Avocado demand continues to drive good markets

The one-week suspension of shipments from Mexico in June caused a surge in FOB prices that points to a strong market for organic avocados all summer.

For the second time in two years, the U.S. Department of Agriculture  suspended inspections in Mexico for one week in mid-June over safety concerns for its employees. While inspections resumed a week later and shipments have returned to a near-normal level, the pipeline was emptied and higher-than-usual prices remain.

Gary Clevenger, managing member of Freska Produce International in Oxnard, California said as Mexico’s shipments halted, California experienced its heaviest shipping weeks and strong demand for the most popular sizes: 40s, 48s and 60s. The conventional FOB price climbed into the $60s for each of these sizes and is still there. Organic avocados were receiving a 15-20% price premium over that number.

Clevenger noted that Mexico’s summer crop, the flora loca, was not yet reaching the optimal oil content established by dry matter testing.  “That’s holding back the loca crop,” he said. 

While Peru is sending solid volumes to the U.S. market at this point, California’s crop is running out of steam as high demand has sped up the shipping of the fruit. “California’s crop is about 85% done,” Clevenger said on July 1. “I don’t see a big change in the market price until August or maybe even September.”

Peter Shore, vice president of product management for Calavo Growers Inc. in Santa Paula, California, also noted strong demand and good prices for both organic and conventional fruit.

However, Shore was a bit more optimistic about when supplies would catch up with demand. He reviewed the current situation including the suspension of shipments from Mexico, California’s supplies being depleted and the slow start for Mexico’s summer crop and said: “All this is happening at once which has led to tight supplies and a strong market.”

But Shore said the summer crop coming out of Mexico, especially from the state of Jalisco, should add volume in July and August, combined with increased shipments from Peru. “We are starting to see some good numbers from Peru,” he said. “Eventually we will see supply and demand come into balance.”

Speaking specifically about organic avocados, Shore said the high prices are currently not conducive for promotions. However, as the summer wears on that should change, he noted. As Mexico moves into its new crop, Shore said there should be some promotable pricing especially on the smaller sizes for organic avocados.

Patrick Lucy, president of Del Rey Avocado Company in Fallbrook, California, said there will be a strong avocado market all summer long, though not at the current levels. On July 2, he said all the packing sheds in Mexico are finally ramped up again after the suspension and shipments should be larger next week.

Patrick Lucy, president of Del Rey Avocado Company

But Lucy noted California is running out of fruit and Peru has a smaller crop that is skewing toward smaller sizes. Typically, Peru has come in each summer with a size curve peaking on the larger end of the spectrum.

“Peru is not going to have a big crop this year and they have very few 48s and larger,” Lucy said.

Europe, which has long been the leading buyer of Peru’s avocados, had a very strong spring market. “They took a lot of Peru’s fruit,” Lucy said.

The volume of organic avocados from Peru will also be down significantly. “The organic fruit has the same issue with sizing,” Lucy said. “Most of what comes in will be small. The large sizes will only amount to a drop in the bucket.”

Expect to see a decrease in the overall market price in the coming weeks as Mexico’s flora loca crop gains volume through July, Lucy said. He expects the market to hold around upper $50s to low $60s for conventional 48s, with the smaller sizes being lower and offering promotable pricing.

There could also be some promotional opportunities on organic avocados but it will most likely center around the smaller sizes in bags, according to Lucy.

The general consensus appears to be that both organic and conventional avocados are going to command good pricing through the summer and into the fall. After that, Lucy said it will depend on how well the avocado trees in Mexico perform during the summer. “There is more acreage but the trees have also gone through stress in back-to-back years because of lack of rain,” he said. “We just don’t know what that’s going to do.”

To date, Mexico’s avocado organizations have estimated the 2024/25 crop at near the same level as this past 12 months, which means about 2.5 billion pounds shipped to the U.S. market.