view current print edition






Tight avocado supplies to continue through summer

The demand exceeds supply situation that has defined the avocado market continuously since late spring of 2016 is expected to continue through the summer before loosening up this fall.75444-teeny-tiny-avocados-1

Interviews with several grower-shippers revealed the same facts. Production from California and Peru will be winding down to a trickle by the end of August and Mexico is not expected to start shipping a weekly volume near the 40 million pound mark, which is at least approaching the demand level, until late September or early October. While maturity of Chilean fruit appears to be on tap to enter the market in September, exporters in that country have built a strong following elsewhere and they will most likely only tap the U.S. market to capitalize on a strong price not to alleviate it.

Rob Wedin, director of fresh sales and marketing for Calavo Inc. in Santa Paula, CA, told The Produce News in late July that California will have shipped about 90 percent of its crop by the end of that month. The remaining 20 million pounds or so still on the trees will ship through August and September, averaging only a few million pounds at best each week. Other shippers indicated that Peru’s final shipments to the United States were already in route with mid-August containing the final arrival dates.

In the meantime, Mexico’s volume has not ramped up as quickly as expected and it appears that the flora loca summer crop is lagging behind expectations. For this particular mid-July week, Wedin said Mexico shipped 27 million pounds to the United States, California chipped in 8.5 million pounds and Peru came aboard with about eight million pounds. For August, he noted all three points of origin will have less volume on a weekly basis. Total volume will probably have difficulty reaching 35 million pounds. “I think it will be October before we are back on track,” he said, with “on track” meaning a period of total weekly shipments topping 45 million pounds. He predicted that Mexican shipments will be less than 25 million pounds per week in August, in the neighborhood of 30-35 million pounds in September and jump another 10 million pounds per week in October to that 45 million pound level.

Wedin said Chile could help out but he noted that in the past year, with markets very strong, Chile still shipped less than 60 million pounds to the United States during their entire 2016-2017 season. There is not much evidence to expect that to be much different during their September 2017 to March 2018 shipping period. On average, that again is only a few million pounds per week.

Speaking to The Produce News on July 25, Gary Caloroso, director of marketing for Giumarra Agricom, the firm’s avocado division headquartered in Escondido, CA, said the market remained remarkably strong and he agreed there would be no let up until late September/early October. Running down the company’s price list, he said most avocados were in the $40-$50 range depending upon size and point of origin. He said California fruit in 48 size was commanding $50 “and the market on 48s is getting stronger.” He added that even small fruit was in the high $30s or low $40s. And organic avocados were through the roof. He noted that if you could find a box of 48 size organic avocados it would cost you about $65 on that late July day.

Bob Lucy, president of Del Rey Avocado Co. Inc., Fallbrook, CA, said the lack of fruit at the most popular 48 size was increasing demand for other sizes and propping up those prices as well. There can often be a wide price disparity among sizes as growing conditions can cause a surplus in one size and a drought in another. This season that price disparity has typically been more narrow because of total decrease in volume, demand is high for basically any avocado available.

Wedin said Calavo has had very good movement for its small fruit, typically sold in bags. Trader Joe’s is doing great with its Teeny Tiny Avocados and other retailers are finding similar success. Typically packed four to six pieces of fruit in a bag, it gives the retailer a good ring and a better price point, per avocado, than the larger sizes that are sold individually.

Basically, feed the entire avocado supply forecast into the computer and what comes out is that promotional pricing is going to be at a store near you -- but not until October.