting out shipping and marketing expenses, Cecchini said she receives about $16 per box.

She said she needs that much to just break even because her labor costs are so much higher than counterparts in Mexico.



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