Now that the dust has settled on the holidays and we are firmly entrenched into 2019, my mind has begun to wander to warmer days. I am beginning to yearn for the spring. To me, nothing in the world of produce signals springtime more than fresh asparagus, and as a professional in the produce industry, when I think of asparagus in the springtime, I think of increasing volumes and lowering costs.
During my days at retail, I would also think of ads. And right around this time of year, I would begin to question, "What will the asparagus season bring me this year?" I knew it would break, but when? Asparagus being a volatile commodity, it always seemed like a crapshoot. But now, thanks to The Produce Almanac, what at one time seemed chaotic now makes sense. Let’s take a closer look.
Below is a chart that plots the average weekly FOB cost for 28 lb Mexican asparagus between 2014 and 2018 for weeks 5 through 17, essentially February through April.
When you look at it like that, it makes me feel silly thinking it was all a crapshoot. If I just plan an ad between weeks 7 and 10 leading into mid-March, I should be fine, right? Well, when you look at the actual weekly costs between this time, things don’t look so orderly.
But if you look closely, you will see that, in February, costs start high, drop in March, and then climb again in April. That pattern seems to repeat itself year after year. Costs are also rising—it’s hard to see, but if you eliminate the week-to-week variability and just look at the general tendency over time (we do this by looking at the graph’s slope), we can see that over the five-year time period, costs have increased approximately 14 percent. This is not an alarming amount, as it represents only 2.66 percent compounded annually, which is close to normal inflation.
Now that we know the basic inflation rate and the long-established seasonal variability, it’s not so hard to predict the future of asparagus. I will warn you, however, that there are many unforeseen variables that could toss a wrench into historical seasonal trends. But as those variables are unforeseen, this is the best we’ve got.
So, if you want to plan an ad, you are still best suited to look at weeks 7 through 10 to load product. These are the weeks where asparagus will be selling for $32 or less FOB. Before and after this four-week period costs look to be higher and less conducive to run that aggressive springtime ad.
Mike Mauti is the Managing Partner and Senior Vice President of Execulytics, a consulting firm catering to produce suppliers and independent retailers. With over two decades navigating the Canadian retail scene as a buyer, merchant, and operator, he certainly qualifies as an expert. And with much of that time spent in produce, he has the goods to deliver on his promise to bridge the gap between growers and retailers. Check out www.execulytics.ca to learn more about the company’s signature products: The Produce Almanac, The Retail 101 Seminar and Canadian Intelligence Services.