Michigan’s Newly Profitable Asparagus Alley
Along Lake Michigan, growers fill expanding fresh market
May 22, 2005 | By Patty Cantrell
Great Lakes Bulletin News Service
Growers credit the Granholm administration’s “Select Michigan” promotion program with sharply increasing the market for Michigan-grown fresh asparagus.
HART, MI — Todd and Sarah Greiner know what they want, and they’re showing some 350 other asparagus farms in Michigan how to get it.
The Greiners, young and enterprising, are natives of the Hart area who came home from college to live in the country and open Todd Greiner Farms, Inc., where they focus on growing and packing asparagus for fresh produce markets. This harvest season, which began earlier this month and ends in late June, the Greiners will double the number of growers whose asparagus they’ll pack — 30 including their own farm — and the amount of asparagus they’ll market — 1.5 million pounds. They also built a second packing facility this year to keep up with demand that is now outstripping Michigan’s fresh market supply because of the hard work that growers like the Greiners have put into weaning the industry from total dependence on bulk sales for canned and frozen asparagus.
Todd and Sarah Greiner are at the vanguard of this new and fast-growing wing of Michigan’s asparagus industry, which promises to keep the state’s 15,000 acres of asparagus farms in business over the long haul. Traditionally 95 percent of Michigan’s 25 million pounds of asparagus went into canned or frozen products. Those traditional markets are extremely risky now, however, because so much asparagus is coming in from other countries that the final price back to farmers can often be well below their costs to produce the crop. The industry’s new wing is focused on marketing fresh asparagus and growing those markets along with the increasing consumer demand for the fat-free, no cholesterol, low-calorie, nutrient-rich vegetable.
Americans are steadily catching on to tasty asparagus; per capita consumption has increased to more than one pound annually, almost double what it was a decade ago. The Greiner’s own and operate one of three new asparagus packing facilities that have popped up since the industry’s new fresh-marketing focus started. These investments and an infectious air of hopefulness in the loamy farm country along Lake Michigan, between Muskegon and Ludington, where most of Michigan’s asparagus is grown, is a far cry from just a few years ago when global market realities dawned.
But Michigan growers, who sell nearly $20 million worth of asparagus annually, also owe their rising fortunes to two government-sponsored programs that reshaped their market.
The first was Select Michigan the Granholm administration’s well-designed state farm product promotion program, which growers here credit with sharply increasing the market for Michigan-grown fresh asparagus.
The second was the unanticipated outcomes of a United States trade agreement with Peru, which was enacted by the first Bush administration in 1991 to encourage Andean farmers to replace coca planting with asparagus that could be shipped to the United States duty-free. Though asparagus farmers complain that the agreement flooded the United States market, and drove down prices, they also note that many more Americans gained a taste for asparagus.
Peru and the Growing Enchantment With Asparagus
The market for fresh asparagus is especially strong. Last year, the Greiners and other Michigan growers sold 2.5 million pounds of fresh asparagus, a 25 percent increase from 2003. The industry anticipates selling 5 million pounds of fresh asparagus in 2005.
In effect, Michigan’s asparagus growers turned a potential for economic ruin into a profitable opportunity for new products and more efficient farm and marketing practices. It’s amazing, really, that a part of this story has to do with how the United States’ war on drugs affected a sleepy industry on Michigan’s west side. In an effort to lure Andean farmers away from coca leaf and heroine poppy production, the United States gave Peru’s fledgling asparagus industry duty-free access in 1991 to American markets and a boost of foreign investment. The assistance came, American farmers quickly pointed out, despite the fact that coca leaf and heroine poppy do not grow in regions suitable for asparagus production.
The resulting flood of asparagus from Peru, which in 2001 and 2002 devastated U.S. asparagus growers, was a market shock that still is hurting Michigan’s asparagus industry, the nation’s third largest. But in the nosedive, entrepreneurial growers woke up to their true competitive edge: Close proximity to more than half the population of the U.S. and Canada.
Just four years after the Peruvian asparagus tsunami, Michigan’s industry has fundamentally transformed itself. The vast majority of its sales are still in canned and frozen asparagus markets, where Peru’s shiploads are still depressing prices. But the new, fresh-market wing of the industry expects to double sales this year, after impressive gains in 2004.
The Peruvian disaster is not new in farm country, even though the drug war connection gives it a peculiar twist. Apple growers, cherry growers, corn and soybean farms — all are watching overproduction at home and abroad depress crop prices to bankrupting levels. The race to the price bottom, in turn, affects rural communities across Michigan, where farm jobs and open farmland underpin local economies and quality of life.
From 1982 to 1997, the state lost more than 1 million acres of farmland, a drop of nearly 10 percent, and one of the fastest rates of farmland conversion in the nation. Michigan State University forecasters say the state could lose 1.5 million more acres of farmland over the next generation.
Retooling For The Future
The asparagus industry, however, is showing the rest of Michigan’s farms how to turn that situation around by moving into the 21st century with a new entrepreneurial drive. Michigan’s asparagus growers have learned to
trade on local flavor and freshness. They’ve been helped by the state’s Select Michigan program, which provides colorful and creative marketing in the Grand Rapids and Detroit areas. In 2003, their first year of working with Select Michigan, asparagus growers increased sales in Grand Rapids by 65 percent and kept the price per case 27 percent above California and Ontario competitors.
Another factor is the market savvy and long-term commitments that the Michigan asparagus industry has put into proving to retail buyers that they can deliver required quality and quantities. This kind of reliability in fresh markets is essential to future growth. As fuel prices rise, for example, fresh asparagus sellers are looking forward to significant cost advantages over west coast suppliers in Great Lakes markets and beyond.
“We haven’t even touched the East Coast,” said Mr. Greiner of the possibility of moving fresh Michigan asparagus past current sales, concentrated in Grand Rapids, Detroit, and Chicago. Growers like Mr. Greiner are also excited about the potential of new products now in development, such as microwaveable bags of fresh asparagus.
Evidence that times are changing abound, including the fact that more and more growers are talking about things like the “cold chain” and other concepts that are key to fresh markets but were previously foreign to many.
Cooling asparagus at harvest, and keeping it cool through packing and shipping is of utmost priority for supplying fresh produce markets. Color, crunch, and quality taste are top selling points, particularly for distinguishing Michigan asparagus from spears that have traveled thousands of miles farther to market. Any slip-up in the cold chain can damage the whole load.
“The ‘cold chain.’ That’s becoming a household word now in the asparagus industry,” Mr. Greiner said.
The fact that so many in the industry now know and care about the cold chain is a result of new commitments to marketing fresh asparagus. It’s also due to strong profits coming back to those growers that have stepped out of the industry’s traditional comfort zone and are proving to retailers that they can deliver.
“We had a big disadvantage going in,” said John Bakker, executive director of the Michigan Asparagus Advisory Board. “Michigan producers, as an industry, were perceived as unreliable suppliers for the fresh market. We had a huge image problem to overcome.”
Too many retailer buyers had been burned in the past by Michigan growers that did not fulfill orders because they had little incentive to work hard for those sales. Asparagus growers shied away from marketing asparagus fresh because it was trickier handling delicate fresh-market spears and easier to do what they’d always done: Sell bulk loads to one or two big processors.
Before the Peruvian asparagus disaster, most Michigan growers were content to let California and other states dominate the fresh market segment. Asparagus, though, is the fastest-growing item in vegetable markets. Nearly all of America’s newfound love of asparagus is for the fresh kind — perfect for grilling, marinating, and stir-frying or simply eating raw.
Tom Oomen who with his brother Rick farms more than 1,000 acres of asparagus and other vegetables, likes the trend. “We’ve been in fresh for many years. The problem has been getting everyone else involved in it,” he said.
“The problem is you have to retrain your help for cold chain handling,” he added. “You also have to get over not knowing what the price is when the asparagus leaves the farm.”
Ignoring these issues, however, is now a luxury most farms cannot afford in the new global market world of supply coming in from all countries, Mr. Bakker said. “To be successful in the future, farms are going to have to take a more active role in marketing their crops.”
That’s what a number of Michigan asparagus growers realized and took to heart in 2001 when they formed a new cooperative dedicated to overcoming their bad reputation in fresh markets and positioning Michigan’s asparagus industry to grow along with consumer interest in fresh foods. To form Michigan Asparagus Growers Inc. (MAGI), farm members had to buy stock, commit to delivering one ton of asparagus per share, and post performance bonds at $200 per ton.
They set it up so that it would hurt if they failed to deliver, said Mr. Bakker, who now manages the cooperative. “The growers said, ‘We’re going to discipline ourselves.’”
The reliability that MAGI built into the industry’s fresh-market system translates into a whole new universe of possibilities based on trust between each link of the market chain.
The industry’s supply chain discipline came along just in time for Michigan asparagus growers to take advantage of the state’s Select Michigan program’s own launch in 2003.
“It’s been huge for us,” Mr. Bakker said. “First, it created demand. Second, it made more folks in Michigan aware that we have an asparagus industry in this state, and about when we are harvesting so they look for it and buy it.”
State budget cuts have left Select Michigan to survive solely on private industry contributions and grants, including key support from Michigan Integrated Food and Farming Systems, a non-profit group based in Lansing. Director Christine Lietzau, a staff member of the Michigan Department of Agriculture, is hopeful the program’s success will leverage new grants beyond this season and eventually gain general fund support once the state is back in the black.
It’s a program that can benefit many more farms and communities, she said. “We have been able to influence retailers into preferentially sourcing Michigan products during season. We bring a promotional program into their stores that increases their sales at essentially no cost to them.”
Both Select Michigan and MAGI are onto a burgeoning trend in food marketing that holds promise for Michigan agriculture, which produces the second-widest variety of crops after California. The future outlook for fresh produce in general is bright, according to Kathy Means, vice-president of the national Produce Marketing Association. “Things have never looked better for fresh produce. Everyone recommends we eat more,” she said. “The government says we need to double, even triple our consumption. And every diet program, even some of the whacky ones, have you eating fresh fruits and vegetables.”
Patty Cantrell, an economist and journalist, directs the Michigan Land Use Institute’s Entrepreneurial Agriculture program. Reach her at email@example.com