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"There's no shortage, but the perception of shortage is enough to drive up prices"

This has been a busy week for many of those who work in the produce business due to an increase in demand from retailers who are fighting to keep their shelves filled. While the current situation is anything but normal, for the avocado industry, high demand isn’t unusual. In Canada the pricing has gone up slightly more than it usually does around this time of year, but in the U.S. the prices are holding steady as suppliers are working to keep the market stable.
 
Higher than usual demand and pricing in Canada
Avocados Aguirre is an avocado packer based in Jalisco, Mexico. The company’s main export destinations are currently Japan and Canada. Juan Escorcia says: “We have seen an uptick in demand from Canada for the last two weeks. Our clients have been asking for more avocados than usual. There are two main factors for this. First, March and April have lower volumes of the Hass crop, and so the demand usually outweighs supply during this time. Secondly, people are trying to be healthier overall, especially with the current situation the focus on eating healthy, taking care of your body, and increasing your consumption of fruits and vegetables increases.”


Juan Escorcia and Efraín Escorcia at the PMA Fresh Summit, October 2019.
 
With the increase in demand coinciding with lower production, logically the prices have risen in Canada. “Usually around this time of year we see around a 30% increase in price over the other months of the year. But right now, the prices are up 40-45% so they’re even higher than usual. We expect the prices to continue to increase for the next 2-3 weeks in Canada,” Escorcia shared.
 
Fortunately, the new crop looks to be arriving early this year, Escorcia says. “Last year, we started harvest on the new crop on May 9th, but from what we are seeing in the orchards right now, based on the percentages of dry matter, it looks like we can begin harvesting in mid-April this year.” This should relieve the high demand and pricing.
 
Working to keep the US market stable
During this time of year, the majority of the US market is supplied by avocados from Michoacán, Mexico. Villita Avocados has farms in Michoacán and distribute their avocados throughout the US. Aaron Acosta, the company’s corporate relationship manager says: “Overall, we are continuing with our harvest as planned and want to ensure that we have ample supplies throughout the season. We always expect and prepare for a 15-20% increase for Cinco de Mayo, so we are going to stick with our normal harvesting plan and programs. Any additional volume requests would definitely drive a price increase at the field level and affect the total amount available at the end of the season, which isn’t in anyone’s best interest.”


 
Acosta points out that it is important to ensure the retailers and consumers that there are enough supplies. “We haven’t had a price increase yet, but if there is the perception that there might not be enough fruit that the tendency is to drive up the pricing. That is why it is important that we work to calm the industry and let them know that the avocados will remain available at the current projected volume,” Acosta says.
 
“We look forward for the other origins, such as Peru and California to begin, which will help complement the Mexican season. This will help alleviate this perception that there are pressures on the supply. But I would like to stress that there is no shortage, and we will continue to harvest as planned and continue to make on-time, in-full deliveries,” Acosta concludes.
 
For more information:
Juan Escorcia
Avocados Aguirre
Tel: +1 619 365 7694
Email: jescorcia@avocadosaguirre.com  
www.avocadosaguirre.com 
  
Aaron Acosta
Villita Avocados
Tel: +1 (956) 207-3428
Email: aaron@villitaavocados.com    
www.villitaavocados.com 


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