Organic Avocados Supplies to Remain Tight Through August with Strong Pricing

Demand continues to exceed supply for organic avocados with no new source of supplies expected until the new Mexican crop begins shipments in earnest in late summer.

This week, the most attractive sizes of organic avocados – 48s to 60s – were returning $75-$82 f.o.b. and the market was strengthening.  There is no reason to expect any major change to the supply end of the equation until at least mid-August.  The demand side seemingly continues to increase though as the price moves north of $80 per carton.

Gahl Crane, sales director, Eco Farms Avocados

Gahl Crane, sales director of Eco Farms Avocados, Temecula, CA, said it is a combination of factors that have caused this situation.  California’s crop is down significantly – the smallest crop in a decade – and that means organic production is also well-off last year’s total.  Second, prices have been so strong this year that California growers have been marketing their fruit more quickly than expected.  Mexico is moving toward the tail end of its 2018/19 market season and traditionally organic supplies have trouble making the finish line because of strong demand for the limited supplies.

Crane said a bright spot has been increased organic supplies from Peru, which is probably producing more organic fruit than it ever has before.  Peru, however, sends the majority of its fruit to Europe, as it is the number one supplier in that market. Crane said the strong U.S. market may well have the impact of increasing the percentage of Peruvian fruit sold in the U.S. market.  “That means more conventional fruit, but it should also mean more organic fruit as well,” he said.

Rob Wedin, vice president of fresh sales and marketing for Calavo Growers, Santa Paula, CA, agreed that the current organic avocado situation is a simple case of demand exceeding supply.  He said the supply of organic avocados from Mexico has run out earlier than the supply of conventional fruit for the last half dozen years and that appears to be the case again this year. 

Rob Wedin, vice president of fresh sales and marketing, Calavo Growers

When the new Mexican crop, or flora loca as most people call it, gets started, there should be a bump in organic supplies, but Wedin estimated that will not occur until August.  And even when there is an increase in Mexican supplies in July and August, California’s organic avocado crop will most likely be nearly exhausted, resulting in a continued strong market.  He said avocados are a popular item and the same demographic that skews toward avocados also are over indexed buyers of organic produce.  Put the two together and you have very strong demand for a very popular item.  Wedin said it has been difficult to fill their organic orders. 

Crane noted that Eco Farms is currently sourcing from Mexico, California and Peru and expressed optimism that organic avocados from California will last into mid to late July.  He said even if growers want to get them off the trees and into commerce, lack of labor and packing house schedules require orderly marketing and some extension to the season.