"The asparagus market has never changed so much in all the time I've been in the industry," says Simon Schumacher, managing director of the Verband Süddeutscher Spargel- und Erdbeerenanbauer. At expoSE 2022, he spoke with us about the past strawberry and asparagus season, giving gave us predictions about the potential and the challenges next year will bring.
Simon Schumacher
Investment restraint due to decline in purchases
Despite the mixed mood regarding the difficult marketing year, Schumacher said exhibitors were satisfied and had good discussions. "Of course, in the aftermath of the fair, you have to look at how business will be and to what extent it is comparable to the previous year. Both the asparagus and the southern German berry companies in particular had a difficult season this year. This year's buying restraint and the increase in labor costs will definitely have an impact on the farms' production processes. Thus, areas for the cultivation of young plants could well be reduced next season. Furthermore, growers are questioning whether existing grading equipment could still be repaired, rather than investing in new machinery."
Uncertainties following the outbreak of war
The VSSE was able to answer how the situation stands for strawberry and asparagus farms via surveys. "On February 24, war broke out in Ukraine, and the asparagus season began shortly thereafter. The fears of war, as well as the associated uncertainty, ran through the entire season. In the society at that time there were discussions about a NATO alliance case, a potential nuclear war, but also about heating rooms for the winter. No one knew what was in store. At the same time, many people wanted to go on vacation again, which in turn meant that less money was being spent on asparagus and strawberries. This was partly more noticeable in the south than in the north, especially with strawberries," Schumacher recalls.
Reduction in supply led to higher demand
"Prices were inadequate, imports were massive. The market reacted accordingly and sharply reduced the supply of asparagus, as it were, which later led to intensive demand within the market. All of a sudden, asparagus became quite scarce, which few could adjust to. Prices were sometimes negotiated with the trade beforehand, which is why they could no longer be raised," says Schumacher.
Good season for northern German strawberry farms
For strawberries, the situation is said to have been similar, with the heat phase added to the mix. "This meant that the north still had a good season, because farms there start later and in some cases have lower production costs, as cultivation takes place over large areas, in some cases without dams and tunnels. There are some farms that, by and large, can compare last season with 2019. For asparagus farms, however, the season was noticeably worse."
Sales losses of 20-30 percent
The question is: How consumers will act now? "The price adjustments from gas and electricity providers are likely to have arrived at many households. This means they can calculate also accordingly whether they go abroad for the vacation in the coming year or not. There is hope that disposable income will once again be concentrated more on the domestic market.
Compared to the Covid years, many direct marketers told him they experienced sales losses of 20-30 percent. "Organic farms with direct marketing were particularly affected by this. Anything that wasn't essential, sold less. Consumers were less likely to reach for regional goods because discount goods appealed to them just as much." Further, there appeared to have been more interest in products such as lower-priced fruits and vegetables. Overall, 2022 was one of the lowest-selling years for asparagus in a long time, he said.
Acreage reduction of 10-15 percent
"A reduction of acreage will occur," Schumacher is certain. "Production will be scaled back to a marketable level. There will probably be an acreage reduction of 10-15 percent in 2023, which should happen faster for strawberries than for asparagus. Optimally, this will again lead to an improvement in prices. Food retailers will also have to come up with something in this regard. We hope that he will remain loyal to our farms and not replace the products one-to-one with goods from Spain, Greece or even Peru, Mexico and Morocco," says Schumacher.
2023 similar to 2022
Compared to 2020, demand for out-of-home consumption had increased by 100 percent. However, restaurateurs also offered smaller asparagus plates. "Strawberries for desserts and the like sometimes came more from Spain or other countries. In less high-income regions, restaurant visits also tend to be reduced. We expect to see a similar situation in 2023, although not with the same explosiveness. At the same time, we hope that the situation will develop in favor of asparagus," says Schumacher.
Due to this year's drought, growers had to keep their water pumps running longer, which in turn had a major impact on production costs given the inflation rate of diesel. "Association members told me that their electricity costs increased from 50,000 euros to 200,000 euros a year. The inflation rate in agriculture is probably around 20-30 percent. This is due to the use of crop protection and fertilizer as well as packaging materials. The 22 percent increase in labor costs will also have a massive impact."
Personnel urgently needed
In addition to this, skilled workers are needed, and good foremen even more so. "Sales staff and seasonal workers are also steadily dwindling. Seasonal workers from Romania are present in numbers, but how efficient and reliable they are is again another question," Schumacher reports. There are also workers from Moldova and Georgia, but they are selected by the local employment agencies. "There is also a contingent of 5,000 people for labor from the region. For asparagus and strawberries alone, we would need between 100,000 to 140,000 seasonal workers out of the 270,000 people employed in Germany at all who travel from abroad to work in agriculture." For discussion here would also be the extension of the Western Balkans regulation. Some demand that people from Asia (e.g. Vietnam) should be allowed to come over for the seasonal work.
"De-royalization" of asparagus
In order to make asparagus palatable to a larger consumer base, he said, communication to customers also needs to be tweaked. "Instead of talking about the need to increase prices due to the increase in the minimum wage, we will strive to be able to offer the best asparagus for every price range. After all, we also have different grades available, which also allows us to showcase the benefits of domestic production. We will refrain from using terms such as luxury and "royal vegetables" and instead speak of the first domestic vegetable. The vegetable should become a 'must have', not a 'luxury'.
For more information:
Simon Schumacher
Verband Süddeutscher Spargel- und Erdbeeranbauer e.V.
Werner-von-Siemens-Straße 2-6
76646 Bruchsal
Tel.: +49 7251 30320-80
E-Mail: info@vsse.de
Webseite: https://www.vsse.de