Lower production costs
China asparagus consumption also relies heavily on tourism and Western restaurants. With a lower cost than most other producers, China can sell at half the cost of Peru and compete in the processed white asparagus market in the United States and Europe. Even with import duties and taxes, Chinese processed white asparagus is still cheaper than Peruvian imports.
As a very labor-intensive product, Mexico and Peru have lower production costs than the United States, giving them a competitive advantage.
Growers can leverage infrastructure and save money through agricultural clusters, sharing packing plants for different seasonal harvests due to vertical integration and shared logistics for transportation and shipping. This has enabled growers in Mexico and Peru to increase yields over the past two decades.
When it comes to freight, Mexico has a 50 percent lower cost than Peru, due to distance and mode of transportation, since Mexico ships by truck and Peru by plane. Peru, however, makes up for the higher shipping cost by getting a higher price on low-season asparagus from August to January.
Some Peru shipments are now traveling by boat, in modified atmosphere compartments. The savings in reduced freight costs is said to be equivalent to 4 tons of extra yield in the field.
California growers that compete with Mexico and Peru say these advantages and free trade agreements have lowered their prices, which is why state production has fallen by 45 percent since 2011, according to USDA data. Yet growers are fighting back through marketing agreements and promotions, hoping patriotism and the locally-grown craze will entice U.S. consumers to pay more for domestically-produced asparagus.
Top Importers
According to United Nations Comtrade international statistics data, the United States and Germany are the world’s top asparagus importers. The United States represents 67 percent of imports valued at just under $716 million for 2016, with Germany accounting for 10 percent at a value at just under $103 million. The United Kingdom and Canada are third and fourth, each representing 7 percent of the import market for 2016.
Measuring the U.S.’s top import suppliers by value, Peru represents 50 percent to Mexico’s 49 percent. Ecuador and Argentina also participate in the market, but in much lower proportion, with under 1 percent each.
In early 2017, Peru’s asparagus exports fell due to volatile weather patterns, including high temperatures and rain. Losses topped $40 million in January and February, representing a 50 percent loss of income, and pushed January prices to $14.23 per kilogram in some markets for green asparagus.
