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California avocado crop light but lots of optimism

The California Avocado Commission sent out a press release in early March noting that the state’s “avocado growers are happy about the recent rains in the region, which have significantly reduced drought conditions.”

That is just one of the reason growers are very optimistic about the current situation despite the fact that the crop is only about half the size of the 400 million pounds shipped in 2016. Of course, the short crop is almost certain to create a very strong marketing situation, which is another reason for the optimism. In early March, with picking underway in the Golden State, the market for the very popular 48-sized fruit was $50 or more per carton, which growers are expecting to be a harbinger of things to come.Shamrock-Avocado--Corned-Beef--BitesShamrock Avocado and Corned Beef bites to celebrate Saint Patrick’s Day.

“Harvesting is ramping up a little earlier than expected for this year’s California avocado crop,” said CAC Vice President of Marketing Jan DeLyser. “As a result of the rainy winter we’ve had in California, avocado fruit is sizing, and growers have the opportunity to take advantage of strong demand for the local fruit.”

Rob Wedin, vice president of sales and marketing for Calavo Growers Inc, in Santa Paula, CA, agreed.  On March 7, he noted that California growers were picking fruit in greater volume than he had expected. “There was an early opportunity for California to get started and they jumped on it.”

He said that a smaller crop across the board requires each grower to manage their inventory very carefully to maximize dollars. The field price for avocados in early February was in the $1.20 per pound neighborhood, which is a good price during a heavier volume year.  A month later it had climbed to a very healthy $1.70 per pound, and was no doubt the driver behind the early picking.  With the amount of volume headed to the packing sheds during that March 6-11 week, Wedin said that by the end of the month “we will have transitioned our West Coast customers over to the California fruit.”

Because of the light crop, CAC, as well as the handlers, expect the marketing window to be truncated and the distant most of the state’s avocados travel to destination to be shortened. Speaking of the length of the season, Wedin said the vast majority of California fruit should be sold by the end of July.  While there will be some fruit available in August, with the earlier-than-expected start to the deal, he expected the weekly volume to drop off significantly by the beginning of that month.  “At this point, I project the volume the first week of August will be half that of the last week of July.”

Speaking of the geographic reach of the fruit this season, Rankin McDaniel, president of McDaniel Fruit Co., in Fallbrook, CA, said his firm expects very little fruit to be shipped east of Denver.  While there are devoted California avocado customers all over the country, the reduced volume means not all customers are going to be able to have their normal orders filled.

Combine this reality with a quickly-shrinking Mexican crop and a very strong marketing situation is on tap for the next four months and beyond.  With the many hectares of acreage of avocados in Mexico spread over a wide area in the state of Michoacan, and the four-bloom annual nature of the trees in that region, it is very difficult to get an accurate picture of the crop.  As the Mexico crop year moves into its final quarter, there is no doubt the crop is smaller.  While peak of the season weekly volume shipped to the United States easily tops 50 million pounds, March volume is only in the 30 million pound neighborhood on a weekly basis.  There just isn’t enough fruit to fill the normal demand in the United States.  Of course, higher prices and fewer retail promotions will quell that demand a bit, but it is a great marketing situation that California growers have entered in this spring time frame.

While the total California volume is expected to remain around the 200 million pound mark, there is a chance for growth because of the substantial winter rain.  With four years of California drought preceding that, trees have been stressed and the soil has had quite a salt buildup.  The significant rainfall has the effect of leeching the soil and giving those trees a very good drink of quality water.  A warm spring could lead to a growth spurt of the individual fruit and nudge up the average size of the fruit a bit.  Larger fruit naturally means more total volume. And in any event, it means very good quality, which handlers have said has been a hallmark of the early March fruit and they expect that to be the case throughout the year.