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Late September primed for Peruvian asparagus promotions

U.S. importers of Peruvian asparagus were in agreement that promotable volume will hit the retail shelves by late September and good supplies should reign supreme through Thanksgiving and into December.

Mexico’s asparagus shipments were dwindling down as August turned to September with Peru not quite ready to fill the gap. Consequently, the f.o.b. price rose dramatically in a short period of time. Virtually every shippers said by late September/early October prices should drop to the high teens/low $20s with many suppliers offering attractive ad pricing for volume commitments.

“We are expecting good volume and great quality out of Peru, with promotable volume from September to November,” said Walter Yager, chief executive officer of Alpine Fresh, which is headquartered in Miami, FL.

Asparagus He added that seasonally cool weather in both of Peru’s main growing regions slowed down production in August, but weather conditions are typically warmer in September and production picks up.

Several industry members expect more Peruvian asparagus to come to the United States via boat this year because of cheaper pricing. Maria Bermudez, who is the chief financial officer of Advance Customs Brokers & Consulting, in Miami, FL, said her firm anticipates that it will move more asparagus shipments through customs via ship than it has in the past.

“Air freight rates are on the rise,” she said. “It is expected but we are not happy about it,” she said, adding that air freight tend to be the determinant with regard to the air/boat split.   As those rates climb, there is an increase in the use of ocean containers.

Jeff Friedman, president of Carb/Americas Inc., based in Pompano Beach, FL, predicted there would be “significantly more boat containers this year. Right now there are 70-80 containers heading this way.” Typically, an ocean voyage from Peru to Miami takes about 12 days and then add a day on each end for loading and unloading and that’s a 14-day trip. Air shipments, of course, get the product to the United States in a matter of hours rather than days but they are far more expensive. When the price of asparagus is trading at the high end, it is difficult to add an expensive transportation costs as well and still sell it at retail for an attractive price.

However, Don Hassel, vice president of grower relations for Progressive Produce Corp., Los Angeles, said there is one shipping line that is offering a once-a-week voyage of only six days on the water. He expects that will increase boat shipments and allow for a nice compromise: a cheaper-than-air transportation rate and a much-faster-than-normal boat delivery schedule which will yield a fresh product.

Several importers pointed to the increased popularity of value-added packs as growing in the industry. Many shippers have added bagged asparagus in various sizes as well as microwavable tray packs containing various asparagus options such as trimmed spears and tips. Katiana Valdes, director of marketing for Crystal Valley Foods in Miami, expects value-added sales to continue to increase. Echoing sentiments of many, she said: “Part of the value-added appeal is that the asparagus comes in an extended shelf life, microwaveable bag, and sometimes already cut, which makes preparation for the time-starved consumer and/or foodservice operator a breeze.”

Another factor that can impact sales is the U.S. economy and the exchange rate between the Peruvian Sol and the U.S. currency. Tracy Wood, vice president of sales of Seven Seas Florida, said “the strength of the U.S. Dollar and overall economy makes the U.S. an attractive marketplace for many commodities. We see no exception for Peru Asparagus.”

Fabian Sojos, director of sourcing for Farm Direct Supply, which has its headquarters in Los Angeles and has a major office in Miami, agreed. “The exchange rates between the U.S. Dollar and the Peruvian Sol and the Mexican Peso has remained steady for the past few months. With a strong economy, we are seeing strong demand in all segments of the industry, from retail to foodservice and wholesale.”

However, he said the strength of the economy is not always the driving factor. “There are still many times during the year when oversupply is affecting pricing. It is not always easy to balance supply, demand and promotional activity to reach a point of equilibrium,” he said. “Mexico’s production has increased tremendously year over year and the industry has been experiencing oversupply during certain months where even strong demand may not adequately absorb the available supply.”