Apr 7, 2007Asparagus Growers Prepare for Processing Plant Loss
What’s the state of asparagus in the state of Washington?
It’s hard to pin down, but change is in the air. Washington’s asparagus industry is in a state of flux, with long-term implications for its growers. Next year, they’ll have to change their methods or get out of the business entirely.
The biggest factor has been competition from Peru and the impending loss of the state’s processing industry. After this year’s harvest, the Seneca Foods plant in Dayton, Wash., the world’s largest asparagus processing plant, is closing. The plant canned asparagus for the General Mills Green Giant label, but Seneca lost its customer when General Mills decided to start buying processed asparagus from Peru.
Following the loss of the Del Monte asparagus plant in Toppenish, Wash., in 2003, the loss of the Seneca plant will virtually eliminate the state’s processed asparagus industry. Growers will be forced to sell fresh market or move on to other crops.
Cheap Peruvian asparagus started flooding the market after the establishment of the Andean Trade Preference Act (ATPA) in 1991. ATPA provides preferential trade benefits to four South American countries, including Peru. The act was designed to give Andean growers an alternative to producing drug crops, but it has severely damaged the U.S. asparagus industry.
ATPA is supposed to expire next year. Washington growers hope a new deal in the works, called the Andean Free Trade Agreement (AFTA), will supersede the old deal and put in safeguards that will give them a little more breathing room.
AFTA, however, is not without its own problems. Non-agricultural issues have slowed down negotiations, putting the agreement in limbo, said Alan Schreiber, executive director of the Washington Asparagus Commission.
“If you think CAFTA has problems, wait until you hear about AFTA,” he said, referring to the controversial Central American Free Trade Agreement.
Doug Muse of Muse Farms, a processed asparagus grower for Seneca Foods, hopes any new agreement will keep the Peruvians out of the market for about three months during Washington’s peak harvest season. However, he doesn’t want the Peruvians out permanently. They’re the only ones who can supply asparagus year round, he said.
“They pick 10 months a year down there,” he said. “They don’t need a huge storage and inventory facility. They can pack small amounts for a long time.”
Added to trade benefits and an ideal climate, Peruvian growers have another advantage over their U.S. counterparts: cheap labor.
Washington is especially hard hit by labor costs. By law, the state’s minimum wage rate must adjust to its residents’ cost of living. As a result, labor costs go up every year, while asparagus prices remain the same, Schreiber said.
“Washington has the highest ag labor costs in the Western Hemisphere,” he said. “Asparagus is very labor intensive. It’s tough on the industry.”
Ninety-five percent of Washington asparagus is sold outside the state. About 10 percent is sold outside the country, Schreiber said.
To prepare for the loss of the Seneca plant, state growers are looking for new markets and working to expand the fresh market. Some are plowing out their asparagus fields altogether, Schreiber said.
“Some growers will drop out,” said Dan Holmes, manager of the Washington, Oregon Asparagus Growers Association. “It’s almost a given. They don’t want the hassle of working the fresh market.”
Some contraction in the state’s asparagus industry is inevitable, and has been going on for years, Muse said. His farm in Southeast Washington grows 180 acres of asparagus, all of it processed. He’s been a grower for Green Giant since 1974.
Like many of his fellow growers, Muse will probably reduce his asparagus crop, but he won’t completely abandon it. He grows raspberries, potatoes and sweet corn, but asparagus is still one of his main crops.
“We’re looking for a fresh marketer right now,” he said. “There are some good prospects.”
According to Muse’s estimates, there are about 12,000 acres of asparagus in the state, half of which are used for processing, half for fresh market. In the near term, the state might lose about 3,000 more acres of asparagus, he said.
Jim Middleton, a farmer in Pasco, Wash., grows 220 acres of asparagus, apples and alfalfa hay. About half of his asparagus crop is fresh, the other half processed. He’s going to sell fresh market next year to see how it goes, but he also might sell some for pickling or freezing.
“We’ll be forced to switch if it’s not economical to keep (asparagus) in,” he said. “Any field that’s marginal will be looked at closely.”
In the meantime, he’ll try to reduce costs wherever he can. Middleton and other growers are hoping a government-funded mechanical harvester will be ready in a few years. It has the potential to save growers a bundle in labor costs.
Making the switch from cannery grower to fresh market grower is a tough adjustment. There is always an established price in the cannery market, but the fresh market varies by week, depending on demand. Also, fresh market growers have to cut longer spears, said Holmes of the Washington, Oregon Asparagus Growers Association.
The association represents 30 growers in both states, with about 3,000 acres of asparagus between them. Before all the canneries left, the association would bargain with them on behalf of its growers to get the best prices. Now, the association operates a packing shed for its growers, and tries to make them as much money as possible, Holmes said.
“The future is all fresh market,” he said. “After a couple of years, I think the industry will level out. There’s lots of demand for fresh asparagus.”