Packer Insight - Avocado strike resolved, supply still recovering
( File photo )

CORRECTED: Mexican avocado shipments will be crossing into the U.S. in earnest Nov. 17, after a late-October growers strike all but dried up the supply chain to retailers and foodservice operators in the U.S.

But it will likely by several weeks past that before the supply chain starts to normalize.

APEAM, the group that represents growers and packers of avocados for export markets, announced an agreement with growers on Nov. 14.

The strike lasted more than two weeks, causing an estimated deficit of 73 million pounds of exports to the U.S., according to Ramon Paz, spokesman for APEAM, which represents exporting packers of avocados in Michoacan. However, there still is 30 weeks before the harvest ends in July, and shipments might catch up to previous estimates, he said.

“We are now working on estimates for the rest of the season,” Paz said on Nov. 15. “The fruit is on the trees, and our total production estimates have not changed. We will be able to provide a revised export estimate by the end of next week.”

While the harvest has started, representatives of U.S. importers who own packinghouses in Michoacan have said that it may take up to a week for supplies to hit U.S. store shelves. Importers plan to skip the ripening process for some shipments, avoiding a 3-4 day delay. Bags and custom packs will be scarce as shippers focus on bulk displays to expedite fruit shipments to retailers faster.

“The first avocados will reach the border this weekend,” Rob Wedin, vice president of sales and marketing for Calavo Growers Inc., Santa Paula, Calif. said Nov. 14. “Many, many more will be needed to get supplies back to normal.

“This will take weeks,” Wedin said. “Many avocados will not be ripened until after Thanksgiving.”

A statement from APEAM said the agreement was reached after a Nov. 13 meeting involving the association growers and several Mexican government agencies. Growers agreed to remove all roadblocks that kept harvest and packing activities from happening.

According to the statement, packers have agreed to improve communication about market conditions to growers, and increase transparency about prices, marketing costs and margins.

Growers had requested a floor price on the fruit, but packers, importers and representatives of the Mexican government said that was not allowed by law.

“The transactions between growers and packers will continue to be individual and based on market dynamics; not on any type of set pricing,” according to the statement. “Throughout this process, APEAM maintained the interests of its two sectors (growers and packers) as the priority, while always respecting and abiding by the law.”

 

Lost opportunities?

Paz said some promotions and ads for Mexican avocados in the U.S. were cancelled, and many were delayed.

“We are currently working with retailers to restore their confidence in our programs and to reschedule our programs,” he said.

The industry will focus on supplying the U.S. and other exports markets and “regaining the trust and preference of its customers,” according to the APEAM statement.

Paz and U.S. importers refuted claims from the striking growers — repeated in media in Mexico and the U.S. — that the root of the growers’ complaints about returns came from avocados from outside Michoacan and illegally packed and shipped to export markets, essentially creating a black market that devalued legitimate fruit.

According to Paz, laws dictate that fruit grown outside Michoacan can be packed and shipped in that state only if:

  • The fruit is sold in Mexico;
  • The fruit is exported to countries allowing non-Michoacan avocados, including Canada and China — but not the U.S.; and
  • The fruit is for processing.

“Fruit from those other states do not go for export to the USA,” Paz said. “APEAM has no evidence that this may be happening.

“The origin and traceability of the fruit going to the USA is closely inspected and supervised by the 80-plus USDA inspectors who regularly work in Michoacan and also by SAGARPA inspectors and other third-party inspectors,” he said.

Note on correction: APEAM membership includes both growers and packers, with more than 24,000 growers and 52 packinghouses registered in the program.

 
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