Avocado shippers enjoy strong market, good supplies
After several weeks of supply disruption for several reasons, April saw the return of solid avocado supplies accompanied by a strong market. A couple of industry experts are anticipating that supplies will remain steady for the next couple of months and are hoping the market price will follow suit as demand remains very good, despite challenges caused by a precipitous drop in foodservice orders.
Rob Wedin, vice president of fresh sales and marketing for Calavo Growers Inc., based in Santa Paula, CA, detailed the supply issues of late March/early April. “There was a shock to the system around St. Patrick’s Day when we realized that there could be a drop in orders,” he said.
It was around that time that many major events around the country were cancelled and restaurants started to close. “We accommodated that cut in business by cutting back on the harvest,” he said.
During the first three weeks of March, avocado shipments in the United States totaled around 150 million pounds. The following three weeks, stretching from March 23 to April 12, shipments fell to a total of 85 million pounds. During the week ending April 19, they were up again with Mexico sending almost 50 million pounds to the U.S. market while California chipped in with almost 16 million pounds, its largest output of the season by far. The week of April 20-26 had a projected volume of approximately 65 million pounds from the two countries.
Wedin said the March drop in supplies was the result of the coronavirus-induced cutbacks, Easter week in Mexico, which eliminates several harvest days, and rain in California’s growing regions, which also contributed to the harvest cutback.
Strong orders in the first half of April did bring back the normal level of picking and also kept the market price strong. Wedin said the largest fruit (32s to 60s) was commanding prices in the low to high $40s depending upon size and origination.
Ross Wileman, senior vice president of sales and marketing for Oxnard, CA-based Mission Produce Inc., was a little concerned that buyer orders might outflank consumer purchases moving into May. He said the orders had been very good the week of April 14, which caused Mission and the other handlers to ramp up production to fill that demand. Wileman said retail orders seem to be mirroring a typical year a couple of weeks prior to Cinco de Mayo. He is a bit reluctant to predict that this year’s holiday will generate the same sales as a typical year. “We’ll see,” he said. “We hope the orders don’t dry up.”
It is anybody’s guess whether consumers will party over the Cinco de Mayo holiday in the same avocado-buying fashion as when restaurants are open. While some states are expected to open restaurants by then, the majority of foodservice establishments will still be closed or only offering takeout.
Taking a longer view, Wileman said the reduction in orders through much of March should mean ample supplies well into summer. California has a much larger crop, Mexico seemingly still has plenty of its 2019-20 crop to send to market, and Peru is estimating that it is going to up its U.S.-bound volume about 20 percent to 220 million pounds.
While Peru will send fruit into the United States in limited volumes in May, both Calavo and Mission will begin to offer Peruvian fruit for sale in mid- to late June. Wileman said Peruvian exporters have delayed their shipments to the United States for several weeks and are currently focusing on the European market, where they are the majority source of origin on avocados.
Wedin concurred that there should be ample supplies of avocados in the U.S. market throughout the summer as all three sources of origin should have solid supplies at least through August. In fact, he said it is anticipated that California growers will stretch out their season a bit to accommodate the lost sales in March. Avocados, of course, can be held on the tree for an extended period, barring unforeseen weather events. The 2020 crop was already expected to last through Labor Day in early September. Now the California industry has estimated that it will ship 10 million pounds during the first week of September and will still be above the 5 million pound mark in mid-October.
As far as a response to COVID-19, the industry is noting an increase number of avocados sold in bags. “Our bags sales are way up,” said Wileman, reasoning that consumers apparently are trying to avoid handling raw product when they have an option.