Supplies of asparagus from Peru have been intensely short in recent months due to poor growing conditions as well as troubles on the logistics side. Floods in the country early this year caused damage to farms and this has resulted in poor yields. Jeff Friedman, of CarbAmericas, said that shipping has also faced high costs due to a lack of available aircraft for transportation.
"Our Peruvian season started back in late July/early August and generally extends to the middle of January," he said. "However, this year has been very tough on growers and we've seen much lower volumes due to damage from storms and terrible floods in the country back in February and March. We are experiencing a decrease in volume of 800,000-900,000 boxes so far YTD from last year to this year. This has been compounded by exceptionally high freight costs due to a lack of available aircraft to ship the asparagus."
Customers looking for consistency
The price of asparagus has spiked in recent weeks as the effects of the supply shortage flowed into the market. Suppliers though, are finding ways to bring supply in and are hoping that they will steady shortly. "The asparagus market has its highs and lows but prices have been very high in the last couple of weeks," said Freidman. "But product from the south is coming in now. Also, growers in Peru have responded by starting to load more boat containers, rather than rely on air transport. Supplies have been boosted which has brought the market down again. Ten days ago, the price for asparagus was $40 F.O.B. Florida, and it has now dropped to $20."
Suppliers and customers prefer a more steady market, but with asparagus this is more difficult, given the sensitive nature of the market price. Friedman explained that retailers need good consistency for their own customers. "Large fluctuations in the market is not a conducive environment for retailers. A decade or so ago, the market was more predictable, but in the last few years it has lost some consistency. Demand, however is still good as producers and suppliers try to manage the flow of product in a way that is more constant."
Peru asparagus industry needs to overcome obstacles
A number of questions have been raised as to where the future of the asparagus industry in Peru is headed. As growers look to more profitable crops, the industry is contemplating on ways to make it more sustainable.
"There are a number of challenges facing the asparagus industry in Peru at the moment," continued Friedman. "First of all, the climate is drying out, and as asparagus is a water intensive crop, this does not fit in well with water conservation measures. Secondly, labor costs are rising steeply. A lot of workers are now moving out of the rural areas and into cities. This creates competition for labor, and as asparagus is also labor-intensive this strikes them harder. The third problem is that these logistic problems, like what happened this year, keep occurring. They really need to come to a more reliable solution in order to bring more confidence into the industry. Because of these issues, a lot of growers are not replanting asparagus and are instead turning to more profitable crops, such as avocados and blueberries. The industry is still strong though and will not go away, however for it to continue growing, these issues need to be sorted out."
