Demand to stretch Cinco de Mayo avocados - The Packer

Demand to stretch Cinco de Mayo avocados

04/02/2012 03:30:00 PM
Andy Nelson

Pamela RiemenschneiderBoth California and Mexico will be shipping large volumes of high-quality avocados for Cinco de Mayo, but very strong demand will tighten supplies and could send prices up.

There will be plenty of avocados shipping for the holiday, but demand has been so strong, there may not be enough to adequately meet it, said Ross Wileman, vice president of sales and marketing for Mission Produce Inc., Oxnard, Calif.

In late March, the industry was shipping about 30 million pounds a week — “big numbers,” Wileman said — yet supplies were still tight and prices were slightly rising.

In addition, rain the week of March 26 in California and a long work holiday in Mexico preceding Easter, April 8, would slow movement temporarily, Wileman said.

And those tight markets will likely still be around in the runup to Cinco de Mayo.

“It won’t be a disaster by any means, but there may not be the supply levels everybody thought there would be at the beginning of the season,” Wileman said.

Cinco de Mayo volumes likely will be about 20% higher than they were last year, but marketers still will have to hustle to fill all orders, said Rob Wedin, vice president of sales and marketing for Santa Paula, Calif.-based Calavo Growers Inc.

“Demand has just been tremendous, significantly stronger than March 2011,” Wedin said. “It’s a real challenge keeping supplied. Fruit is just flying out the door.”

Mexican volumes for Cinco de Mayo will likely to be similar to late March volumes for Calavo, but California volumes should be three times as large, Wedin said.

But even with all that extra fruit, many retailers will have to promote carefully.

“It’s promotable, but there won’t be blockbusters,” Wedin said. “I think we’ll be OK, but what we have to do is make sure we’re priced correctly.”

About half of the avocados shipping in the U.S. for Cinco de Mayo will be from California, about half from Mexico, Wileman said.

Sizing was on the small side at the end of March, but recent rains should help fruit grow, Wileman said.

On March 28, the U.S. Department of Agriculture reported prices of $32.25-34.25 for two-layer cartons of avocados 48s from California, down from $48.25-50.25 last year at the same time.

Prices were high last spring because of very low California supplies. The 2011 California crop was less than half the size of the 2010 crop.

Mangoes

While avocados could be short in some U.S. markets for Cinco de Mayo, the same won’t likely be true for mangoes, said Liz Lizarraga, saleswoman for Nogales, Ariz.-based Diazteca Co.


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