California and Mexico hope to avoid heavy avocado overlap
California and Mexico are both cautiously looking ahead at a potential heavy overlap in avocado supplies.
“We’re a little concerned about how long the Mexican season will go. If Mexico supplies above 45 million lbs. of avocados and California comes in with 15 million lbs., how do we market 60 million lbs. of avocados? This could be a real challenge,” says Bob Lucy from Del Rey Avocado in Fallbrook, Ca.
However it’s a matter of reaching a tipping point somewhat, says Lucy. “If Mexico goes down to 35 million lbs., we won’t have as much a problem,” he says. “It’s doable to market 50 million lbs. But 60 million could be a real challenge.”
Also waiting in the wings is fruit from Peru. “They’re waiting and seeing what market is better or more attractive to growers and shippers,” says Lucy. “If Europe looks strong, then they’ll send it to Europe but if Mexican volume drops down quite a bit, then you’ll see Peruvian fruit come into the U.S. in bigger numbers, like last year.”
Effect on pricing
And even with consistently climbing demand for avocados, prices have softened somewhat and are consumer-friendly. “Prices are good for growers and yet they’re not so crazy high that a retailer can’t do promotions,” says Lucy.
Interestingly, Lucy does worry about whether, when prices rise, if there’s a top off point on avocado pricing. “We used to think you had to have avocados under .99 cents to really move them. But this past summer when we were at $60-$70 a box for avocados, many of our retailers didn’t have a big drop off in demand. The consumer went from paying .99 cents to a $1.79 and didn’t really stop buying them,” he says.
Wait and see
Meanwhile both regions are readying themselves for what lies ahead. “If Mexico is at 45 million lbs., we can market this very well and the prices will be steady and we’ll have good promotion,” says Lucy. “The big challenge will be April-May. We’re hoping the Mexican volume stays a little bit lower as California increases so we can keep the prices good.”
For more information:
Del Rey Avocado
Tel: +1-(760) 728-8325
Publication date: 2/22/2018
Author: Astrid van den Broek
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