Better quality brings higher prices for California avocados
Better quality brings higher prices for California avocados
With the California avocado harvest currently at peak season, the industry has been shipping anywhere from 8 million to 10 million pounds of avocados a week, according to Guy Witney, director of industry affairs for the California Avocado Commission.
In addition, Mexico has been sending between 7 million and 11 million pounds of avocados a week to the U.S. marketplace.
Aggregate volume for the two sources has been "between 17 [million] and 21 million pounds of fruit on the market every week," Mr. Witney said. That is comparable to the volume of avocados that moved into the market each week during the same period last year.
And yet prices this year are substantially higher, he said, "about 50 percent higher" than during the same weeks last year.
Mr. Witney believes that what is making the difference is the improved quality of the California fruit this year.
Last year, California avocado groves experienced considerable external cosmetic damage to the fruit caused by a pest called avocado thrips. As a result, "we had a tremendous volume of fruit" that had to be packed in a No. 2 box" and sold for a lower price. "A 25-pound box of [second grade] fruit was going for as low as $6 a box for foodservice, which is less than it costs to pick and pack the fruit," he said.
The prevalence of that low-priced fruit in the marketplace dragged down the overall market.
This year, "we have had far less avocado thrips pressure on the fruit," and because of the better quality, "we are seeing a much more stable price platform," Mr. Witney said. "We are seeing around 20 million pounds a week" in the market, "just as we did last year at the same time, but much stronger prices."
While "I wouldn't say it is a fantastic season," he continued, "there is certainly more optimism out there than there was this time last year."
Yet there are some major concerns facing the industry -- two relating to water and one relating to yet another pest.
Most major avocado growers rely heavily upon water from the Metropolitan Water District, much of it delivered through a state water project from the Sacramento River Delta in Northern California.
In late May, the state implemented a temporary shutdown of pumps in the Delta that pump water into the state project to protect an endangered species of fish, the Delta Smelt, that had been getting into the pump intakes. The pumps supply water to 25 million Californians, two-thirds of them -- including avocado growers -- in Southern California. The Delta pumping plant also provides water to farmers in the Central Valley.
While water users have not been affected yet because there are some water reserves from which to draw, unless the problem is quickly resolved, the potential impact is a matter of great concern, he said.
Another concern is an ongoing drought. Last winter, avocado groves received only a fraction of normal rainfall, and there has been virtually no rainfall since, which could lead to water shortages as early as this coming winter if the drought continues.
The Metropolitan Water District has sufficient supplies to meet growers' needs through the balance of the current season, but it announced that there would be cuts in water delivery by the first of the year if current conditions persist.
"We are pleased that we have this length of time for a warning so we can make the necessary adjustments and try to work things out for growers," Mr. Witney said.
Some growers have access to ground water, but it is generally quite salty, and avocados are perhaps the most salt-sensitive of all commercial crops, he said. Some growers are looking at "on-farm reverse osmosis systems" to improve the water quality from their wells, Mr. Witney said.
"I think we will see people get through it, but it is going to be very tough, and it will certainly involve added costs," he said.
The other matter of concern to avocado growers is the introduction of a new scale insect that has been found on Mexican Hass avocados coming into the state. State inspectors consider the insect an excludible pest, but federal inspectors do not.
In March, the California Avocado Commission filed a lawsuit against the U.S. Department of Agriculture seeking an injunction against further shipments of Mexican avocados into California until the USDA had time to make a new risk-assessment analysis.
The injunction has not been granted, Mr. Witney said. But at the request of the California Department of Food & Agriculture, USDA did "put together a science advisory panel to re-examine its non-actionable listing of scale insects on produce moving into the United States."
The panel, consisting of 17 scientists, met in Los Angeles a couple of weeks ago, and its report is expected soon, Mr. Whitney told The Produce News June 13. He acknowledged that changing a 20-year mind-set was "a big mountain to climb," but one thing that "got the attention of federal scientists on the panel" was the proximity to commercial avocado groves of most of the facilities where the Mexican avocados are brought for repacking and shipping.
The live scale insects that have been found on Mexican fruit in supermarkets may not be much of a threat to the California crop, but live insects on fruit arriving at a packing facility a few hundred feet from a commercial avocado grove is a major concern.
Meanwhile, the volume of Mexican fruit coming into Mexico has declined. In apparent response to the finds, Mr. Whitney said that many importers, most of whom also handle California fruit, are redirecting their Mexican product to other markets.
The United States is "a huge market" for avocados, and "there is a very large playground outside of California for the offshore producers," he said.
In addition, Mexico has been sending between 7 million and 11 million pounds of avocados a week to the U.S. marketplace.
Aggregate volume for the two sources has been "between 17 [million] and 21 million pounds of fruit on the market every week," Mr. Witney said. That is comparable to the volume of avocados that moved into the market each week during the same period last year.
And yet prices this year are substantially higher, he said, "about 50 percent higher" than during the same weeks last year.
Mr. Witney believes that what is making the difference is the improved quality of the California fruit this year.
Last year, California avocado groves experienced considerable external cosmetic damage to the fruit caused by a pest called avocado thrips. As a result, "we had a tremendous volume of fruit" that had to be packed in a No. 2 box" and sold for a lower price. "A 25-pound box of [second grade] fruit was going for as low as $6 a box for foodservice, which is less than it costs to pick and pack the fruit," he said.
The prevalence of that low-priced fruit in the marketplace dragged down the overall market.
This year, "we have had far less avocado thrips pressure on the fruit," and because of the better quality, "we are seeing a much more stable price platform," Mr. Witney said. "We are seeing around 20 million pounds a week" in the market, "just as we did last year at the same time, but much stronger prices."
While "I wouldn't say it is a fantastic season," he continued, "there is certainly more optimism out there than there was this time last year."
Yet there are some major concerns facing the industry -- two relating to water and one relating to yet another pest.
Most major avocado growers rely heavily upon water from the Metropolitan Water District, much of it delivered through a state water project from the Sacramento River Delta in Northern California.
In late May, the state implemented a temporary shutdown of pumps in the Delta that pump water into the state project to protect an endangered species of fish, the Delta Smelt, that had been getting into the pump intakes. The pumps supply water to 25 million Californians, two-thirds of them -- including avocado growers -- in Southern California. The Delta pumping plant also provides water to farmers in the Central Valley.
While water users have not been affected yet because there are some water reserves from which to draw, unless the problem is quickly resolved, the potential impact is a matter of great concern, he said.
Another concern is an ongoing drought. Last winter, avocado groves received only a fraction of normal rainfall, and there has been virtually no rainfall since, which could lead to water shortages as early as this coming winter if the drought continues.
The Metropolitan Water District has sufficient supplies to meet growers' needs through the balance of the current season, but it announced that there would be cuts in water delivery by the first of the year if current conditions persist.
"We are pleased that we have this length of time for a warning so we can make the necessary adjustments and try to work things out for growers," Mr. Witney said.
Some growers have access to ground water, but it is generally quite salty, and avocados are perhaps the most salt-sensitive of all commercial crops, he said. Some growers are looking at "on-farm reverse osmosis systems" to improve the water quality from their wells, Mr. Witney said.
"I think we will see people get through it, but it is going to be very tough, and it will certainly involve added costs," he said.
The other matter of concern to avocado growers is the introduction of a new scale insect that has been found on Mexican Hass avocados coming into the state. State inspectors consider the insect an excludible pest, but federal inspectors do not.
In March, the California Avocado Commission filed a lawsuit against the U.S. Department of Agriculture seeking an injunction against further shipments of Mexican avocados into California until the USDA had time to make a new risk-assessment analysis.
The injunction has not been granted, Mr. Witney said. But at the request of the California Department of Food & Agriculture, USDA did "put together a science advisory panel to re-examine its non-actionable listing of scale insects on produce moving into the United States."
The panel, consisting of 17 scientists, met in Los Angeles a couple of weeks ago, and its report is expected soon, Mr. Whitney told The Produce News June 13. He acknowledged that changing a 20-year mind-set was "a big mountain to climb," but one thing that "got the attention of federal scientists on the panel" was the proximity to commercial avocado groves of most of the facilities where the Mexican avocados are brought for repacking and shipping.
The live scale insects that have been found on Mexican fruit in supermarkets may not be much of a threat to the California crop, but live insects on fruit arriving at a packing facility a few hundred feet from a commercial avocado grove is a major concern.
Meanwhile, the volume of Mexican fruit coming into Mexico has declined. In apparent response to the finds, Mr. Whitney said that many importers, most of whom also handle California fruit, are redirecting their Mexican product to other markets.
The United States is "a huge market" for avocados, and "there is a very large playground outside of California for the offshore producers," he said.
