Avocado prices are soaring
Avocado prices are running twice as high as they were a year ago, with little or no relief in sight, as Cinco de Mayo kicked off another peak consumption season in the U.S.
“We expect (prices) to stay strong all through June and July, and maybe the market will start seeing more supply from Mexico in August and September,” Chris Varvel, sales and logistics director with Escondido, Calif.-based Henry Avocado Corp., said on May 5.
An off-bearing year in California — about half of last year’s crop — and less volume in Mexico than recent years, combined with continued growth in demand across the U.S., have propelled prices to about twice what they were a year ago, marketers said.
“You go through crop cycles, and we happen to be going through a cycle where supply from Mexico and California are both lower, so we have lower availability in the U.S. market than there has been in years,” said Rob Wedin, vice president of sales and marketing for Santa Paula, Calif.-based Calavo Growers Inc.
California production is peaking, but it is generating predominantly small fruit, said Josh Underseth, salesman with Fallbrook, Calif.-based Del Rey Avocado Co. Inc.
Mexico, which shipped 1.9 billion pounds of avocados to the U.S. in 2016 and holds a U.S. market share of about 80%, likely will top out at about 1.6 billion this year, Wedin said, noting that California’s projected output is about 200 million pounds, or about half of its 2016 volume.
Meantime, demand in the U.S. continues to rise about 15% per year, Wedin said.
“Now, volume is down and if that demand is continuing to increase 15%, that’s going to drive prices high,” he said. “The core users of avocados are really set on avocados being an extremely important part of their diet.”
Supplies will recover; it simply will take some time, Wedin said.
“Mexico’s (next) season starts July 1, but we believe by September, we’re going to see good supplies from Mexico and then, next year, very good supplies from California.
California’s season generally runs from late February or early March to September, Wedin noted.
An official crop estimate is expected from Mexico “in the next couple of weeks,” Wedin said.
Peru, which has dealt with heavy rains and flooding, has begun to ship some fruit in small volumes, but volumes from there during its June-August peak likely won’t provide much price relief, Wedin said.
Source: The Packer