Avocado traders look forward to new origin for U.S. market

May 27 , 2016

The approved entry for avocados from all Mexican states into the U.S. was met with a great deal of fanfare yesterday, in a move that in the short-term will allow for Jalisco growers to build on the success of their Michoacán counterparts. At www.freshfruitportal.com, we caught up with a range of industry players to hear their views on what the new deal might mean. Avocado-shutterstock_259201163 - npanorama

When asked whether the announcement would be a turning point for the category, Mission Produce vice president of marketing Robb Bertels actually didn't think so, although he was optimistic about the new option for both the U.S. market and the growers themselves.

"I'd have to say no, mainly because there really isn’t additional fruit that’s available – it’s just a reallocation of the resources that are out there currently," Bertels said.

"Jalisco is really the most advanced state behind Michoacán. A lot of that fruit is already destined for the export market, just not the United States.

"It really just is a matter of where the fruit will go now versus before it was certified."

As the market is close by he believes much of the fruit will go to the U.S., but he emphasizes there is still a long certification process for all Jalisco growers to be granted permission under the Animal and Plant Health Inspection Service's (APHIS) systems approach.

And when the fruit does come to the U.S. it is unlikely to displace any other sources, according to the executive.

"I don’t really see any fruit being pushed out. We’ve actually been active in Jalisco for close to eight years and have partnerships with growers and packers in that marketplace.

"Some of that fruit finds its way to Europe, some of it finds its way to Canada, and now it’s basically another customer from Jalisco to open up."

The message was similar from Del Rey Avocado vice president of business development Ron Araiza.

"We’ve been anticipating this it seems every quarter – we kept saying, “it’s coming, it’s coming, it’s coming” and the anticipation and finally it is here, and we’re trying to see what the ramifications are," he said.

"I’d venture to guess that while it is impactful to the U.S., it’s probably more impactful for Jalisco in that it gives them a new market to market their fruit...they were already marketing fruit into Japan, Europe and to Canada.

"I’m talking now specifically about Jalisco, although of course in the future theoretically all the Mexican fruit could be marketed into the U.S."

Araiza highlighted how heavy rains in Michoacán sometimes led to quality issues in the avocado crop, so opening up the market for Jalisco-grown fruit would give consumers another option when such issues arose.

"That’s refreshing for us, but when we look at volumes, it’s not significant, especially to start with. There’s probably work to do out of Jalisco," he said.

"I think the expectation right out of the gate is that we’ll have about 1,300 hectares that are ready to go on July 1, and we’re looking in the first year at probably no more than 30 million pounds of fruit in the first year.

"In terms of potential, realistically, our feeling is that really there are 6,000 hectares of potential there today with an estimate of 100-110 million pounds of fruit possibly for the year in the near term," he said, clarifying this meant a period of two to five years.

So while the deal may not seem like much in the big scheme of the market, particularly as Jalisco only accounts for 3% of Mexico's entire fresh Hass avocado program, it could eventually make a significant contribution to the U.S. trade.

"The potential on a week-to-week basis is three million to five million pounds a week when we’re now moving 50 million pounds. That’s the significance of it.

"When I got to Del Rey [seven months ago] the company already had a customer base in Canada, so we do source and pack our fruit [from Jalisco] – it’s not our packing house, but we do have a partner down there in Jalisco and they’re eager to pack for us for the U.S. as well.

"And of course we all know Calavo [Growers]. I was down there in December and saw Calavo’s facility, a beautiful facility, and of course I ran into probably the pioneer in that region, Mr. Ignacio Gonzalez who is the owner of Avocados Zapotlan – they were excited and anticipating the entry as well into the U.S."

Gonzalez said the Jalisco industry was organizing a symbolic event to celebrate the opening today (May 27).

"It’s an emotional feeling – all the growers in the zone, we’ve had the expectation that it would happen," he said.

"For Jalisco it’s a great step being able to be there close to export to the United States. It’s simply a reflection of the good things that have been done by the growers and the associations here in Jalisco."

In a release, the Mexican Avocado Producers & Packers (APEAM A.C.) and Avocados from Mexico (AFM) confirmed Under Secretary Edward Avalos visited the state to confirm the opening.

"We are pleased that Jalisco is now part of APEAM’s export program to the U.S. There is decades of experience behind avocado production and packing in Jalisco, which will continue to benefit our industry partners and consumers,” said APEAM chairman Antonio Villaseñor.

" Mexico is the largest avocado producer in the world and the only place where avocados are available year-round, thanks to a blooming season that lasts the entire year."

Villaseñor's comments were echoed by AFM chairman Michael Browne.

"The Avocados From Mexico marketing team has worked tirelessly to build sustainable demand across the United States," Browne said.

"The news from USDA to expand acceptable growing regions will help to assure year-round supply of fresh avocados from multiple states in Mexico to further support future demand and category growth."

Another Jalisco-based grower, José Alberto Chavez who heads up Aguacates D'eliseos, said growers had been trying to ship their fruit to the U.S. for the last two or three years.

"We believe this opening for all states in Mexico will be very beneficial for us, mainly as it costs a lot more for us with all the logistics to Europe and Asia than to send it directly to the U.S. where there's clearly less risk and greater durability of the fruit," he said.

"With this approval we only have to wait for APHIS inspectors to come and inspect our orchards and packhouses. We have been working hard to be able to meet all the norms and we expect to have everything.

"As D'eliseos we already have the avocado orchards and packhouses ready to ship our products to the U.S. At the same time, we already have contact with importers who are the same ones who work with us in the markets where we send our fruit - currently we have around 1,800 hectares of production," he said, emphasizing the company would continue to ship to its customers in Europe and Asia.

Avocado industry veteran Avi Crane was also positive about the new opportunity, but questioned why the process had taken so long.

"For over two decades Mexican avocados grown in the state of Michoacán have entered the U.S. without a single reported incident of any phytosanitary issue - billions of Hass avocados, thousands of truckloads a week," Crane said.

"During this period, domestic Hass avocado producers have seen record returns and the consumer in the USA have been able to purchase avocados in supermarkets and order them in restaurants year round. Consumption has surged.

"Consumers in Canada have enjoyed the taste of Hass avocados grown in Jalisco for years – now Americans will have the opportunity as well."

Crane asked why it took so long for APHIS to act on the request from the Mexican Government, and addressed other issues of concern for improving avocado imports.

"Now, our industry should coordinate efforts in convincing the department to eliminate the costly and useless AMS inspection requirement on imported avocados that is based on the state of Florida standards for Greenskins.

"Over US$5 million is paid every year for an inspection that, by definition, isn’t only redundant, it’s a joke."

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