The Worldwide Market for Asparagus
The rise in its global production…
In 1999, the worldwide production of asparagus was estimated at nearly 800,000 tons, which accounts for an increase of 180,000 tons or 28 percent, when compared with 1992. Of this, 45 percent was green asparagus and 55 percent white asparagus. 45 percent of the global industrial production is accounted for by the processing. The major part of it is supposedly made up of white asparagus.
Asia and Oceania has experienced the most tremendous growth during the last couple of years (235,000 t, + 57 %), which also applies to South America (176,000 t, + 120 %), while production in Europe decreased slightly (233,000 t, – 2 %) and in North America more significantly (99,000 t, – 11 %). The difference between these two diverging developments is explained by the most decisive cost factor in the production of asparagus, the different labor costs. One could contend that the cultivation of asparagus moves with the regional development of social conditions.
The importance of the soaring production of asparagus in China and Peru for the German market of fresh produce has by now been negligible. Not the challenge of logistics is the reason this, but rather the local demand for asparagus. This is because the need of Central European consumers for asparagus is limited to the plant’s European season. The supply of even only small amounts of asparagus during the off season, which reaches from August to January, would be sufficient to threaten prices. In October/ November 1999, wholesale selling prices for white asparagus from South Africa stood below 10 DM per kilo for as long as 6 weeks, while for the same period, retailers only able to sell it for a price per kilo that was slightly above the 10 DM. Imports from the southern hemisphere have been at a rather constant 1000 tons since 1999, and provisional data show no significant rise over the last decade. One assumption would be that Germans tend to associate dreary November days with green cabbage, instead of asparagus.
The correlation between canned and fresh asparagus in Germany is also not striking, even though a shrinking demand for canned food and a growing need for fresh produce are supposed to entail some form of intercorrelation. The consumption of canned asparagus during the asparagus season is considerably diminishing in May and June; and other than one might expect, its volume does not increase in July, but keeps falling instead. Not before October, the consumption of canned asparagus is steadily reaching the level it had during the first 4 months of the year.
Thus, the season for asparagus is not very different from that of other canned vegetables. With its 2.50 DM/ kilo, the average purchase price for canned food is particularly low and provides evidence for the fact that the German market is not prone to high-priced canned food. High quality, and thus high-priced, canned food is however the only conceivable replacement for fresh produce.
European Production Remains Constant
In the end, apart from the rather limited import of green asparagus from the United States to Great Britain and Switzerland during off season, the global shifts in the production of vegetables have left no visible impression on the European market for produce. The European market is determined by its domestic production. And this has remained unaltered. Looking at the European Union alone, you could even see a slight decrease. The shrinking production in Spain accounts for this in the first place. But the harvesting output has also been decreasing in France, while Greek and particularly Germany have seen a steady rise in production. Italy (80 percent green asparagus) could also increase its production, and the Netherlands have lost a slight bit of its volume. If you look at the percentages of the growth in Eastern Europe, they might appear as some staggering numbers, but production has so far not exceeded the 5,000 tons mark.
Is Spain too Expensive?
The dropping growth rate of asparagus in Spain is primarily due to the shift of the production of this plant to Peru as its processing in Northern Spain has become too expensive. Meanwhile, the decline in production in Northern Spain could have been stalled, not least thanks to EU subsidies. Contrary to that, the cultivation of asparagus for the market for fresh produce, and here in particular green asparagus, is expanding. White asparagus has also managed to maintain its level of production capacity. In the wake of the flooding in 1998, numerous farming plots in Seville have ceased to exist, but in more early harvesting areas, such as Jaen or Extremadura, the acreage of farming land reserved for asparagus has increased.
France: Consolidation toward the Late 90s
The negative development of growing asparagus in France is frequently associated with the high costs for cutting the plant, while the debate during the early 90s was dominated by the use of insecticides. In 1999, asparagus production in France saw its first year with no regress after a decade of declining rates, but with only 32,000 tons harvested, it cut one-third less than 10 years ago. With 5,540 tons being shipped abroad in 1999, the export reached only one-third of the volume 10 years ago, and since the mid 90s, the import of asparagus to France has outdone its export.
Greece in Trouble
After all, it was the low cost for labor that facilitated the positive development of asparagus production in Greece. On the other hand, long-distant shipping and a lacking domestic market are to be named to draw the entire picture. Towards the late 1990s, both production and transport were consolidated. Approximately 85 percent of all Greek exports arrive in Germany. Most of this volume is sold to the large discount stores. According to Greek authorities, the poor season in 1999 has led to a limitation of acreages for the production of asparagus. Thus, the total farming land has been reduced at about 500 ha and the remaining acreage is being used less intensively.
There may be hard times for Greek asparagus, as with the increasing availability of asparagus in Germany, the German Food Retailing Association (LEH), the organization that distributes Greek goods, is supposed to switch in parts more and more to German goods. To some extent, this also applies to the large discount stores.
The Dutch are seeking to compensate the disadvantages of traditional asparagus regions in Limburg (limited supply of labor, not much acreage) by applying more intensive growing methods. These are, for instance, the attempt to expand the season, to provide excellent quality, and to have better yields. Despite of this, both cultivation and production have slightly slipped. Their target market for exports is Germany; and it shows signs of decline, while the domestic market is stagnating.
Significant Expansion of Acreage in Germany
Both cultivation area and production have risen sharply in Germany during the last decade. Relatively low temperatures in May after 1993 have temporarily prevented the increase in acreage from coming into full force, but the warm June in 1996 has provided a foretaste for things to come in the season of 2000. In 2000, three weeks with warm weather in the wake of Easter guaranteed for an excellent supply, which allowed for an average seasonal increase of 10 percent, despite a relatively poor harvesting result after the mid of May. All major growing regions have expanded their acreage. The massive employment of foils and the switching to sorts that yield higher results has also brought about a larger supply of asparagus. Since then, these imports have not increased anymore, so that it was the domestic production which benefitted from the rising demand. When seen in the long run, prices have described a downward trend.
Consumption of Asparagus on the Rise in Germany Only
A demand analysis comprising several European countries has shown among others that during the last decade the consumption of asparagus in Germany have, with the exemption of fresh white asparagus, seen no significant growth. Consumption also stagnated in the Netherlands, while the French demand has slightly dropped. The average French household has bought 0.82 kg in the second quarter, compared to German households with 2.11 kg. The smaller number of buyers in France accounts for this in the first place. There, only 27.5 percent of all households have bought at least one time fresh asparagus in the second quarter. In comparison, 49.6 percent of all German households purchased asparagus during this time. The average amount per household in France was 3 kg and in Germany 4.2 kg. Only the Swiss buy slightly more per household than the Germans do, but about half of this is green asparagus. The somewhat higher number in Switzerland is due to the greater number of buyers. Purchasing asparagus directly at the producer is an issue only found in Germany. A mere 1 percent of all Swiss consumers make use of this source and France didn’t even mention it. When it comes to asparagus, as compared to other produce, more traditional market places, such as weekly markets or smaller retailers, are attached with more significance in both France and Germany.
Farm-Gate Sale of Asparagus Has Its Limits
The 1999 CMA-led GfK household panel has shown that the overall consumption of fresh asparagus per household in Germany stood at 2.18 kg. Thus, this has outdone the excellent result of the year before at 5 percent. With 1.28 kg per household, German asparagus has been in much better demand than the year before. The rise of 0.10 kg per household against the preceding year corresponds to the growing domestic demand. Of the 1.28 kg German asparagus, 0.56 have been purchased directly at the producer. Looking at the development after 1993, it is apparent that farm-gate sales show no significant deviations. Thus, the share of farm-gate sales is high at times of a shortage of supply of German asparagus (1994: 56 percent) and low at times of an abundant supply (1999: 46 percent). Additional amounts are therefore hard to be sold this way. One exemption may be the Southeastern part of Germany as there exists no area wide opportunities to shop directly at the farms. Since the domestic supply is growing, the sellers need to open up new markets. And indeed, this is apparently already taking place. Asparagus has become ever more present in the food retailing business during the last few years, and during some weeks in 1999 it managed to penetrate 70 percent of the overall business in the consumer market. If the supply continues to grow, producers will be required to enter the discount market, which is a powerful force in Germany. With a share of 20 percent during high season, German asparagus is still very rare in this sector.