For Peter Warren, business development for Ayco Farms Inc. in Pompano Beach, FL, the Peruvian asparagus deal can be boiled down to a simple equation: a good f.o.b. price equals retail promotions, which equals good sales.

“You can sell 10 times more product [at retail] if the price is $2.99 than if it is $5.99,” he stated.

More than most items, he said asparagus is price-sensitive and reacts very favorably to promotions and promotion pricing. Consequently, he gets frustrated when the price drifts higher and promotions dry up.

“At any given time, 30 percent of the retailers in the United States should be promoting asparagus,” he said, indicating that would keep volume moving and actually create a much better marketing situation for Peruvian growers.

Unfortunately, he said “the model we have in Peru is a little different and doesn’t work that way.”

Warren explained that most Peruvian growers — especially when supplies are not abundant — work on a firm f.o.b. Peru basis and don’t like giving program pricing out too far in advance. However, the market in the United States can react very quickly to the law of supply and demand, and significant price drops are not uncommon.

Just such a scenario was playing out when Warren and the other importers of Peruvian asparagus were being interviewed for this section in late July.

July, which is in the middle of Peru’s winter, is typically a low-supply period. Volume starts to ramp up in August and typically hits its peak in September and October. Warren said there were some good retail promotions in early July that were helping to move the product. By the middle week of the month, the f.o.b. price started to climb.

“Last week, the market was up at $28 to $32,” Warren said July 24. “That’s too high and ads were cancelled. This week we hit a virtual wall with no demand and the market fell $12 to $14.”

While that created an out-of-whack supply-and-demand situation, Warren was hopeful that it would straighten out within a couple of weeks and by the time this article was to be published in mid-August, the marketing situation would be much improved.

When this happens, he said the challenge is to get a grower to give ad pricing for a couple of weeks in the future to create a spot-market price that can then be followed. “Nobody wants to go first,” he said.

Despite the July marketing challenges, Warren was optimistic that a good season would follow. He said the days of year-to-year double-digit sales growth are over but steady growth is still possible. He expects volume from Peru to be up a bit this year and for U.S. retailers to incrementally increase their sales of the product.

Though one-pound packs of green asparagus dominate the sales ledger, Warren said there is increased interest in value-added offerings and the creation of new packs, such as asparagus tips, does help generate interest in the category. He added that retailers should carry all three colors — green, white and purple — to increase their own sales.

New for Ayco is the opening of an asparagus-specific cold-storage room in Miami.

“It’s the best holding room in South Florida,” he said. “We can hold the asparagus at 33-35 degrees with 99 percent humidity. That can give us five to six more days of shelf life.”

The room will hold up to 60,000 cases of grass.

The company has also added an asparagus deal in the state of Guanajuato in central Mexico. Warren said Mexican producers in that area have far less production per hectare than the growers achieve in Peru, but it gives the firm some flexibility to service its retail customers in the Midwest and West. Peru remains the firm’s main supplier of grass.