U.S. avocado market steadier this season after previous years' volatility

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U.S. avocado market steadier this season after previous years' volatility

After "tremendous volatility" for Mexican avocados imports into the U.S. the past few seasons, the market has returned to stability.

The difference has made the first half of the 2019-20 season particularly good, multiple importers told FreshFruitPortal.com. Peruvian avocado imports ended in mid-October, and Mexican avocados currently rule the U.S. market.

"The first half of the season has been much more stable than the last few years. Volumes have been up significantly," commented Index Fresh VP of sourcing Giovanni Cavaletto.

And Steve Taft of Eco Farms said: "It's been steadier this year than other years."

In normal conditions, price swings would balance in a relatively small range - of about US$3 to US$5. But past two seasons have not represented a 'traditional' market, said Cavaletto.

Fluctuations in the market from May 2016 to June 2019 made a "volatile market" where "US$30 market swings occurred multiple times a year", he explained.

However, market conditions are back to normal this year, with prices that change only marginally.

Patrick Lucy of Del Rey Avocado Company said that the main difference is that "there has been a steady harvest in Mexico".

Since there haven't been interruptions in harvest or imports - something that has been common in years prior - the steady behavior of Mexican avocado imports has created favorable conditions for sellers.

The result of this is that "pricing will be fairly the same relative to what it is currently" in upcoming months, according to Taft.

Developments in pricing

While overall volumes are up, importers often expect November to be the slowest month for Mexican avocado imports.

Three weeks ago, harvesting in Mexico slowed down a bit, with inventories down by about 15%. However, inventory is currently up again by 8%, said Cavaletto.

This lower harvest was due to a couple of factors, said Del Rey Avocados. The first was Mexico's holiday season - with the Day of the Dead in early November. Rainy weather also impacted harvest speed.

Such decreased harvesting and slightly smaller volumes make Mexican avocado prices favorable. With "slower conditions and limited volumes, prices raised in the last few weeks," said Lucy.

Cavaletto attributed this to the industry "identifying the floor and ceiling of the market".

"I think the slow down was because we identified the floor," he said.

Market conditions in the upcoming months

Now that importers have dealt with sluggish imports in November, the industry anticipates prices to remain good.

"Moving forward, we think that the market should be pretty steady," added Lucy.

With a strong faith in the popularity of avocados in the U.S. market and knowledge of the Mexican avocado industry's power, Index Fresh spoke about upcoming promotional efforts.

"I learned a long time ago - don't bet against the avocado," said Cavaletto.

Since the industry expects volumes of Mexican avocados to increase slightly in upcoming months, prices are expected to stay the same. This is because demand usually increases around the holidays and Super Bowl season, detailed Lucy.

Winter is an especially popular time for Mexican avocados. Its highest volumes come to the market through winter months and usually remain high until May.

As "there should be some good promotion" with holidays coming up, "foodservice and retailers have plenty of opportunities", explained Del Rey Avocados.

The Mexican avocado industry is expected to have big promotions throughout the winter.

"Mexican avocados have a huge budget and is going to be promoting avocado consumption very heavily throughout the winter and through the spring," commented Cavaletto.


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