OPN Connect Newsletter 14 · June 1, 2017

Organic Avocado Market to Remain Tight 

With conventional avocado f.o.b. prices sky high, it stands to reason that the organic avocado market has followed suit.  And there is no letup in sight.

Bob Lucy, President of Del Rey Avocado Co., Fallbrook, CA, said a carton of 48 sized organic avocados was selling in the mid-$60 range for much of May.  California producers have been transitioning acreage to organic production at a fairly good clip over the last few years, but Lacy said that hasn’t been the case in Mexico and Peru.  This season, California has only half the avocado tonnage that producers sent to market last year, with organic production is in the same ballpark.  While an increase in Peruvian supplies and a possible mini-surge from Mexico this summer could move the conventional price down a bit, organic avocados will almost certainly be in a demand-exceeds-supply situation all summer.

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Lucy did allow that the premium currently being paid for organic avocados is not as high as it usually is.  On average, he said organic avocados typically sell for about 25 percent more than the conventional fruit.  In May, the premium was closer to a 10 percent up charge. 

Rob Wedin, Vice President of Fresh Sales and Marketing for Calavo Growers Inc., Santa Paula, CA, agreed that the f.o.b. price for organic avocados has been very strong and he doesn’t see any credible reason that will change soon.  Wedin noted millennials are driving the demand and seemingly will pay almost any premium at retail.  The week before Memorial Day weekend, he said the market was $68 for the always-popular 48-sized fruit.   Some grocers were selling that organic item at $4.98 each.

The picking of the California crop is running ahead of schedule, so by the end of July about 90 percent of the crop is expected to be sold.  With no major sources of organic avocados scheduled to come into the market place until Mexico gets into its new season in the fall, prices should remain very high.  Mexico and Chile could provide some volume during the September to December time frame, which could improve the supply picture. 

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