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As California and Peruvian organic avocado supplies hit the end of their road and Mexico starting to ramp up its production, the market on organic avocados was unsettled the last week of August, with some wide fluctuations in volume and pricing. By the middle of next month experts predict the pricing situation will stabilize, with Mexico dominating the supply side.
Earlier this week, Rob Wedin, vice president of fresh sales & marketing for Calavo Growers Inc., said the f.o.b. price on organic avocados ranged from the high $50s to the low $60s, depending on size and point of origin. Mexico was providing Santa Paula, CA-based Calavo with its vast majority of organic avocados as the company had finished up its California production.
Rob Wedin, vice president of fresh sales and marketing, Calavo Growers Inc.
Concurrently, the U.S. Market News Service reported that the dwindling supply of California avocados was fetching close to $90 on the San Francisco wholesale market for 48s, with 60s selling for a couple of dollars less per carton. That market is typically in a demand exceeds supply situation on organic avocados, with the wholesale market price usually much higher than the f.o.b. price, as the demand for organics in the San Francisco market is very strong.
Wedin said that as Mexico shifts from its flora loca (off-bloom summer crop) to its aventajada (in advance of the regular season) and temporada (main season) crops, volume should be steadier and equilibrium between supply and demand should prevail.
Bob Lucy, president of Del Rey Avocado Co., Fallbrook, CA, agreed. He noted that in late August, organic avocado supplies from Mexico had big swings from week to week as growers and packers tried to gauge how long the California and Peru organic supplies would last. “By the second week of September, they (organic avocado suppliers) will have found their niche,” he said. “By Labor Day, we will be out of our organic fruit from California.”
Bob Lucy, president, Del Rey Avocado Co.
He added that organic avocados from Peru were also quickly declining.
Ross Wileman, senior vice president of sales and marketing at Mission Produce Inc. in Oxnard, CA, said demand for organic avocados remains very strong and continues to grow. He said Mexico is expecting to have more total fruit this year (crop year July 1, 2019 to June 30, 2020), which should mean more organic fruit as well.
Ross Wileman, senior vice president of sales and marketing, Mission Produce Inc.
This month, Mexico’s Association of Avocado Producers, Packers and Exporters (APEAM) estimated that packers would send almost 15 percent more avocados to the U.S. market over the next 12 months than they did during the last crop year. It should follow suit that organic production will always increase a like percentage, if not even a bit higher, as some growers continue to transition groves into the organic sector.
Predictions are that the entire U.S. market could consume as much as three billion pounds of avocados in the next 12 months. That would be a 20 percent increase over the past 12 months in which it has been reported by the Hass Avocado Board that about 2.54 billion pounds were sold in the United States.
California is also expecting to produce a much larger crop in 2020, and, though it’s too early to tell, Peru is also expected to have a larger crop in 2020.
