Because of a variety of reasons, there has been some decline in asparagus acreage in Peru, which leaves Alpine Fresh Inc. believing there is a great opportunity for growth.
“We are looking at some new regions to develop,” said Walter Yager, chief executive officer of the Miami-based grower, shipper, distributor and importer. “The overall acreage is down so we believe Peru offers a great opportunity to add some production.”
The Peruvian asparagus deal for export was first developed about 30 years ago. Consequently, there is some very mature acreage, and in recent years some growers have switched crops as they pulled out acres. There are various economic reasons for this but in the end it has created a shortage of product at times during the season.
Yager said Peruvian asparagus remains in good demand in the United States, and the market has also expanded for the item in other markets around the world, including “Australia, Japan, Korea and even China to a certain extent. These are markets that were non-existent a few years ago, but now they take a little volume. It’s not that much but every little bit helps and increases demand.”
He added that Canada and Europe are also consistent buyers of Peruvian asparagus.
That’s a great thing for Alpine, which has its own production and is involved on the processing side, which also results in increased demand for Peruvian asparagus.
In mid-July, Yager said the typical cyclical nature of the Peruvian asparagus crop was playing out as yields were down because of the cold, winter weather in that South American nation. “In July and August, I believe we will have less volume this year than last but we could make up for it from September to December.”
He said it was a typical supply-demand equation with prices being higher when the supply is down in the U.S. summer and prices dropping when supplies significantly increase in the fall. But for his money, Yager said the fall period tends to be more profitable when the volume is heavy and so are retail promotions and demand. “Right now, you might be getting 50 kilos per hectare and a pretty good market. In October, we can get 200 kilos per hectare. Even if the market is cut in half, we are getting four times the volume.”
He added that simple math tells you the later scenario is better.
Yager expects volume to uptick in mid-August and then really hit its stride as summer turns to fall. Not so coincidentally, that is when U.S. consumers faced with cooling temperatures also turn their attention to cooking vegetables such as asparagus.
As far as transportation is concerned, Yager said there have been no issues getting the vegetable to the United States so far this year. But he said that as volume picks up, air freight capacity could be an issue. Most Peruvian asparagus is air freighted to the United States, especially early in the season when the higher market price justifies the increased freight rate that air shipments represent.
When volume starts humming later in the season, some volume comes by ship both for capacity and economic reasons.