Organic Avocados White Hot as Cinco de Mayo Approaches

Organic California avocados soared above $100 per carton of 48s on both the San Francisco and LA wholesale produce markets this week, according to the USDA’s daily National Specialty Crop Organic Summary. The Tuesday, April 26 report listed California 48s at $109-$110 in Los Angeles and $115 in San Francisco.

Rob Wedin, senior vice president/general manager of the Grown division for Calavo Growers, was not surprised. On that day, he said that the FOB price for the most popular-sized organic avocados was $80-$85. He noted that wholesalers must add their markup as well, plus cover the cost of transportation to their facilities.

Rob Wedin, Senior Vice President/General Manager of the Grown Division, Calavo Growers

While $100 should be sufficient to buy a box of avocados off the market in May, Wedin said the avocado market has been very strong since the middle of February, and he does not expect a precipitous drop anytime soon. That could be especially true for organic avocados as Mexico’s volume in the category is on the decline.

The longtime Calavo veteran said demand has been excellent for organic fruit all season long, which points to a thinning of supplies from Mexico, the largest producer of all avocados, including organics. Wedin said organic production from California is on the rise and some organics from Peru will enter the marketplace in May, though the bulk of Peruvian avocados—both organic and conventional—are expected to be marketed from mid-June through mid-August. All indicators point to a strong organic avocado market well into the summer.

Concurring with this projected forecast was Gahl Crane, sales director for Eco Farms in Temecula, CA. Speaking of all avocados, Crane said FOB prices are typically higher in May than April, but he is reluctant to predict that will be the case again this year. “I only say that because they are so high, and it’s hard to imagine they are going to go higher.”

Wedin said organic production from California is on the rise and some organics from Peru will enter the marketplace in May, though the bulk of Peruvian avocados—both organic and conventional—are expected to be marketed from mid-June through mid-August.

On the organic side, Crane agreed that the FOB price is in the mid $80s for 48s, with that size being in short supply. The typical packout is currently producing a higher percentage of 60s and 70s for organic avocados from both California and Mexico. “The challenge looking ahead is how much [organic] fruit is still on the trees to be harvested in June, July, and August,” he said.

Gahl Crane, Sales Director, Eco Farms

Organic growers in both Mexico and California are harvesting their fruit to fill demand and reap the benefits of the high market. That is why smaller fruit is dominating. Growers are not allowing the fruit to size on the tree when 60-size organic fruit is returning $70 FOB, for example.

Crane did say that the addition of a third player, Peru, to the market should have a moderating effect on market price. Since Peruvian fruit entered the US market in earnest about a decade ago, it has been a value play. Many of the larger retailers in the country utilize that point of origin for program buys. That does create some downward pressure on price, which Crane expects to play out as the summer matures and volume from Peru increases. Peru is projected to ship more than 230 million pounds of fruit into the United States, which would be a significant increase over 2021. A growing percentage of that is organic.

“The challenge looking ahead is how much [organic] fruit is still on the trees to be harvested in June, July, and August.” -Gahl Crane

Even with the very high prices, Crane noted that some retailers are still promoting organic avocados in the runup to Cinco de Mayo, which has always been a major guacamole-eating event in the US. Crane follows the weekly USDA retail market report that tabulates the number of retail stores on ad. He said in the past couple of weeks—even with stratospheric pricing—about 2,000-4,000 stores nationwide had conventional avocados on on ad, while about 400-800 stores were promoting organic avocados.

“Folks are getting creative,” he said of retailers finding a way to promote organic avocados that have an FOB price of $1 to $2 a piece. He said many of those ads must be featuring smaller bagged fruit.

Another organic specialist weighing in on the situation was Patrick Lucy, President of Del Rey Packing Company in Fallbrook, CA.  Having just finished a meeting with his field staff on Wednesday morning, April 27, Lucy said it appears California’s total organic crop will be down in pounds this season. “A good chunk has already been picked because of the very good prices,” he said. “We don’t think there will be much Cal organics after the end of June.”

Patrick Lucy, President, Del Rey Avocado

Lucy added that Mexico is in the back half of its organic production, and Peru is not expected to get started in any meaningful way until June. “In June, July, and August, the big organic volume is going to have to come from Peru.”

“A good chunk has already been picked because of the very good prices. We don’t think there will be much Cal organics after the end of June.” - Patrick Lucy

Lucy expressed optimism that organic producers from that South American source would be able to fill the void. “They have been planting more and more [organic avocados]. And they typically have a good size curve with a lot of 48s and larger fruit. We’re going to need that because most of what will be available from Mexico and California in the summer will be small.”

Because of the dwindling organic supplies, Lucy expects the organic avocado market to remain at its current high level, or near it, through May and into June.