Avocado market softening through transition period

The avocado seasons are once again in transition. Mexico is transitioning to the Flora Loca crop, California is winding down and Peru's shipments to the US are also numbered. The supply situation has turned around from what it was a few weeks ago when there were shortages reported. There are more avocados in the market and supplies are now meeting needs more sufficiently.

"We are now well supplied here at the end of August and there is enough product in the market," said Mike Chirico of McDaniel & Chirico. "California is currently slowing down as it approaches the end of its season, while supplies from Peru are also easing. There are not many shipments left of Peruvian fruit."

Multiple Mexican seasons
Chirico said that part of the reason for the strong supply is that August and September are months when there are several avocado crops in Mexico in production at the same time. This makes things interesting when it comes to marketing the fruit and timing supplies. 



"Mexico have a very different crop schedule to other regions like California and Peru which generally have the one distinct season," he explained. "In Mexico there are several and this enables the country to produce avocados all year round. Currently, we are switching from the Negra to the Flora Loca crop. We also have the Aventajada starting shortly, followed by the Normal a bit later. The period from August into September sees a combination of crops overlapping, with as many as three in production at the same time. It is in a constant state of transition from an old crop to a new crop several times a year and presents plenty of opportunities, but also potential headaches."

Prices easing after strong period
The avocado market has been strong for a while, with short supplies due to weather events and good demand. Prices are now easing as Peruvian fruit has hit its peak and demand softens due to consumers seeking out other seasonal domestic fruits like stone fruit. There has also been more California and Mexico fruit entering the market than was previously thought. 

"The market is currently retreating off some very high numbers," Chirico observed. "There is a lot of Peruvian fruit around and California and Mexico fruit is still in good supply. At the same time there is increased competition from many locally grown summer fruits and vegetables. Avocados are one of the most interesting commodities in the world. Many countries produce it and it can be considered a true world crop. Despite this, it also has one of the most unstable markets making marketing very unpredictable."



Plenty of growth remaining
The avocado category has seen tremendous growth over the last few decades, with US consumption growing four-fold in just the last 15 years. It's now a mainstay in the supermarket and most suppliers agree that there is still room to grow. "We will continue to see lots of growth in the avocado market for the next ten years," Chirico said.

A path to this growth is through packaging and while the giro-pack is still the most common, some producers are trialing other options. "We have seen avocados in the market in standup pouches," Chirico shared. "Some of the avocado companies are testing them out. At this stage, we don't find it cost effective, however it is definitely something that we are monitoring."

For more information:
Mike Chirico
McDaniel & Chirico
Tel: +1 (716) 570-0025

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