The Hass Horn: Fixed price Peruvian avocados mix with greater Mexican supply - FreshFruitPortal.com

The Hass Horn: Fixed price Peruvian avocados mix with greater Mexican supply

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The Hass Horn: Fixed price Peruvian avocados mix with greater Mexican supply

By avocado expert and Green Earth Produce business development manager Avi Crane

Avi Crane newFor several years the summer supply of avocados, after reaching record levels during the Cinco de Mayo promotion, fell well below demand.Ā Ā Those avocado growers who harvested during this period enjoyed record returns, but for packers/importers, retailers and ultimately the consumer, the high FOB (freight on board) levels of July and August reduced demand and caused confusion in the market.

As the information below confirms, the summer of 2015 has proven that avocado-bearing acreage in Mexico has now reached the capacity to supply the North American market year-round, including during the July to mid-September period with "flora loca". When given access, the avocado acreage in the state of Jalisco will increase the stability of the 52-week supply.

Mexican avocados were a pleasant surprise this summer. The remaining one third of the supply was from California and Peru, almost evenly divided between the two sources of origin. The trend to pre-commit product to retail programs continued this year. This writer calculates that more than 80% of the Peruvian avocados that arrived in 2015 in the USA were shipped directly or indirectly to retailers at fixed prices. Through week 33, the volume of Peruvian avocados arriving in the USA was down 20% on last season.

California has been unable to produce a crop above 300 million pounds during the past two seasons. With the State of California (both the Department of Agriculture and the California Avocado Commission) pushing locally grown produce, retailers in the state have worked with packing houses to tie up volume ahead of an update on the harvest status.

While the percentage of pre-committed fruit is not as high as for Peru, the trend is certainly increasing, especially in light of the lower crops. Most of the crop never goes beyond the Rocky Mountains. Of note is that many of the avocado-growing areas in California saw record temperature levels recently. Undoubtedly, this accelerated the end of the 2015 harvest.

However, due to the high cost of water and the drought, most growers are forced to leave their orchards on 'life support' in regards to irrigation. In these situations during a heatwave,Ā the trees quickly use up their moisture and their roots do not have the capacity to replenish the tree before damage is caused. Clearly the 2016 crop will be reduced, but the extent is not known at this time.

Week 24-33 shipments by COO/Pounds.

Week 24-33 shipments by COO/Pounds.

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Graph 3

September 2015 outlook

Based on forecasts from Mexico and Peru, next month could see an increase from the past several seasons of avocados from Chile in North America. The weekly demand has shown itself to be above 40 million pounds a week (1.6 million cartons).

As the harvest of the "flora loca" ends and the start of the "Aventajada" crop begins next month, it is unlikely that the volume of Mexican avocados will reach the demand level. This in an opportunity for Peru to extend, or at least, increase its departures for the USA immediately. Chile now has the prospect of increasing its September and fall shipments of avocados to North America.

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Graph 6Ā Avi Crane can be contacted at avi.crane@greenearthproduce.us

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