With big Mexican crop, Chilean avocado exports plummet - The Packer

With big Mexican crop, Chilean avocado exports plummet

12/20/2012 05:03:00 PM
Andy Nelson

A huge Mexican avocado crop has severely limited exports of Chilean avocados to the U.S.

Because of the size of the Mexican crop, Calavo Growers Inc., Santa Paula, Calif., isn’t even importing avocados from Chile this season, said Rob Wedin, vice president of sales and fresh marketing.

The Association of Michoacán State Avocado Producers and Packers (APEAM) projects that 986 million pounds of Mexican avocados will be shipped to the U.S. in 2012-13, up from 782 million pounds in 2011-12.

Initially, Wedin said, Chilean shippers expected to send 130 million pounds of avocados to the U.S. That was first downgraded to 100 million pounds. As of mid-December, the estimate had plummeted to about 50 million pounds because of Chilean shippers’ fears of oversaturated U.S. markets.

Through Dec. 15, about 19 million pounds of Chilean avocados had been shipped to the U.S., down from 86 million pounds last year at the same time, according to the U.S. Department of Agriculture.

“It’s down to about two million pounds a week for the first quarter,” he said. “Our position was, there wasn’t a real opportunity for Chilean fruit in the U.S.”

Volumes initially slated for the U.S. are now being rerouted to Argentina, Europe and other markets, he said.

Even with the drastically lower volumes from Chile, marketers are faced with the task of moving a very big crop this season, thanks to another record year for Mexico, Wedin said.

Year-to-date, 25% more avocados than last year had been shipped in the U.S. through mid-December.

The week of Dec. 10, about 31 million pounds of avocados were shipped from Mexico to the U.S. Just 1.5 million pounds came from Chile, said Bob Lucy, partner in Del Rey Avocado Co. Inc., Fallbrook, Calif.

Those are big volumes from Mexico, but not so big that markets couldn’t be a little stronger, Lucy said.

“We’re at about the threshold of where we can move things smoothly, but the market’s about $3-5 under where we think it could be.”

On Dec. 18, the U.S. Department of Agriculture reported prices of $17.25-18.25 for two-layer cartons of hass 48s from Mexico, down from $24.25 last year at the same time.

Lucy is cautiously optimistic that the holidays will slow volumes, leading to a corresponding boost in prices. In addition, he said more Mexican shippers are realizing they may need to slow exports to strengthen markets.

“We’re getting a little more accommodated” to the big volumes, Wedin said. “We expect to be extremely busy through the summer and into the fall.”

Prices are lower than growers and shippers would like, but still fairly stable, particularly on sizes in the 40-70 range, Wedin said. Markets for both the smallest and the largest fruit have been more volatile.

There’s also no need for Chilean avocados on the back end of the Mexican deal because of an expected big California crop, Wedin said.

“California will start in February and really build in March,” he said.

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san luis obispo  |  December, 21, 2012 at 11:17 AM

What a shame over production. Maybe if avocados were picked with higher levels of oil meaning better maturity and they wouldn't cut black inside sales would be better. The biggest complaint from consumers on imported avocados is when they ripen they cut black inside Better maturity together with retail help would ease some overproduction

Sandy Robinson    
Redland, Florida 33031  |  December, 21, 2012 at 09:43 PM

That's all the more consumers should buy Fla grown avocados when in season as the real look of an avocado is governed by the weight & ring size before any picking is done. A Maturity Committee sets the size, weight and calendar dates of the correct picking times. Then. Federal inspection inspects the size & quality of the shipment before trucks deliver to markets. This gives the customer a satisfied mature tasting avocado to enjoy.

December, 21, 2012 at 09:45 PM

I replied to the the DALE comment below

San Diego  |  December, 27, 2012 at 02:24 AM

You will most likely see higher oil content and better quality from Mexico than Chile. Chile has, over the years, taken advantage of the US market because they that no competitors thus exporting what quality they wanted. We knew Mexico was going to change the landscape.

Mike D    
Escondido  |  December, 27, 2012 at 09:12 AM

The reality is that the market for avocados is changing and some people are resisting the change. The avocado market has been a very small place for very long. A handful of handlers moved the majority of the volume and it kept prices fairly high and fairly stable. Mexico has opened the door to many non-traditional handlers to enter the handler circle and the traditional industry no longer has any control over volumes or prices. A large company like Mission or Giumarra now has to compete with brokers and wholesalers with large direct volumes now available to them. There is no hierarchy of avocado handling during this Mexican deal. I am sure the hopes of all the CA handlers is that order will be restored when the CA crop comes in, but that hope may not pan out. The market is growing faster than demand is this year and it may be like this for some months. Avocado industry needs to convince retailers to lower their prices in order to move more fruit through the system faster. Currently the retailers are keeping prices high and buying at the lower mark, leaving them a nice return. I'm sure its difficult to let that position go but in the spirit of partnership, they need to adjust to help the overall picture improve.

San Luis Obispo  |  December, 27, 2012 at 09:36 AM

I agree with you Mike, but good luck with chain store support when supplies increase. Look what they have done to the tomato business. They will not pass lower prices on to the consumers

January, 03, 2013 at 09:50 AM

We're just a small natural foods store in Massachusetts but avocados are our #1 selling item in the produce department, selling about 1000 pieces a week (organic only).

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