With good promotion opportunities ahead, the avocado outlook through the balance of the year will be dominated by supply from Mexico, with significant volumes from California, Peru, Florida, the Dominican Republic, Chile and Colombia.
Last year, Mexico accounted for 58% of total U.S. supply in August, 73% in September, 86% in October, 90% in November and 91% in December. For all of 2020, Mexico accounted for 71% of the total U.S. avocado supply.
California in 2020 accounted for 20% of total U.S. volume in August, 14% in September, 7% in October, 3% in November and 1% in December. For the whole year, California accounted for about 13% of total U.S. avocado supply, including both U.S.-grown and imports.
In 2020, Peru accounted for 16% of total avocado volume in August and 7% in September, with no shipments reported in October and November and light volumes recorded in December.
Supply and market outlook
Mexican avocados crossing through Texas sold for $41.25-45.25 per carton for size 32-48s on Aug. 2, with smaller sizes ranging from $24-40 per carton, according to the U.S. Department of Agriculture’s Market News Service.
The same time last year, Mexican avocados crossing through Texas were $34-42 per carton for 32-48s, with smaller sizes trading at $20-33 per carton.
Recent U.S. Department of Agriculture data shows that avocado shipments from California are off about 35% year over year through July, said David Magaña, vice president and senior analyst for RaboResearch Food & Agribusiness.
Magaña said avocado prices for Mexican size 48s were up about 40% year over year in late July.
“For the next few weeks prices may continue to increase as Mexico relies on the ‘flora loca’ production, which was partially impacted by a freeze earlier this year,” he said.
There are four avocado blooms in Michoacán each year — loca, aventajada, negra, and normal.
“Prices are likely to remain up year over year during the ‘loca’ period until the ‘aventajada’ harvest ramps up in September,” he said.
Calavo Growers’ outlook for remainder of the year is for good volume coming from Mexico, said Peter Shore, director of business development and marketing for the Santa Paula, Calif.-based company.
“Sizing will trend to smaller sizes for September and transition to a better mix of all sizes later in the fall,” Shore said.
“We will be sourcing from Mexico mostly, but California and Peru will remain important sources for August and September but then we will rely almost exclusively on Mexico,” said Gahl Crane, sales director for Eco Farms, an Oppenheimer Group-owned company based in Temecula, Calif.
“There could be some Chilean avocados in the fall for some key national accounts, but Mexico will be the workhorse for quarter four.”
Crane said Eco Farms expects pricing to increase on 48s and larger in August and decrease on smaller-sized fruit.
“By the second half of September smaller fruit will adjust upward slightly and larger fruit will adjust downward slightly as Mexico begins their new crop fruit in late-September,” he said.
In the bag
Shore thinks retailers will the best opportunities for promotion around fall sports. Carrying multiple SKUs and bag options will also help to drive sales, Shore said.
“We will see continued growth and promotion centered around bags,” he said.
Crane said the period from October through December will be a great time to promote.
Avocado bags — both organic and conventional — continue to see growth at retailers across the country, Crane said.
“This trend will continue and is a great way to both move more avocados and (give) consumers options, be it shopping in-store or online.”
Shore said that foodservice demand has improved, and the company expects to see increased demand over the next 12 months as the country navigates the pandemic.
Crane said foodservice has returned to near normal, but labor shortages continue to prevent a full recovery. “Higher costs in general have also been challenging for foodservice chains but they continue to show incredible resilience,” Crane said.