Walter Yager, CEO of the Miami company, said the 10 percent tariff imposed by the U.S. government on imports from Peru is just another cost that puts the asparagus at a competitive disadvantage against other production areas, most notably Mexico. The longtime asparagus importer reminded that the “market is the market” determined by supply and demand not the affiliated costs of bringing the product to U.S. consumers. He did say that increasing costs, such as the new tariff, can increase the product cost in the long run as they do impact profitability, which impacts supply and ultimately alters the supply/demand situation.

But on any specific load in any specific time period, the 10 percent tariff just can’t be tacked on to the sales price, he said.

Yet Yager remains bullish on the future of the Peruvian asparagus deal, and fresh asparagus in general. He said acreage has declined in Peru over the last handful of years because of rising costs, which the tariff can only exacerbate. “But long term, they (Peruvian asparagus growers and exporters) will stop their decline,” he predicted. “Peru is a great place to grow asparagus. We are increasing our imports from both Peru and Mexico.”

He reasoned that cost efficiencies along the supply chain and volume adjustments will put the retail price at a point where the growers can make money and consumers will grow the category.  “It’s Economics 101,” Yager said. “The market will find the right level.”

Currently, he estimated that a retail price of $2.99 per pound is what is needed to stimulate demand and move more volume.

Yager said the elimination of non-market, regulatory costs will also go a long way to improving the profitability and the quality of Peruvian asparagus in the U.S. market. For decades, the U.S. Department of Agriculture has required Peruvian asparagus to be fumigated before it is marketed in the United States. Typically, the fumigation process occurs at point of entry. This is another added cost that also adversely impacts the quality and shelf life of the asparagus spears.

The U.S.-based Peruvian Asparagus Importers Association has long argued that this is an unnecessary step with other USDA-approved pest prevention safeguards, such as a systems approach, available as an alternative.

Last year, the USDA did begin approving a similar approach for Chilean grapes. PAIA members were encouraged to believe that the same rationale would soon be applied to Peruvian asparagus. Yager, who has personally been advocating for the systems approach for many, many years, has discerned no new movement by USDA in this direction. “That would be very helpful,” he said.

Returning his attention to the current marketing season, the Alpine Fresh CEO said it has been a good year so far for the Peruvian commodity. “The volume is up 23 percent this year,” he said, noting that it is largely because of lack of demand in the processing market, which is typically a big factor in Peru.

He said that the mid-August FOB price on Peruvian asparagus was very high (in the mid-$30s) because total asparagus is in a seasonal low spot. “We will see the market go to where it needs to be (to stimulate sales) in mid-September,” he predicted. “Peru is in its normal cycle. Over the next three to four weeks, we should see supplies increase and there should be good volume for promotions in October through Thanksgiving.”

New to the Alpine Fresh lineup of asparagus presentation options for retailers is the use of compostable packaging for its asparagus. He noted that the packaging is more expensive but it is attractive to both retailers and consumers who are looking for more environmentally friendly options.