California avocado volume begins to increase

Some weather issues combined with a disappointing early season market to get the California avocado season off to somewhat of a shaky start.

With a huge amount of imported fruit in the market in January, the market price for the start of the California avocado season was not very strong, to say the least.  However, handlers believe the market will improve as the season progresses and this still could be a good season for growers from the Golden State.Although this season got off to somewhat of a shaky start, California avocado handlers believe the market will improve as the season progresses.

“Theoretically, we would have liked to have had an early start to this season,” said Rob Wedin, vice president of fresh sales and marketing for Calavo Growers Inc.  “However, the volume out of Mexico created pressure on the price and we haven’t had the rain we expected, so overall we have gotten off to a slow start.”

Wedin said many retail customers, especially in California and on the West Coast, do want to shift to California fruit, but the volume wasn’t there in January and February. He said volume was increasing in March and by late March there would be sufficient volume for retailers so inclined to make the shift.  The Calavo executive was also hoping that a decrease in volume from Mexico would combine with increased demand around Easter (March 27) to give the f.o.b. market a boost.

Bob Lucy, president of Del Rey Avocado Co. Inc., based in Fallbrook, CA, was not so sure a drop in Mexican avocado volume was imminent. Having just returned from a trip to the Mexican avocado producing region during the first week of March, Lucy told The Produce News on March 10 that he anticipates Mexico shipping around 30 million pounds of fruit into the U.S. market for most of April, May and June.  However, add that production to an expected 12-15 million pounds from California each week, and he said the market should be able to absorb it.  The Del Rey executive said spring and summer consumption of avocados is typically greater than in the winter, and this past fall consumers were easily buying close to 45 million pounds of fruit each week. He said during the summer months that same sales volume would be accompanied with a higher f.o.b. price in all likelihood.

Lucy said that because of Del Rey’s late Morro Bay deal from San Luis Obisp County, the firm will have California avocados on its sales board through October.  He said those most northern California growers appear to have a very good crop set this year.  

Dana Thomas, president of Index Fresh Inc., is also very bullish on demand for California avocados this year.  He expected volume to “increase throughout March, hit its stride in April and remain strong in May, June, July and August, before beginning to taper off in late August.”

Thomas noted the large volume of avocados brought into the United States during the fall and winter months (as much as 50 million pounds during the heaviest weeks), and said that volume increased the distribution channels and has created a very strong demand for the fruit. “This will become more apparent as we enter the spring and summer and (as a result) I expect to see improvement in the market.”

Another California avocado veteran who sees only blue skies in the future of the crop is Rankin McDaniel Sr. of McDaniel Fruit Co., based in Fallbrook, CA. McDaniel said that the supply/demand situation was a little bit out of whack to start the season, which resulted in lower f.o.b. and field prices than were expected. “We have an oversupply situation at the moment,” he said in early March, “but we have seen these cycles come and go. I’ll just tell you that we are continuing to invest in California fruit.”

Long term, he said, the prospects remain very good.  McDaniel said a lot of fruit is moving through the pipeline on a daily basis, 365 days of the year, but he remains bullish that similar growth to what has been experienced over the past decade will continue.

Total U.S. consumption soared past the two billion pound mark last year and California’s 2016 crop is one-third larger than its 2015 counterpart, while Mexico continues to increase its shipments to the United States.  California is expected to produce about 400 million pounds of avocados, while total U.S. consumption should be at least 2.3 billion pounds.

Like others, McDaniel expects volume from California will grow steadily until the industry “hits its stride” in April, and then shipments will continue through August.  At the peak of the season, McDaniel estimated that California would be pumping about 14-15 million pounds per week into the marketplace.

One interesting note is that many of those contacted actually expect Peru to ship fewer avocados to the United States this summer.  Lucy of Del Rey said Peruvian avocado exporters have found a very good market in both Europe and Asia and have been concentrating their efforts in those locales.   

“We are not going to be bringing in Peruvian fruit at all this year,” said Wedin of Calavo, “as we expect to have 50 percent more volume from California.  We are concentrating on fruit from North America to satisfy our customers.”

As this story was being written, El Nino, after a two-month dry spell, was once again dumping significant rain in California.  McDaniel said the rain would only be a positive as it will help size the fruit and improve the quality as rain water is much preferred over well water.

Lucy agreed noting that San Diego County growers would like to see a good three-inches of rain over several days to help leech the soil of salinity, which will help size this year’s crop and set next year’s crop.  He said the four year drought has caused many growers to use inferior water with increased salinity.