Avocados in Charts: Mexico could see high fall prices despite U.S. supply forecast

August 07 , 2018

In this ‘In Charts‘ series of mini-articles, Colin Fain of data visualization tool Agronometrics illustrates how the U.S. market is evolving. In each series, he will look at a different fruit commodity, focusing on a different origin or topic in each installment to see what factors are driving change.

Mexico’s impact on the avocado industry cannot be understated. From the advertisements that Avocados from Mexico puts out during the Super Bowl, to promoting foodie trends taking over the country that are getting avocados put on everything, its presence is keenly felt.

There are many that argue that avocados really took off once Mexico was given access to the market. What we can see is that they are the market. While in 2010 Mexico had a 48% of the U.S. market, by 2017 it had tripled its volumes and accounted for four out of every five avocados consumed.

Avocado Movements by Origin

(Source: USDA Market News via Agronometrics)

At the height of Mexico’s season is the Super Bowl, where guacamole has become a staple to fans who instinctively load up their chips without taking their eyes off the screen – either for the game or for the high-budget ads.

Monthly Avocado Movements from Mexico, Historic Comparison

(Source: USDA Market News via Agronometrics)

The huge volumes that Mexico sends at the peak of its season, December and January, have brought with it a sense of stability, offering the consumers the most steady pricing of the year.

Where Mexico is at its lowest point, however, the prices fluctuate much more. The last two years have seen massive price spikes from August through October. Both years added up to similar volumes, which were already 15% lower than 2015 – the last year with stable pricing over the fall period.

I estimate that to maintain pricing, avocado volumes should be growing by about 15% every year. If we take 2015 and its pricing as a base, that means that over the next three months the industry somehow needs to come up with a 50% more volume than it shipped in 2017, which would give us an estimated average shipping point price of around US$32.80 per flat.

As Mexico’s volumes begin to increase, again all eyes will be on how – along with California and Peru – it will be able to supply a nation hungry for avocados. The Hass Avocado Board is forecasting all origins to offer 25% more volume over the next three months than was shipped in 2017, but looking back on the data, I believe there is a good chance that might not be enough.

Monthly Hass Avocado Shipping Point Prices (Cartons 2 Layer) Average, Historic Comparison

(Source: USDA Market News via Agronometrics)

In our ‘In Charts’ series, we work to tell some of the stories that are moving the industry. Feel free to take a look a some of the other articles by clicking here.

Agronometrics is a data visualization tool built to help the industry make sense of the huge amounts of data that you depend on. We strive to help farmers, shippers, buyers, sellers, movers and shakers get an objective point of view on the markets to help them make informed strategic decisions. If you found the information and the charts from this article useful, feel free to visit us at www.agronometrics.com where you can easily recreate these same graphs, or explore the other 20 fruits we currently track, creating your own reports automatically updated with the latest data daily.

To welcome avocado professionals to the service we want to offer a 5% discount off your first month with the following coupon code: AVOCADOS_IC

The code will only be good till August 28, so visit us today.

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