Mexico avocados resume full production
Short supplies and high prices on avocados could ease soon, as a production stoppage in Mexico has come to an end.
APEAM — the Avocado Producers and Exporting Packers Association of Michoacan, which represents exporters — projected 40 million pounds of avocados would be shipped to the U.S. the week of Oct. 16.
Mexico volume had fallen sharply to 13.7 million Oct. 9, according to the Hass Avocado Board.
“The interruption in harvesting was driven by internal industry issues that have been addressed with mediation by the Michoacán state government and the Mexican Department of Agriculture,” APEAM said in a statement. “The primary issue revolved around sales negotiations between the growers and packers.”
Rob Wedin, Calavo Growers vice president of sales and marketing, said growers had eight demands, some of which were “more realistic” than the others.
“The industry generally sensed that a minority of growers had their people pretty excited,” Wedin said. “Expectations were high because there was a new administration at APEAM. The frustration boiled over and the result was basically zero production for a week or more.”
Harvesting slowed during the past month, said Bob Lucy, partner in Del Rey Avocado Co., Fallbrook, Calif.
“Prices growers were getting paid, which were very nice, started to slide as more volume came into the marketplace,” Lucy said. “As prices slid, growers did a slowdown in the field. They wanted to set higher prices. There’s nothing wrong with that. All of us favor growers getting more money.
“But they were trying to set prices for the next few weeks or months, and that’s real challenging,” Lucy said. “Many of the packers and marketers were saying that may not work. We are a commodity, and commodities are ruled by supply and demand.”
Wedin agreed.
“Everybody is trying to do a better job,” he said. “But fixing price or fixing volume are hard to do, both legally and horticulturally,” he said “We’re still in a supply and demand situation. The market speaks loudly.”
Two-layer cartons of Mexican hass avocados crossing through Texas shipped for $64.25-66.25 Oct. 11, the last date for which supplies were sufficient to establish a market, according to the U.S. Department of Agriculture. Year-ago prices were $17.25-21.25. Month-ago prices for most sizes were $55-60; 84s were $36.25-38.25.
“The growers have come to some agreement and are picking avocados now,” Robert Pena, salesman at Oxnard, Calif.-based Freska Produce International LLC, said Oct. 17. “There’s going to be an influx in the next week.”
“There are a lot of upset retailers,” said Pena, who expects prices to begin coming down. “I think it’s going to come back and bite the growers. When they get long, have a lot of stuff and need help, the retailers may not be so nice about it.”
“It was very frustrating to retailers,” Lucy said. “They were looking for Mexico to be the major supplier of avocados in the fall. When many of us told retailers that instead of X, you’ll get half of X, it was pretty frustrating. All of us, including retailers, realize growers need to make every dollar they can. But we need to make sure we’re realistic on what prices can be maintained to move a volume of crop through the system, whether it’s avocados or apples.”
Anecdotal evidence on pricing varies somewhat from the last available USDA numbers.
“The San Francisco and South San Francisco wholesale markets were fetching up to $130 a case for what was left of California fruit,” Pena said. “Because Mexico wasn’t coming over, someone was smart enough to hold onto some pallets. Whatever they had left, they cleaned up. They got really good dollar value on California fruit.”
Some suppliers turned to other countries of origin during the slowdown.
“It’s been a real opportunity for Chilean growers to fill a short term gap,” Lucy said. “Many of us have brought in a few more containers from Chile than we initially planned.”
Berkeley, Calif.-based Healthy Avocado reported Oct. 17 that in the prior two weeks, growers stopped movement of avocado trucks from the field to the packinghouse.
Offices of Sanidad de Vegetal, which issues phytosanitary certificates, were forced to close.
According to Healthy Avocado, proposals within the Mexican industry included:
- a set seasonal price, with growers in Tancitaro proposing 80 pesos per kilogram;
- payment in U.S. dollars rather than pesos;
- shared benefits of a per-box import assessment;
- greater transparency and reliability in crop estimations; and
- a better price for avocado cutters.
Wedin said APEAM and SAGARPA, Mexico’s agriculture department, were involved in the negotiations to resume movement.
“We tried to get an agreement at the packer level. That’s the extent of our impact,” he said. “We had growers who wanted to get going, and as soon as they were ready, we were ready to take their fruit. But sometimes security is a little thin. When security got too thin, we discontinued sending crews and waited for a better day. Politics are played a little rougher than they are here.”
