Australia expects bumper avocado crop, plans export growth
With a number of new orchards coming into production, Australia is expecting a bumper crop, with volumes up 9% from last year's, says Avocados Australia CEO John Tyas.
Based on the industry’s latest quarterly forecasting, the nation is set to produce 95,000 metric tons (MT) for the April 2019 - March 2020 period.
Regarding this growth, Tyas comments: "It is actually quite typical because domestic production has been steadily increasing for the past 15 years."
As an example, Australia's avocado supply for January, February and March of 2019 increased by 20%, compared to the same three-month period last year.
"What the industry has done, is throw its support and dollars, to build the domestic market to ensure consumption has grown alongside that production," he explains.
Indeed, looking at the numbers, it's clear that the country has been successful in that aim.
Tyas elaborates how the generous 95,000 MT could affect the domestic market.
"What we’re hoping to see is a consistent supply of Australian avocados into the domestic market, year-round. It’s highly likely there will be more avocados in the market at any given point. But that’s been true for many years."
He points out that there is a high level of domestic demand for the category. In fact, Australians consumed 3.5kg of avocado per person in 2017/18.
Moreover, he says there has been "a steady upward trend for the past 20 years."
He explains: "consumer spending on avocados is another positive for the industry. The latest retail data from Nielsen shows a significant increase in annual household purchasing, which is great news."
Expanding to new export markets
Australia has no plan to slow its growing production anytime soon; in fact, it's only expanding into new markets.
"Our 2018 Orchard Info Report indicated Australia now has more than two million avocado trees in the ground, with just under one million trees planted in the past six years.
"As an industry, we are very confident Australia will be producing about 115,000 MT or more of avocados per year by 2025, which means we are already working on expanding our export markets."
At the moment, less than 5% of the country's production is exported, Tyas says. Yet he's quick to emphasize "that will obviously need to increase alongside production."
To this point in the industry’s development, Australians have been eating more avocados than the nation can grow. Yet that is sure to change with the "rapid increase in production", he notes.
As a result, he says the company has been very proactive in its scheme for moving forward.
"The Australian industry has just reviewed its export strategy, taking us through to 2021. The forecast rate of growth in our production is well above previous domestic consumption growth.
"And the expectation is that significantly more fruit will be marketed to offshore markets as we approach domestic market saturation."
Meanwhile, Tyas comments that the company will be supporting the Australian industry to increase demand for its avocados in its key existing markets.
These include Singapore, Malaysia and Hong Kong.
Looking to future possibilities, he says: "With the support of the Australian Government Department of Agriculture and Hort Innovation, we hope to achieve workable market access protocols for access to Thailand, China, India and New Zealand in the coming years.
"We’ve had some recent success with the addition of a Japanese market, which is now in its second year. Our aim is to secure market access to Japan for all regions of Australia so we can build year-round supply programs into that market."
Improving production efficiency and quality
When it comes to the steps Australia has taken to ensure success, Tyas says "the industry has strongly supported research and development that improves not only production efficiencies but importantly, quality."
He continues: "We want the consumer to have a good eating experience with every avocado. Building demand has been a major focus in the past. But as we move into an era of increased global competition, we need to become more efficient."
Part of this, he notes is decreasing the country's very high labor costs.
According to him, "The best way for us to reduce unit cost of production is to increase yield per hectare. We have some orchards that achieve very high yields, but on average, our productivity levels are still fairly low."
Another consideration is technology. Tyas mentions that this will play an increasingly important role in Australian avocado production in the future.
Room for growth
Australians already eat more avocados than any other English-speaking nation. However, Tyas points out that there is still a growing number of households that buy the fruit.
The latest retail data from Nielsen shows the percentage of avocado buying households has only increased.
In the 12 month period ending on 23 March 2019, it had grown from the previous 12 months' 68% to 73%.
Considering this, he believes: "There’s definitely room for growth. But the industry realizes this needs to be underpinned by both our marketing and our focus on consistently delivering a high-quality product."
What's more, he says "we have seen significantly increased investment in our industry from the corporate sector. This is likely to continue in the short term at least.
"While there are still plenty of new orchards being established each year, we expect this to slow down in the next few years as the existing orchards come into full production."
Tyas indicates that the major variety Australia produces is Hass.
"Here in Australia, it makes up about 80% of production, with the main greenskin Shepard variety at about 15%.
"The remainder of the production is split between varieties such as Reed, Maluma, other ‘Hass types’, Wurtz, Gwen etc."