Garth SearsSteady demand and a decreased supply of avocados is boosting prices, and retailers don't expect that to change anytime soon. As the 2010-2011 Mexican avocado season winds down, grower-shippers and officials report very strong demand, with some fruit fetching $2.50 a piece at retail.
“As we approach the end of the (Mexican) season, we’re seeing prices that are historic,” said Emiliano Escobedo, marketing director for Mexican avocado export group APEAM. “There’s strong demand all over the U.S. It really shows what the market is capable of.”
Volumes from all growing regions were running about 20% below last year in late May and early June, and they will likely stay low as June progresses, said Rob Wedin, vice president of sales and marketing for Calavo Growers Inc., Santa Paula, Calif.
Demand, meanwhile, is going up, Wedin said.
“There’s a surge of demand that comes on when the weather gets good,” he said. “There’s a lot of emphasis on Cinco de Mayo, but more and more we’re thinking it has to do with good weather.”
As would be expected, flat volumes and higher demand have meant rising prices in June, Wedin said.
With the 2010-11 Mexican deal winding down and a smaller California crop, prices will likely remain high until the 2011-12 Mexican and Chilean crops begin shipping, said Patrick Lucy, director of organic sales for Del Rey Avocado Inc., Fallbrook, Calif.
On June 7, the U.S. Department of Agriculture reported prices of $47.25-50.25 for two-layer cartons of hass 48s from California, up from $28.25-29.25 last year at the same time.
Despite the high prices, retail movement has not slackened, said Dick Spezzano, president of Spezzano Consulting, Monrovia, Calif.
“Retailers are telling me they’re loving it,” Spezzano said. “They’re getting good sales at high prices. It’s one of those fruits that, if you like it, you’ll pay the price.”
Spezzano hasn’t heard of any retailers canceling ripe avocado programs because of slower movement.
Restaurants are slow to change their menus, but this summer, they may have to make an exception when it comes to avocados, said Tim Kelley, product manager for Monterey, Calif.-based Pro*Act.
“I have no doubt there will be some modifications of menus,” Kelley said. “We’ve never seen an avocado market like we’re going to see this summer.”
While there have been some week-to-week volume increases in California, they are slight, Wedin said. That’s largely because growers are having trouble finding enough pickers, Wedin said. California volumes will start to fall by or before the end of August.
A bigger percentage of the California crop this summer will be lamb hass avocados, which are larger than traditional hass avocados, Wedin said. In July, about 10% of Calavo’s California fruit will be lambs, which typically peak on sizes 24-32.
Young lamb hass trees are producing a lot of fruit this year, he said.
Wedin reported outstanding quality and normal sizing on California avocados shipping in early June.
Sizing was running about a week behind because of cool growing weather, but by the week of June 6 sizes were peaking on 48s, and there was more large fruit available, Lucy said.
By the week of June 6, Mexico’s current-season crop was about 90% finished, Wedin said.
Chile would likely be the first new-season crop out of the gate, with light supplies in July and volume supplies slated to begin in August, Wedin said. Chilean shipments to the U.S. are expected to be 80% above last season’s off-year crop and similar to 2009-10 volumes, Wedin said.
Mexico should have a bigger avocado crop next season, with projections at about 660 million pounds, 7% more than this season, Escobedo said.
Mexican volumes this season will drop slightly through June before yielding to the new-season off-bloom crop in July, Escobedo said.
The wild card in the summer avocado deal could be Peru, Wedin said. The USDA, which has given preliminary approval to Peruvian avocado imports, is accepting comments on the ruling.
How soon Peruvian fruit could begin arriving is up in the air, but it would have an effect on U.S. volumes, Wedin said.
Lucy believes Peruvian product will likely be shipping by August.