U.S. avocado market stability likely to continue into fall with new Mexican crop
The stability seen in the U.S. avocado market over the summer months will likely remain into the fall as the Peruvian season winds down and Mexico kicks off its new crop.
Gahl Crane of Eco Farms told FreshFruitPortal.com that the market had seen generally low prices over recent months amid good volumes from all the supplying origins - Peru, California and Mexico - as well as disruption in the foodservice industry.
However, he said that strong retailer support had been the "saving grace" of the season and had helped to provide a good level of stability that managed to keep the industry's head above water through the summer period.
"Pricing has been pretty low and pretty stable. One thing is to have low prices that are really rocky and fluctuating, but what we've generally seen over the last month or two has been low but stable pricing, which makes it good for retailers to promote, and that's really been the saving grace for the summer market," he said.
"There's been a lot of retail support, a lot of aggressive pricing, consumers are generally paying about a dollar apiece at stores which is really helping to keep the fruit moving, and we've seen that number of retailers on ad is quite good, even if it's not a holiday weekend."
He added that avocados have been a "very reliable item for stores", explaining that Avocados from Mexico had run lots of promotions focusing on September out of Mexico, including coupons, display bins and radio ads.
"Yes prices are low, and I don't really expect them to go much higher in the coming weeks, but I do expect good retail support, good promotions, and retailers really relying on the fall avocado market to drive the produce section as all this local summer fruit starts to clean up," he said.
Mexico's share of the avocado market was last week around 76%, having been hovering around 50 - 60% for most of the summer, with Peru and California making up the balance. But Crane said there's been a sharp decline in Peru over recent weeks, with the Andean country last week having around an 8% share and California making up the balance of around 16%.
"I think Mexico's going to slightly increase its market share as Peru drops, California will stay stable for a few more weeks then decrease in October, but California is still going to be a player for the next few weeks," he said.
Lower retailer reliance on Peruvian avocados this year
Crane doesn't think the widespread disruption in the restaurant business has had a major effect on the avocado market, saying that the low prices have largely been due to the heavy total volumes in the market.
"If you look at the total numbers in July, the average weekly volume was upwards of 55m pounds a week, which is a lot of fruit," he said.
There was a big crop in California, peaking in May and June, but still "really good volume" in July and August. Peru also sent large volumes than in 2019, while Mexico too had a strong crop this year.
He added that many retailers did not necessarily need Peruvian avocados as much as they had done in previous years, as Mexico and California were both shipping strong supplies.
Mexico is now finishing up its flor loca crop, and in late September will begin its crop aventajada, with good volumes also expected.
"I think the industry really partnered well and had a good working relationship with our chain stores to work together to develop programs and plan for good volumes and promotable pricing," he said.
"Growers have generally been happy, I think retailers have been happy with the category, shippers are seeing good movement and good demand. There were some hiccups along the way where the volume was too big and inventories moving slowly, but overall the industry really has done an impressive job moving this fruit.
"Now with Peru kind of out the picture in the coming weeks, it's going to really help just to have two options in the market. I think prices will stay where they're at, but it will at least continue that stability and help the category stay on track."