Price gap closes for organic avocados - The Packer

Price gap closes for organic avocados

03/28/2014 10:43:00 AM
Tom Burfield

Organic fruit only accounts for about 7% of California’s avocado crop, according to the Irvine-based California Avocado Commission, but many growers say they’re experiencing growth in the category every year.

“There’s continued interest in organics, and we’ve got growers who continue to devote acreage to it,” said Jan DeLyser, the commission’s vice president of marketing.

Pricing on organic avocados continues to be higher than conventional, but to some extent, the gap is closing, said Steve Taft, president and chief executive officer of Eco-Farms Corp., Temecula, Calif.

Labor remains costly, and fertilizer has become more expensive, he said, but the cost is “not as dramatic as it once was.”

Meantime, he said, demand seems like it’s still growing, not tapering off.

Most organic avocados come from California and Mexico, he said. Chile does not produce many organic avocados, and so far Peru has not sent many to the U.S.

Price rise possible

Tight supplies of organic avocados this spring and summer “could send pricing through the roof,” said Dave Fausset, national sales manager for Mission Produce Inc., Oxnard, Calif.

Some growers go back and forth between organic and conventional avocados depending on the trend they see, he said.

If they can get returns on organic that are up to 50% greater than those on conventional fruit and not suffer significant yield losses, growers will go organic, he said.

“But if their margin erodes, they may switch back to conventional to get the yields back,” he said.

That would enable them to earn greater returns on the higher yields.

“It’s going to be a real dogfight, especially May through August, when Mexico is out (of the avocado deal),” he said. “It’s going to be a very tough market.”

With about 20% of its volume dedicated to organics, Del Rey Avocado Co. Inc., Fallbrook, Calif., is one of the state’s leading organic avocado growers.

“We have a very large market share in organic in California, and we’re very proud of that,” said partner Bob Lucy. “It carves out a very nice niche for us and for our growers.”

Retail support is an important factor in the growth of the organic category, said Bruce Dowhan, vice president of
The Giumarra Cos., Los Angeles, and general manager of Giumarra Agricom International LLC in Escondido, Calif.

Mainstream retailers now often offer organics, not only specialty chains, he said, and that has exposed the category to more consumers.

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