A July 17 meeting of the Hass Avocado Board revealed that almost 2.6 billion pounds of avocados will be consumed in the United States this year, with potentially 3 billion pounds in the marketplace in 2020.

While there was some pushback about that lofty 3 billion pound figure surfacing in 2020, no one doubts it’s on the horizon and it doesn’t appear to strike fear in the minds of marketers. In fact, in a separate conversation with The Produce News a couple of days later, Index Fresh Vice President of Sourcing Giovanni Cavaletto said the biggest challenge facing the avocado industry is finding sources of supply to satiate the growing demand.

The supply reports at that recent HAB meeting revealed that the marketing situation for fresh avocados in the United States has been robust all summer with volume from many districts bringing total supplies to above 50 million pounds per week on average. Separately, marketers tell The Produce News that the f.o.b. market price for the most desirable sizes and fruit is flirting with $60 per carton even with these big volumes. And grower returns at the farmgate in California have been north of $1.70 per pound through most of the season.

With this backdrop, various members of the Hass Avocado Committee — a meeting held in conjunction with the HAB meeting — pointed to a strong season for all stakeholders. A representative from Peru, Jose Antonio Castro, said that while Peru has a smaller total crop in 2019 than 2018, the United States should receive about the same amount of fruit that it did last year from that country’s avocado exporters. He said that Europe is getting about 22 percent less fruit than last year while the U.S. market should receive about 183 million pounds. He predicted that about 55 percent of those imports, or about 100 million pounds, would come into the country from weeks 28 to 40, which encompasses the mid-July to mid-October time frame.

While it’s too early to know how large Peru’s crop will be in 2020, Castro said volume should be up following this year’s down season. He said very early guesses predict a 750-775 million pound crop, which would represent at least a 17 percent increase in total volume over this year. He added that Peruvian growers continue to add acreage with 9 percent growth expected the next two years followed by several years of 4 percent growth.

Castro said Peru is turning some of its attention toward China in an effort to develop that market for its early-season fruit, which can be harvested in the March-April time frame.

While Mike Brown of the Mexico Hass Avocado Importers Association had made the prediction that there could be 300 million pounds in the U.S. marketplace in 2020, during the board discussion on supplies the representative from that region indicated a 2019-20 crop very similar to the 900,000 tons that will be sent to the U.S. this year. Mexico does continue to increase its acreage.

There was discussion that Mexico’s average yield per hectare is not increasing because many of its trees are on the downside of their age cycle when production decreases on a per hectare basis. Counteracting this, however, is a move toward more high-density planting, which, in theory, increases yield per grove.

Brown noted that Mexico is expected to release a crop estimate on Aug. 16 for its 2019-20 crop. Mexico’s crop year runs from July 1 to June 30, which makes it a bit difficult to estimate supplies using the calendar year timetable.

HAB member Patrick Lucy of Del Rey Avocado gave the Chilean report and revealed that the South American country could be in the U.S. market with fruit by mid-August, which is two to three weeks earlier than last year. Chile is estimating a crop of about 430 million pounds with 60 million of those pounds earmarked for the United States. Chile very much plays the market and if the strong marketing situation continues throughout the summer, one might guess that more Chilean fruit could be headed to the U.S.

Lucy said Chilean exporters are expecting to front load their U.S. shipments with the vast majority coming from mid-August to mid-October.

Lucy also reported that after several years of limited plantings, Chile’s acreage is increasing again as new districts are being cultivated.

Retail movement
Gahl Crane of Eco Farms and Dave Fausset of Del Monte Fresh Produce reported on the U.S. market place and how well avocados are moving at retail. Crane said retailers are running promotions even at $2 per piece and finding brisk movement. Fausset concurred, noting there has been no drop in demand as the retail price has increased.

Crane said Peru was actually the market leader in volume during back to back weeks in June, taking that position from Mexico, which was the volume leader during the first 24 weeks of the year and is expected to also take the top spot for the final 26 weeks of the year.

The anomaly came in weeks 25 and 26 when Peru shipped 17.7 million pounds and 16.2 million pounds to the United States, respectively. Mexico’s shipments in those two weeks were only 12.9 million and 8.7 million pounds. Though Mexico topped California by several hundred thousand pounds in week 25, California topped Mexico by about 5 million pounds in week 26 putting Mexico in an unlikely third place for that two-week period.

Weighing in on the 3 billion pound forecast, which will occur sooner or later, Fausset said the key to moving that volume will be communications and orderly marketing. He said the big question is how consumers buying habits will change as volume increases. He did not say it, but the underlying concept is, will people even consume more avocados if there is a price drop? This summer has shown a willingness by consumers to buy avocados even at a healthy price. Could demand significantly increase with lower pricing? Fausset said retailers have shown a great appetite for promoting avocados, and indicated that will continue.

Speaking from the audience, both Bob Lucy of Del Rey Avocado Co. and Brown of MAHIA sang the praises of keeping marketers well informed about the supply situation. Lucy said, “the info you give us is critical. Keep it coming.” Brown said the numbers and forecasts provided by HAB on its website is critical information that allows retailers to plan ahead. He said the market is data driven.