US: Uneven supplies cause price fluctuations for Mexican avocados

Prices for avocados coming into the United States from Mexico have been volatile this season due to the way volumes of fruit have been entering the country. With Mexican growers sometimes holding back supplies in hopes of higher prices, the market has only just recently started to reach a stable point.

“Prices for avocados for most of the fall has been on sort of a roller coaster,” said Matthew Clark of Eco-Farms. “The price for avocados started the season at a higher-than-normal level and have been coming down from there. But every time the price reached a certain lower level, it seems like Mexican growers stopped picking a group of sizes in order to lift the price again.” Larger-sized fruit was in short supply earlier in the season, though those sizes are now more plentiful. Part of the reason for that early larger fruit shortage had to do with smaller fruit just being more prevalent early on, but much of it had to do with varieties early on that don't produce the percentage of larger sizes that were in demand. Growers were also attuned to what the market wanted and used that to gauge how much to sell.

“Mexican growers want a certain amount of money for their fruit, so they wait for a better market,” said J.R. McDaniel of McDaniel Fruit Company. “I expect the price for a carton of avocados to stay where it's at right now, but it's difficult to tell because Mexico can bring so much fruit if they want.” The stability in prices is likely due to slow movement for the month of November, when demand for avocados typically reaches its nadir for the year. But with the Superbowl around the corner, demand will increase in January. Price points are hard to predict because prices could come down if a lot of fruit is shipped in anticipation of demand. Mexican growers know that and will likely try to ship just enough fruit to get the best prices while exhausting their supplies by the end of the season. The balancing act is one made all the more difficult by the increasing presence of Peruvian fruit.

“Peru has been in the market for four years, but it's only been the last two years that it has shipped significant volumes,” said Clark. “They shipped 140 million pounds last season, and there's talk they could ship up to 300 million pounds in 2015.” Peruvian imports arrive in June, and volumes from California start increasing around April, so competition for Mexican avocados will increase as the year progresses.

“If Mexican growers try to manage the price too much, we have to raise prices. But if they flush the market before Peru comes in, we have to go to the other extreme,” said Clark. “In the end, as distributors and suppliers, we prefer a stable market because stable markets allow us to plan ahead and keep everybody – both growers and customers – happy.”

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