Pricing may stay promotable for some time on avocados
From
| 26 January 2023
Overview of avocados in the U.S. market, complemented by charts from Agronometrics. Original published on January 25, 2023.
This year’s avocado outlook is a very different one than last year at this time. “It’s an above-average sized crop from Mexico and we’re halfway through the Mexican season. Supplies of avocados are just a tad below bountiful,” says David Billings of Stonehill Produce Inc.
Supplies are currently almost all from Mexico though there are some avocados coming from Colombia, Chile and the Dominican Republic, though the latter three countries make up roughly two percent of the volume.
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)
With the Super Bowl not far off, this year on February 12, right now there is an increase in harvest activity. “Most of the gain we’re seeing is a build-up of supplies in order to get fruit into position to be ready for heavy Super Bowl distribution,” says Billings. “That will take place one to two weeks before the Super Bowl and right now there’s potential for a pretty decent increase in demand. I think it might be much better than we saw last year.”
Last year’s crop was a smaller one out of Mexico and it also developed differently than this year’s crop. “Prior to and especially during this period last year it became fairly clear that the crop had been slow to size up, that is, grow larger while on the tree. We were able to find the volume we needed for the Super Bowl but, only a few sizes, the smaller ones, were readily available and promotable. Everything else was in limited supply and high priced,” says Billings, adding that spot pricing was much higher last year.
Better sizing this year
This year’s demand volume is similar for avocados but it’s spread out amongst all sizes with just about every size promotable this year. “Technically we might be five to 10 percent over last year but that’s about it. Last year, if your customer base preferred very large fruit, it was high priced, so it turned off demand to some extent or that demand shifted to smaller fruit. This year it’s more broad-based demand,” says Billings.
Supplies are anticipated to stay like this for a while and come June, Peru will re-enter the market. “It’s positioned ideally for when Mexico tapers but with this above-average crop, we may not see as much tapering. We definitely won’t see the kind of tapering we saw last year where the crop struggled to finish out the season,” says Billings.
With promotable pricing in place now, Billings believes prices will stay very reasonable for a long time. “Even with a bit of a rise in grower pricing, just based on the level of field activity that’s going on, prices are likely to remain promotable. The industry is rocking right along–it’s a relief actually compared to last year.”
The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.
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