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Mexican avocado imports rise to meet U.S. market demand

Demand for Hass avocados in the United States has more than doubled over the last seven years and now stands at around 1 billion pounds annually. Most of that volume comes from three sources: California, Mexico and Chile.

A year ago, California avocados were hit hard by a freeze, which reduced an already smaller crop than the previous year's bumper harvest. As a result, the 2007 California shipping season ended early.

In July, the Chilean avocado industry was hit hard by a freeze, which has resulted in reduced export volume to the United States during the fall and winter.

Last fall, firestorms and high winds diminished the new California crop. California's 2008 harvest, which has just begun in a light way, is still expected to be 44 percent greater than last year, but it will be smaller than it would otherwise have been.

Mexico, as the largest avocado-producing country in the world, has demonstrated its ability to adjust exports to the United States according to the needs of the market.

According to Emiliano Escobedo of The Asociaci?n de Productores y Empacadores de Aguacate del Estado de Michoac?n, a Mexican avocado exporters association better known by its acronym APEAM, Mexican avocado shipments between July 1 and Dec. 31, 2007, totaled 222 million pounds, which is double the volume shipped during same period in 2006.

Mexico expects to export a similar volume of avocados to the United States over the next six months, most of that during the months of January through May, he said.

Although Mexico harvests avocados year round, volume is lighter during the summer months when California production is heaviest.

Super Bowl weekend is one of the heavier demand periods of the year for avocados, and with news of freezes in Chile and fires in California, some retailers have wondered whether there would be enough fruit in the market to meet demand as California is just getting going and Chile begins to wind down.

According to Mr. Escobedo, there is no reason to be concerned. "You have Chile in the marketplace right now and probably will be in the marketplace through February," the California harvest was beginning, and "Mexico is continuing," he said. "There is going to be plenty of supply in the Hass category. There should be pretty good volume to support the demand."

During the period from July 1, 2006, to June 30, 2007, Mexico was "the category leader" in the United States "with the major portion of the market share," he said. "This year [2007-08], Mexico will remain the category leader."

The lighter California and Chilean volumes in 2007 gave Mexico an opportunity to "reach out farther into the U.S. marketplace," Mr. Escobedo said. "Mexico is playing a very important role" in the U.S. avocado market "because it is bringing stability to this market," even as U.S. avocado demand continues to grow.

"I think this year Mexico is playing a major part in the growth of the category overall, regardless of the origin," he said.

Mexico's ability to boost its exports to the United States in response to market conditions has been enhanced by increased plantings of avocado groves in Mexico and by new orchards being certified for export and "more municipalities ... coming into the program." That has increased "the pool of avocados available for export" to the United States, he said.

Significantly, the Mexican avocado industry continues to exercise market discipline, increasing export volume as needed to meet demand but not flooding the market with so much product that prices become depressed, he said. Mexico's proximity to the United States gives it an advantage in that regard as compared to Chile because Mexican shippers are able to react more quickly to the market.

Avi Crane, president of Prime Produce International LLC in Orange, CA, which markets avocados from all three countries, told The Produce News that he does not expect to see a significant volume of California fruit in the market this year until April and that from January through March, most of what is harvested "will probably stay in California."

He noted that some news reports have made the Chilean and California prospects look bleaker than they really are. Despite the freeze in Chile last summer, 30 million pounds of Chilean avocados will enter the U.S. market during January. And despite fire and wind last fall and residual effects from the previous winter's freeze, California's crop will still be up 44 percent over last year.

That said, Mexican avocados represented 50 percent of the supply last fall, "many weeks reaching 70 percent of supply, and in January it will be over 50 percent." During February and March, Mexican fruit could account for as much as 70-80 percent of the market, he said.

Prime Produce's own Mexican avocado sales increased by 300 percent in 2007 over the prior year, Mr. Crane noted.

"Mexican growers do have alternatives," he said. "They have a strong domestic market and they have very strong exports to Japan." Contrary to "some people's predictions, they have been shown to be a reliable supplier of avocados to the U.S. market, and certainly at Prime Produce, it is allowing us to be a reliable supplier of avocados to our customers."

California avocado shippers who also handle Mexican avocados have an advantage in that they have invested in ripening capabilities, Mr. Crane said. Retailers "need to rely on those companies for avocados for Super Bowl, for Cinco de Mayo, and all year round." Ripening has been "the bedrock of our industry" in California for many years, and that has been a major factor in building avocado consumption, he said.

The Hass Avocado Board, which represents all avocados marketed in the United States regardless of source, is constantly "out selling our programs" to continue building demand, said Jose Luis Obregon, the organization's executive director.

"It really benefits us to have various suppliers because we know that we can confidently go out and sell programs without worrying whether we are going to have the supplies," Mr. Obregon said.

Mexican avocado exporters have done a good job of "measuring the market and knowing when to put the brakes on and when to push the gas," he said. So Mexico's "contribution for the entire category has been very beneficial."

Mr. Obregon was in Michoacan visiting avocado groves when The Produce News spoke with him by telephone Jan. 9. "The fruit looks beautiful," and the set for the upcoming season "looks very good," he said.

Growers in Mexico expect their volume to "wind down probably around April and May," he said, and they expect a smaller volume during the summer than last year. But in California, the Hass crop has "a pretty good set" and will be coming in with good volumes by then.

"Demand in the summer months might be the same as last year, but the players are going to be a little bit different," said Mr. Obregon. "These are the benefits of having these various suppliers in the U.S. market."

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