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Though organic avocados supplies from California are still very light, shipments from Mexico remain strong allowing for promotional pricing at the retail level.
Donny Lucy of Fallbrook, CA-based Del Rey Avocado Co. told OPN that organic avocados have been priced very aggressively, which has allowed for some very good promotions at retail. “Typically, you see organic fruit going for $2.29 to $2.99 at retail,” he said, “but this year we have seen lots of pricing for under $2, which is great.”
Donny Lucy, Del Rey Avocado
Lucy said the premium being paid for organic avocados on the most desirable sizes (40s and 48s) did move higher this week to about $8 above the conventional price; However, this allows for ad pricing, while at the same time giving the grower a very nice premium of more than 30 percent. He added that Mexico appears to have very good supplies for the foreseeable future so the f.o.b. market price on organic avocados should remain fairly steady.
Echoing those comments was Calavo’s Rob Wedin. In fact, he relayed that the premium for organic avocados from Mexico on most sizes was only in the $4-$5 range. He noted that signifies there is plenty of volume out there and room for promotions.
Rob Wedin, Calavo
The Calavo veteran said the promotion of organic avocados has moved mainstream. He said there are plenty of retailers that want to put an organic commodity on ad every week and avocados are currently a very strong candidate and get a lot of promotional play throughout the year.
Unfortunately, Lucy said the crop of organic avocados from California is going to be light all season. The California Avocado Commission is working off a budget projection of about 160 million pounds of fresh avocados this year. It appears to be the smallest crop in more than a decade for various reasons. The Del Rey executive said the organic production is mirroring that of the entire crop.
With f.o.b. prices at a relatively low level because of heavy supplies from Mexico, most California growers are putting off harvesting until later in the spring and summer when there is anticipation that the market will be stronger. With a light crop, growers understandably want to maximize returns by waiting for a stronger market.
Wedin of Calavo said that strategy has been helped by significant rainfall in the growing regions in both January and February. Natural irrigation from the sky is the best medicine for any tree. It creates a healthy tree and a healthy tree can hold fruit longer into the year as growers search for a better opportunity to market their crops.
Both Wedin and Lucy said there will be limited amounts of California fruit in March, but the vast majority of the crop is expected to come to market during a three to four month window in the April to July time frame.
In the meantime, Mexico keeps chugging along with tremendous volume. During the three weeks prior to the Super Bowl – one of the top two or three avocado consumption weekends of the year – our southern neighbor sent more than 200 million pounds of avocados to the United States, with organic avocados getting their fair share of those shipments. Mexico’s avocado industry has projected a total crop for its fiscal year (July 1 to June 30) that is 15 percent greater than the previous season. And for the final third of the season, growers expect to send almost 20 percent more fruit to the U.S. market than they did a year ago.
