Mar 13, 2006

Michigan industry looks at 59-cent asparagus price

By Dick Lehnert, Assistant Editor

Honee Bear Canning Co., Lawton, Mich., announced March 10 that it will sign contracts to buy Michigan asparagus for 59 cents a pound (on a delayed price basis) or 57 cents a pound cash on delivery. By the end of the day, other handlers agreed to follow Honee Bear’s lead.

The announcement came during the Asparagus Summit – a preseason industry meeting in Rothbury, Mich., during which growers and handlers compared notes on what’s ahead for the season. The word from Honee Bear was greeted enthusiastically because last year Honee Bear refused to negotiate with growers in what Ken Nye called “a season of turmoil.”

Nye is manager of the asparagus division of Michigan Agricultural Cooperative Marketing Association (MACMA), which represents most Michigan asparagus growers. They are organized to bargain for price under Michigan’s marketing and bargaining law. Handlers may opt out of the bargaining process, as Honee Bear did last year, but may not purchase from MACMA members if they opt out.

Nye said the price was “a good deal, not the highest price, but a lot better than the turmoil of last year.”

In his short report on the state of the industry, Honee Bear president Ron Armstrong said “U.S. retailers want us processors to keep you (American growers) healthy. Ten years ago, they could have cared less. But they are sick and tired of not getting supply from the global network and of the false promises from China and Peru. The number one concern at Wal-Mart is never running out of stock.

“I’m extremely happy with how things are going. It looks good in the short term.”

In 2005, early-season frost and followed by heat and dryness led to the worst Michigan asparagus crop in 24 years, about 70 of normal production of 24 million pounds. But this failed to translate into better prices for producers. Michigan growers received prices around 45 to 50 cents a pound, down 20 to 25 percent from 2004.

Low production last year helped set the stage for optimism that 2006 can lead to a larger pack and higher prices at the same time.