Dwindling Asparagus Industry Takes Another Blow
The California asparagus industry has been on a steady decline over the past decade and another major packer is shutting down their production lines for good. Kings Crown Packing in Stockton is getting out of the asparagus business after almost 30 years. California Asparagus Commissioner Jeff Klein, who also grows, packs and ships his own asparagus in the Stockton area, said the move isn’t surprising as the asparagus industry continues to struggle in California. “…People are getting out for less labor-intensive crops and they just can’t make any money at it,” Klein said. “(Kings Crown Packing) historically does three or four times the volume that we do but they are getting out because they can’t afford to do it anymore.”
According to USDA’s National Agriculture Statistics Service, harvested asparagus acreage peaked in California in 2000 with an estimated 37,000 acres harvested. That number has rapidly declined since then, taking a big drop in 2008 and down to around 5,000 acres harvested in the last couple of years. Klein believes there is less than that now. “10 to 15 years ago, there were at least 35,000 acres of asparagus and probably closer to 40,000,” Klein said. “Now you are looking at about 2,000 acres.”
Production Costs Climbing
The issue remains to be production costs. A rising minimum wage, among other regulations, have increased how much a box of Klein’s asparagus can be sold at without taking a loss. Klein said Mexico has stepped up their production, now able to grow asparagus almost year-round, and he can’t compete against the imports. “I know a few years ago they were around $20-$25 to produce box, I am guessing they are now somewhere around $30,” Klein said. “It costs me somewhere around $50-$55 to produce a box of asparagus. If I were to sell at $30 a box where Mexican asparagus can sell at, and I do 100,000 boxes a year, that’s a $2 million dollar hit I have to take trying to stay in the asparagus industry.”
Mexico isn’t the only area outside of California with an advantage. California has one of the higher minimum wages in the United States. Many other states that compete with California in other commodity markets have much lower rates and some operate on the Federal minimum wage which is $7.25 an hour.
Labor remains one of the biggest production costs for Klein and it continues to increase with California’s minimum wage laws. Asparagus is a very labor-intensive crop and Klein said even finding workers to do it is a challenge and costs more. “It’s very challenging work. You need to have the production to go off of piece rate, so workers can make some money at this job…we’re paying $12 an hour just to find workers.” Klein recently invested $250,000 for a robotic palletizer that stacks his potato boxes for two and a half months out of the year. He said even with that limited use, the machine should pay itself off in four years.
Listen to Klein’s full interview.
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