Avocados see high prices in tight supply - The Packer

Avocados see high prices in tight supply

06/10/2011 10:24:00 AM
Andy Nelson

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.

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