Sources in the avocado industry differ on whether U.S. avocado volume will reach the projected volume increase over last year, but everyone seems to agree that 2018 will be a big one for avocado lovers.
Conventional avocado volume is projected to reach 2.275 billion pounds in 2017, according to the Mission Viejo, Calif.-based Hass Avocado Board — a 90 million-pound increase from 2,189 billion pounds in 2016.
“We’re in really good shape through the first six months (of 2017),” Emiliano Escobedo, executive director, said in late July.
Those figures include avocados from California, Peru, Chile and the Dominican Republic.
But some major avocado grower-shippers aren’t so optimistic.
Rob Wedin, vice president of sales and marketing for Calavo Growers Inc., Santa Paula, Calif., and Robb Bertels, vice president of marketing for Mission Produce Inc., Oxnard, Calif., both estimated that volume actually could be down about 5%.
The 2017 calendar year will be down because volume from California and Mexico were down during the first half of the year, though Peru imports were up, Bertels said.
He said the 1.7 billion pounds imported from Mexico for the crop year ending in June was off from the original estimate of almost 2 billion pounds.
U.S. Avocado volume had been climbing an average of about 15% over the past 10 to 15 years, Wedin said.
“This year was the first year when the total supply dropped,” he said.
Tight supplies brought high prices that weren’t expected to drop for several weeks.
As supplies of California and Peruvian fruit taper off in late August and into early September, it will be a demand-exceeds-supply situation until Mexico’s aventajada crop starts ramping up in the fall, Wedin said.
Though July and August have been “kind of weak,” Wedin expected better things in September.
“The regular crop that’s on the trees that starts around September looks good,” he said.
California’s 200-million-pound crop was about half the size of last year’s, and that helped prompt “somewhat of a sluggishness” at retail, said Bob Lucy, partner in Del Rey Avocado Co. Inc., Fallbrook, Calif.
That wasn’t surprising, he said, since f.o.b. prices were in the range of $40 to $50 per box.
As of July 31, the U.S. Department of Agriculture reported f.o.b.s for avocados crossing from Mexico through Texas at $57.25-60.25 for two layer-cartons size 32s to 48s, with size 60s $48.25-55.25 and size 70s $42.25-50.25. F.o.b.s for most sizes of avocados from Mexico had been in the $40s throughout July.
Mexico’s next crop starting in September was expected to significantly boost supplies.
“We think that once Mexico gets really cranked in October and November, we’ll see prices that are in a little more attractive price range — maybe in the $30s,” he said.
When supplies are tight, prices are driven by growers, said Paul Weismann, president of Healthy Avocado Inc., Berkeley, Calif.
“It makes it difficult for packers to offer promotional programs for retail chains,” he said.
Once supplies pick up, he said, “It remains to be seen how high the growers can push the price and still move 1,000 or more trucks per week.”
He also wonders how much retailers will reduce prices when f.o.b.s start to drop in the fall.
“A big profit margin on avocados helps balance the lower margin on other fruits and the tiny margins retailers have to manage on non-produce items,” he said.
Mexico will hit its stride after Labor Day, Bertels predicted, with 45 million to 50 million-pound weeks.
“We’ll finish the year pretty strong,” he said.
And 2018 is expected to be good, too.
“There’s going to be a lot more fruit available from California next year,” he said, with early projections ranging from 400 million to 425 million pounds.
Peru doubled its exports to the U.S. this year compared to 2016, said Xavier Equihua, CEO of the Washington, D.C.-based Peruvian Avocado Commission.
Peruvian growers will export 140 million pounds of avocados to the U.S. this summer, compared with 70 million pounds last year, he said. And he predicted that next year’s crop will be even larger.