While the 2023 California avocado crop has been estimated to be about 10 percent below its four-year average with a volume of 257 million pounds, shipments of organic avocados are expected to be down by an even greater percentage. A pair of California grower-shippers offered different perspectives on how this lower volume will impact pricing.
Patrick Lucy, President, Del Rey Avocado
“The organic volume is down a bit,” said Patrick Lucy, President of Del Rey Avocado Company in Fallbrook, CA. “It usually represents about 10 percent of California’s total volume. This year, it might only be at 6-7 percent.”
The decreased volume will mean higher prices for the organic avocado category later in the spring, Lucy said. Del Rey is a leader in organic avocado sales, and Lucy said this week that the current price gap between conventional and organic fruit was about a 15 percent premium for the latter category. “But once Mexico’s organic volume starts to decline in late April, we could see some pretty good organic FOBs,” he said.
Del Rey Avocado organic avocados
Though California growers have delayed bringing their avocado crop to market, largely because of low FOB prices, Lucy said that has to change pretty quickly. California’s production capacity on a weekly basis is about 13 million pounds, Lucy believes, and at that clip, it would take close to 20 weeks at full volume to move through the crop. He reasoned that shipments better get close to that level by the first week of April, and even then, the industry will need about four months of high-level shipments (April through July) to sell what needs to be shipped.
“The organic volume is down a bit. It usually represents about 10 percent of California’s total volume. This year, it might only be at 6-7 percent.” - Patrick Lucy
It is precisely this ticking clock that has Eco Farms President Steve Taft a bit less optimistic about FOB prices on both California organic and conventional avocados.
“California growers are trying to wait in hopes that the market gets better,” Taft said this week. “But it appears that Mexico has lots and lots of fruit. At some point, California growers are going to have to start picking. We are growers also, and so we understand the delay.”
Steve Taft, President, Eco Farms
Taft noted that the projection was for California to send about 5 million pounds to market last week (March 12-19), but instead shipments only topped 1 million pounds. “The FOB price did go up the last few weeks, but then it plateaued, and now it has slipped back a bit,” he said.
Mexico appears to have a lot of fruit, Taft noted, especially the most-popular larger sizes of 40 and above. “I think it’s going to be April before we see 5-million-pound weeks out of California,” he said. “Some growers will want to wait until May, but we have to start relatively soon if we hope to market the entire crop.”
“California growers are trying to wait in hopes that the market gets better.” - Steve Taft
Turning his attention specifically to the organic avocado volume, Taft said Mexico has had good numbers in that category so far this year, and they don’t appear to be letting up. That volume has kept the organic avocado FOB relatively low and led to lots of promotions. He reported that the organic FOB price on March 21 was about $40/$41 for 48s from Mexico, while California’s organic production of that size was returning $43 to $45.
Eco Farms organic avocados
While Mexico’s organic volume typically drops off significantly in April, leaving room for California’s organic fruit to command a sizable premium, Taft is not optimistic that will be the case this season.
“Jalisco is a bit of a game changer,” he said, noting that the Mexican state had gained full access to the market last June. “This year, they have doubled the amount of acreage that is certified for shipment to the US. In that May/June time slot when Michoacan is declining, Jalisco may fill the gap. Jalisco is going to be more aggressive marketing their crop to the US this year.”
Taft is not certain of the amount of organic avocados Jalisco has, but he said his Temecula-based company has fielded calls from a number of organic growers from that region looking for a California handler.
“I think the sentiment that the organic avocado market will be short leading to high prices [for California’s fruit] might be wishful thinking,” he said.