With the strike from the Mexican avocado growers over, avocados are pouring into the U.S.
Photo: Stonehill Produce Inc.
“Avocados are oversupplied after the strike,” notes Keith Slattery of Stonehill Produce Inc. in Capistrano Beach, Ca. “The first week the floodgates opened and they sent 70 million lbs. The week after, more than 50 million lbs. Last week was the first week it was down, but supply still exceeded demand. I think we were on track for 45 million lbs. last week, but there’s a lot of fruit around at the border.”
Avocado growers in Michoacán, Mexico went on strike at the end of October over prices being paid for the popular fruit. Growers stayed on strike for more than two weeks and as a result, production is pushed back on an already sizeable Mexican crop. “They have a big crop—2.1 billion lbs. is this year’s crop estimate that runs through June,” says Slattery. “They’re now a couple of months behind so you have a lot of growers down there that want to get their fruit harvested. Because if it doesn’t, it’ll drop.”
Photo: OTC Produce LLC.
Ageing concerns
Because the overall crop is behind schedule, fruit (on average) is more mature than normal and shelf-life could become a concern. As the oil content continues to increase, shelf-life typically decreases.
Jorge Mardones adds there are some sizing issues as well. “The fruit is smaller,” says Mardones of OTC Produce LLC. based in McAllen, Tex. “Fifty percent of it are 48s like always. But there aren’t too many 40s, 36s and 32s. There are a lot of 60s and 70s and 84s aren’t being harvested now because there’s no price for those small sizes.”
On top of the Mexican crop, Mardones adds that fruit from the Dominican Republic and domestically, Florida, is currently available. “Chile thought they might be able to take advantage of a small window with the strike. But as soon as it was over and Mexico began sending fruit, that closed up quickly,” says Slattery.
Photo: Stonehill Produce Inc.
California starts
"Meanwhile, the California 2019 crop will be down significantly,” says Slattery. “One year you get really heavy volume and the next year it’s light. This year’s estimates are around 150-175 million lbs.”
For now, to move those avocados, Mardones notes that demand for avocados is slow. “There are just many avocados available,” he says, noting that in 2019, demand will build as the calendar makes its way towards two major avocado consumption days: the Super Bowl and Cinco de Mayo.
Photo: OTC Produce LLC.
Pricing pressures
Adding these events together makes for pricing that Mardones describes as horrible. “Last year a normal box in December for 48s was $27-$30. Today we hope to get $18-$19. A good price is $20. Every day is going down further,” he says.
Slattery adds that during the strike, some wholesale markets were selling avocados for as high as $60/box. “We’re seeing the bottom of pricing right now,” says Slattery. “I think over the next two to three weeks, we’ll see prices slowly edge up. I think we’ll stay in the low to mid-$20s FOB range in Texas depending on size.”
For more information:
Keith Slattery
Stonehill Produce Inc.
Tel: +1 (949) 488-9613)
slattery@stonehillproduce.com
www.stonehillproduce.com
Jorge Mardones
OTC Produce LLC
Tel: +1 (956) 651-4501
jmardones@otcproduce.com