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Industry Report

As the second week of September begins, the Avocado market continues to get closer and closer to stable ground. Overall demand and quality remain good, but there are still high inventory levels, preventing the market from reaching a balanced level of supply and demand. The last two weeks of August saw a combined total of 111 Million lbs. enter the US market. This was incommensurate with the August price levels; pricing has now adjusted and fruit movement has improved. 

The week before labor day weekend saw a major drop in volume -- just 39.6M lbs. entered the market -- the lowest one-week total in months. Last week’s total volume was about 45M lbs. up 12% v. the prior week. Taking a closer look at last week’s supply of the 45M lbs. in the market, Mexico accounted for 2/3 of the supply with 30M lbs., Peru added 10M, California 3.2M and Chile 1.5M.* 


Peru

Peruvian avocado arrivals were about 10 million lbs. last week and were heavy to the East Coast; approximately 70% of Peru arrivals were in the Northeast and Southeast. In addition, Peru arrivals were down 27% copared to the previos week. This trend will continue throughout September. As the season ends around the first week of October; each week there will be less and less arrivals. Quality remains good; fruit is eating and ripening well. It is Peru's mid to late season, so there are more mature and higher quality avocados than any other time of the season. Sizing remains heavy to 36s, 40s, and 48s.

Mexico

Mexico sent 30 million lbs. to the market last week and although it was an increase compared to last week, it was still a relatively light week for Mexico. Older fruit in inventory has moved and retailers are seeing more consistency out of Mexico in regards to price, quality and freshness. Sizing is heavy to 48s, 60s and 70s with larger fruit being undersupplied. Pricing and volume should be steady in the coming weeks. 

California

California avocado season in its final weeks; volume is dropping off and will continue to decrease though some growers in the far north regions of San Luis Obispo county are still harvesting excellent quality fruit. Pricing has adjusted to markets; the premium California often enjoys has been reduced as many retailers have moved to other countries of origin. Some chains and food-service distributors have remained on California Avocado programs and there is enough fruit in the market to support those through the end of September. 

Chile

Chilean Avocado volume was light last week but will be increasing steadily with easy passing week. Many large chain-stores will make the transition from Peru to Chile in the coming weeks and volume from Chile will be good throughout the Fall. 

Final Thoughts

Last week 3,000 stores nationwide promoted Avocados with an average price of $1.25 per piece.** While the pricing is pretty attractive to consumers, the total store count is just too low to move the volume the industry currently is sitting on. All FOB pricing – no matter country of origin - is easily promotable at this time and the industry is relying on some strong retail support of the category looking ahead to the second-half of September. Quality is excellent and demand for Avocados remains very good. Now that markets are more stable and predictable, the general atmosphere of the market will improve. 



*Source: HAB

**Source: USDA