Peter Warren, import director for Ayco Farms Inc. in Pompano Beach, FL, provided some interesting insights about the nature of the Peruvian asparagus deal and the ways in which companies are working through industry challenges.

Ayco sources from all regions in Peru. “We have a base in Trujillo and a base in Ica,” he told The Produce News. “There is a lot of talk about quality being better from the south than the north. That has been the case for the last 29 years. All I can tell you is that a good box of asparagus from either one will be a great box of asparagus. There may be moments when quality or condition can vary. But both are very good. We need to be in all areas to cover volumes for our retail base. It’s more about the grower and the packer.”

Warren said Ayco has been growing its business at 15 percent annually. “What we see now is more vertical integration with our main grower base,” he noted. “It seems we are working harder to grow our normal grower base than in developing new relationships. There will be a lot of pressure on markets as we move forward in this business. There will be rocky roads ahead in the asparagus business.”

He was asked what efficiencies could be addressed on the export side to keep supplies flowing as smoothly as possible. “We have been doing this for over 29 years,” he said. “Dominating logistics, which is 35 percent of the cost to get a box to the United States, is something that the Peruvian industry has not been able to do. We are subject to the whims of the few who offer space. It is not about competition or service. We have very little control of the logistics in terms of getting better prices and better services. One of the biggest challenges we have is when the cargo is un-palletized. The industry has not been documenting the damage that breaking pallets does to the asparagus.”

The word is that El Niño weather patterns affected this year’s Peruvian asparagus crop, and smaller-sized product is expected to move into the United States. “This is a battle with foodservice, and it really is feast or famine,” Warren commented. “When larger sizes get tight, they get stupid tight. If there is asparagus on the menu and you are charging $12 a plate for it, you will find it at any price. Retail still wants standard and mediums. Even within our industry, sizing is an issue. There are four U.S. standards on sizing. The thing is to know and understand your client’s thought process on sizing.”

Warren was asked about pricing dynamics and volatility in the domestic marketplace in light of product sizing. “The problem our industry has is in selling smalls,” he stated. “There is very little interest. People like the smaller spears. But they are more delicate and cause issues for our industry. As an industry, we need to have better sizing. There are still many inconsistencies in the grass sizing as an industry. Moving standard and mediums is the key to retail happiness.”

The crux of the industry’s future, he continued, is for the Peruvian asparagus industry to understand and support retail. “Mexico knows that, when it is in peak, every retailer in America better be on ad, and they are willing to pre-commit 110 percent of their production,” Warren commented. “In Peru, if there is a $2 change in pricing, no one will deliver for ads. They feel zero obligation toward the effort of keeping retail interested. Without ads, we cannot move the volume that is coming from the different growing areas. In a perfect world, all exporters should be forced to give 40 percent of all their production at whatever price is needed to keep prices at $2.99 per pound.”