Avocado markets soar as California harvest declines
Avocado markets soar as California harvest declines
The most remarkable thing about the 2004-05 avocado season to date, many would agree, is that there have been weeks when the total volume of avocados in the U.S. marketplace has been much higher than the market could have absorbed just a few short years ago, and yet prices have remained remarkably strong.
As Chilean imports have increased and Mexican access to the U.S. market has expanded from 31 states for six months to 47 states for 12 months, the demand for avocados has apparently more than kept pace with the increased volume.
This summer, the California crop, which shippers had hoped to harvest at a steady, managed pace through October, began to taper off in volume sooner than anticipated. Chilean fruit had not yet begun to arrive, and Mexican imports were insufficient to take up the slack. Consequently, market prices, which had already been strong at around $25 a box, soared to more than $40.
It is a condition unlikely to be replicated next year, as there are early indications of a much larger California crop in 2006.
Chilean arrivals this year began in late July, but significant volumes of fruit were not expected to arrive until September.
Although Mexico ships year round, import volume from Mexico has not been heavy this summer. The new crop was expected to begin coming up in greater volume in September.
Between Chile and Mexico, followed by the start of California's new crop around year's end, adequate volume to satisfy demand should be available from September on, and probably right through next summer.
California's production "has been down somewhat from previous years," Phil Henry of Henry Avocado Corp. in Escondido, CA, said in late July. "The crop has been a little bit lighter than anticipated, so it has driven prices up somewhat.
The crop was "a little bit overestimated, so the harvest rate was probably a little bit too aggressive from about March through May, he said. "Then as we got into early summer, the supply started to tighten up some.
"I think overall & quality has been very good during the California season said Ross Wileman of Mission Produce Inc. in Oxnard, CA. "But we expected a larger crop when we originally did the forecast, and it hasn't materialized. It is substantially less than we anticipated, and that has created problems from a marketing standpoint.
There will probably be "less volume for the months of August and September than anticipated, he said. "We are waiting for Chile to really get going on their season to fill that void.
The California crop "was badly overestimated, said Steve Taft of Eco Farms Avocados Inc. in Temecula, CA. The original estimate "was adjusted down in mid-season to 348 million [pounds]. & I see absolutely no possible chance that we will hit even close to that number. My guess is that it will be 300 [million] to 310 [million].
It is surprising that the California Avocado Commission's estimate was so far off this year, Mr. Taft said, because historically "they have locked in on it really good year in and year out.
The California season started off with "a lot of volume [moving] at moderate pricing, said Dana Thomas of Index Fresh Inc. in Bloomington, CA. But in early May, "we came to realize that the crop was shorter than anticipated, and that realization has forced the prices up. & We anticipate that California volume will taper off fairly quickly and that prices will probably stay relatively high until Chilean volume takes up the slack.
"We're looking at some low-volume, relatively high-priced periods the next six to eight weeks, but then it should get back into very promotable levels possibly beginning about the second week of September. Industrywide, "we have seen demand shift upward this calendar year, he said. In the past, 15 million to 16 million pounds of fruit a week moving into the U.S. market was considered "the upper level, but this season there have been weeks when 17 million to 19 million pounds of fruit have moved into the market "from all sources without weakening prices.
"The California season has been a real surprise to all of us, said Bob Lucy of Del Rey Avocado Co. in Fallbrook, CA. "There is actually about 15 percent less fruit than we had originally thought, and that is really significant because we got a late start due to the amount of Chilean fruit in the market through January.
"The year-round Mexican situation really scared us, Mr. Lucy said. "But the Mexicans were very controlled. Their growers were very disciplined in how much fruit they sent into the United States. As a result, "we were getting prices in March, April and into May that were around $25, and we were very pleased with that.
But around mid-April, "we started to realize this crop isn't as big as we thought it was. After May, prices climbed to around $40 a box, even though the volumes being harvested were still very good, he said.
Significantly, with aggregate volume in the 16 million to 18 million range, prices held in the $25 to $30 range, "and that is pretty darn good, he said. Five or 10 years ago, he would have expected $8 to $10 a box with that volume. "So tremendous growth has occurred in our industry.
Guy Whitney, director of industry affairs for the California Avocado Commission, was not convinced in early August that the commission estimate was that far off. "It is tracking right now at 342 million pounds against an estimate of 348 million pounds, he said. But because growers were fearful of how much fruit Mexican exporters might send to the United States after April 15, at a time that they had never been allowed to ship before, "there was a sense that we needed to keep the harvest moving, he said.
Rob Wedin of Calavo Growers Inc. in Santa Paula, CA, agreed that the harvest "is tracking great. "But I think what you are hearing from the other handlers and myself is we're coming to an end much quicker than anticipated. We just think we are running out really early.
Overall for the 2004-05 marketing season, which runs Nov. 1 through Oct. 1, Mr. Whitney expects that Mexico will have shipped about 300 million pounds of fruit, and Chile, with a similar-sized crop to last year, will have shipped about 255 million pounds.
Mexico, "to their credit, has shown "a great deal of discipline, Mr. Whitney said. "I think the market has been quite lucrative for them, and they realize that by exercising some discipline "they will not cause the market to collapse, "which could be very costly to them.
(A full report on avocados appears in the Aug. 15 issue of The Produce News.)
As Chilean imports have increased and Mexican access to the U.S. market has expanded from 31 states for six months to 47 states for 12 months, the demand for avocados has apparently more than kept pace with the increased volume.
This summer, the California crop, which shippers had hoped to harvest at a steady, managed pace through October, began to taper off in volume sooner than anticipated. Chilean fruit had not yet begun to arrive, and Mexican imports were insufficient to take up the slack. Consequently, market prices, which had already been strong at around $25 a box, soared to more than $40.
It is a condition unlikely to be replicated next year, as there are early indications of a much larger California crop in 2006.
Chilean arrivals this year began in late July, but significant volumes of fruit were not expected to arrive until September.
Although Mexico ships year round, import volume from Mexico has not been heavy this summer. The new crop was expected to begin coming up in greater volume in September.
Between Chile and Mexico, followed by the start of California's new crop around year's end, adequate volume to satisfy demand should be available from September on, and probably right through next summer.
California's production "has been down somewhat from previous years," Phil Henry of Henry Avocado Corp. in Escondido, CA, said in late July. "The crop has been a little bit lighter than anticipated, so it has driven prices up somewhat.
The crop was "a little bit overestimated, so the harvest rate was probably a little bit too aggressive from about March through May, he said. "Then as we got into early summer, the supply started to tighten up some.
"I think overall & quality has been very good during the California season said Ross Wileman of Mission Produce Inc. in Oxnard, CA. "But we expected a larger crop when we originally did the forecast, and it hasn't materialized. It is substantially less than we anticipated, and that has created problems from a marketing standpoint.
There will probably be "less volume for the months of August and September than anticipated, he said. "We are waiting for Chile to really get going on their season to fill that void.
The California crop "was badly overestimated, said Steve Taft of Eco Farms Avocados Inc. in Temecula, CA. The original estimate "was adjusted down in mid-season to 348 million [pounds]. & I see absolutely no possible chance that we will hit even close to that number. My guess is that it will be 300 [million] to 310 [million].
It is surprising that the California Avocado Commission's estimate was so far off this year, Mr. Taft said, because historically "they have locked in on it really good year in and year out.
The California season started off with "a lot of volume [moving] at moderate pricing, said Dana Thomas of Index Fresh Inc. in Bloomington, CA. But in early May, "we came to realize that the crop was shorter than anticipated, and that realization has forced the prices up. & We anticipate that California volume will taper off fairly quickly and that prices will probably stay relatively high until Chilean volume takes up the slack.
"We're looking at some low-volume, relatively high-priced periods the next six to eight weeks, but then it should get back into very promotable levels possibly beginning about the second week of September. Industrywide, "we have seen demand shift upward this calendar year, he said. In the past, 15 million to 16 million pounds of fruit a week moving into the U.S. market was considered "the upper level, but this season there have been weeks when 17 million to 19 million pounds of fruit have moved into the market "from all sources without weakening prices.
"The California season has been a real surprise to all of us, said Bob Lucy of Del Rey Avocado Co. in Fallbrook, CA. "There is actually about 15 percent less fruit than we had originally thought, and that is really significant because we got a late start due to the amount of Chilean fruit in the market through January.
"The year-round Mexican situation really scared us, Mr. Lucy said. "But the Mexicans were very controlled. Their growers were very disciplined in how much fruit they sent into the United States. As a result, "we were getting prices in March, April and into May that were around $25, and we were very pleased with that.
But around mid-April, "we started to realize this crop isn't as big as we thought it was. After May, prices climbed to around $40 a box, even though the volumes being harvested were still very good, he said.
Significantly, with aggregate volume in the 16 million to 18 million range, prices held in the $25 to $30 range, "and that is pretty darn good, he said. Five or 10 years ago, he would have expected $8 to $10 a box with that volume. "So tremendous growth has occurred in our industry.
Guy Whitney, director of industry affairs for the California Avocado Commission, was not convinced in early August that the commission estimate was that far off. "It is tracking right now at 342 million pounds against an estimate of 348 million pounds, he said. But because growers were fearful of how much fruit Mexican exporters might send to the United States after April 15, at a time that they had never been allowed to ship before, "there was a sense that we needed to keep the harvest moving, he said.
Rob Wedin of Calavo Growers Inc. in Santa Paula, CA, agreed that the harvest "is tracking great. "But I think what you are hearing from the other handlers and myself is we're coming to an end much quicker than anticipated. We just think we are running out really early.
Overall for the 2004-05 marketing season, which runs Nov. 1 through Oct. 1, Mr. Whitney expects that Mexico will have shipped about 300 million pounds of fruit, and Chile, with a similar-sized crop to last year, will have shipped about 255 million pounds.
Mexico, "to their credit, has shown "a great deal of discipline, Mr. Whitney said. "I think the market has been quite lucrative for them, and they realize that by exercising some discipline "they will not cause the market to collapse, "which could be very costly to them.
(A full report on avocados appears in the Aug. 15 issue of The Produce News.)
