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Eco Farms Avocado Market Update

ECO FARMS AVOCADO MARKET UPDATE- MAY 10 2019 

The Avocado market continues to adjust with less supply coming from Mexico and a reduced harvesting pace in California. Overall, last week volume was down 14% v. the prior week. Just 37.5 million lbs. entered the US market last week, the lowest one-week total in 2019. Mexico send 29 million lbs. last week, California harvested 7.3 million lbs. and Peruvian arrivals were 1.2 million lbs.* After heavy volumes in early April, volumes have really been light these last few weeks- while this can be explained partially by higher inventories in April, another likely reason is that Mexico and California have a little less fruit than previously expected. More volume will be needed in the coming weeks in order to keep up with demand as Memorial Day weekend promotions will begin in just a couple weeks.Last week saw 16,151 stores on Ad last week with an average price of $1.20 per piece. While 2018 saw more overall stores and a lower price - 19,237 stores at 88 cents per each- these are still very good numbers and the retail support for the category remains strong.** Higher FOBs no doubt limited what some retailers were willing or could do, but consumers see a real value in Avocados not just when the price is low. With good quality and supplies, as well as effective and well-strategized consumer-driven promotions, the category did well during this past promotion. The industry is very appreciative of the promotional boards efforts to drive demand at the retail level. 

California

California growers harvested 22% less fruit last week than the prior week- just over 7 million lbs. However, with a 19% market share, California is keeping the market supplied particularly with West coast retailers and food-service chains- not much fruit is heading outside the Western States. With volume down this past week and this week’s volume expected to be about the same, it is becoming evident that California may only have a minor role to play in the market for the coming months. Growers will likely harvest at a slow but steady pace in May and June and likely drop off by mid to late July. On the other hand, cool weather for most of April and so far in May has also allowed many growers to have less urgency to harvest, perhaps those growers who were waiting to harvest will get going in the coming weeks. Stay tuned for updates but California’s light crop- which was expected heading into 2019- will certainly be a major factor in the market in the coming months. 

Mexico

Mexican Avocado imports were 29 million lbs. last week, good for a 77% market share last week. Mexico is still the market leader by far, but with less volume left on the trees and lower shipments for several weeks now, it appears Mexico will not have large volumes in May. Pricing is certainly higher this week than it was a couple weeks ago and that is 100% driven by lower supplies. Time will tell how much fruit makes its way to the US market, but likely it will be in the 29 to 32 million lbs. range for the coming weeks. The market probably need about 40 million lbs. (about 1,000 truckloads) based on demand, but Mexico probably won’t be able get that number in the coming weeks.

Peru

Peruvian Avocado imports were 1.2 million lbs. last week, still very limited as the season is still just started. Volumes will increase by the end of the month and it appears Peruvian Avocados will be very important to the US supply picture if Mexico and California are a little light. Look for the weekly volume to increase to 4-6 million lbs. by the end of May as the season ramps up. 

Organic 

AvocadosOrganic Avocados continue to be in very short supply, with Mexico having very limited Organic availability and the market being almost exclusively dependent on California. Pricing is reflecting this lower supply with pricing in the low to mid $60s and rising. 

Final Thoughts

The US market has not seen this light of volume in a 3-week period in a very long time. Pricing will likely increase in the coming weeks with no major increase in supplies expected. Mexico may have more fruit once the flora loca/off-bloom harvest begins, but that will not be until late June/early July. Things could be a little challenging until then but the industry will rely on California and Peru will help fill the supply gap, but not certain that will be sufficient. Hopefully pricing remains predictable and steady and Mexico finds some additional volume on their late-season crop as demand for Avocados remains very good.Have a great weekend!


*Source: Hass Avocado Board 

**Source: USDA