Organic Avocado Supplies Shifting but California Still in Play

While California’s crop of avocados is dwindling quickly, steady supplies of organic avocados remain available throughout the Golden State though the FOB price is relatively high.

“We are still buying organic avocados from California and will be doing so for the next six weeks,” said David Weinstein of Heath & Lejeune Inc., a Los Angeles-based distributor that specializes in organic produce.

The organic sales veteran said that typically f.o.b. pricing of conventional and organic avocados operate in sync – with organics getting a premium -- because so many shippers now operate in both spaces. But the last few weeks have been a bit different. The declining supplies from California and Peru in mid-August resulted in a market price spike in both categories. However, the week ending August 26 saw a huge increase in volume from Mexico, Peru and California on the conventional side.

“The price got very high and then it came crashing down,” said Gary Clevenger of Freska Produce International Inc., Oxnard, CA, last week.. “Right now (on the conventional side) we are in the $30-$40 range with a great discrepancy of $10-$15 depending upon the source.”

Gary Clevenger of Freska Produce International Inc.

Weinstein noted that the organic price didn’t follow suit during the August roller coaster. “Organic prices shot up along with the conventional, but when the market adjusted back down, the organic price didn’t do the same thing.”

During the first week of September, the USDA’s National Specialty Crops Organic Summary listed organic avocado prices in the San Francisco terminal market at $88 for 48 to 60 size avocados. Weinstein didn’t debate the accuracy of those prices but noted that the report reflects wholesale prices to independent buyers, not the FOB price. He said organic avocados in the optimum 48-60 size range were in short supply, with larger organic avocados more plentiful.

Though Heath & Lejeune is expecting sufficient supplies from California through September to meet its customers’ needs, Weinstein said those sales will not be at a promotional pricing level. He estimated that on the organic side promotable pricing will not return until mid-November. “I believe there will be sufficient supplies for promotions around Thanksgiving, but not too much before then,” he said.

Ripening avocados getting ready to be harvested.

Clevenger expects Mexico’s new crop to ramp up in volume beginning in mid- to late-September. He said organic supplies will probably increase again around that time, but that will also signal the winding down of California’s organic supplies.

Weinstein said that while conventional avocado supplies have been greatly enhanced with a growing list of countries operating in the space, organic avocado supplies haven’t received the same boost. Mexico and California are the main sources of organic avocados with relatively few shipments coming from other countries such as Chile, Peru or the newest entry, Colombia.

Rob Wedin, vice president of fresh sales & marketing for Calavo

Rob Wedin, vice president of fresh sales & marketing for Calavo, told OPN that the company’s supplies of organic avocados from California are winding down. By the middle of this month, Calavo is expecting to be sourcing all of its organic production from Mexico. He noted organic prices have been high, but Mexican producers have responded with sufficient supplies to cover the current demand at those high prices. As Mexico’s overall volume increases in September and October, organic supplies should follow suit.