By avocado industry veteran Avi Crane

Finally, there is good news for the depleted avocado inventory in North America! The three-week disruption of harvest and packing of avocados in Michoacán, Mexico “officially” ended after an agreement was reached that was brokered by the State Governor.

On Oct. 17, over 1300 field trucks unloaded fruit at the industry’s 30-plus packing houses.

A note of caution: no one knows for sure who was behind the strike, nor do we know for certain how long these forces will allow the Mexican avocado industry to remain uninterrupted.

Avocado production and marketing costs in Mexico are far below those of any other current source of avocados in North America.

In the two decades-plus that Mexican avocados have had access to the United States markets (full market access since 2007), Mexican avocado producers have received some of the highest on-tree margins in the world. Before the strike began, margins were close to record highs.

Short-term impact: per capita consumption is currently at levels not seen in over a decade and the expected surge in shipments this week and next will most likely result in a quick reduction of FOB prices.

During the strike, the small volume of avocados from other sources received record prices for this time of year.

The major avocado marketing companies made a gallant effort to keep their retail and food service customers supplied, a task that was not achievable with only 38% of the demand supplied from the Mexican avocado industry.

Most of the smaller importers of avocados have been out of out of supply during this period.

Long-term impact: clearly the most significant long-term consequence is the loss of confidence by the trade in the supply of avocados.

Avocados from Mexico and the Hass Avocado Board spent substantial and, most likely, record funds promoting avocados this month. From Wal-Mart down, avocado displays shrunk.

Another impact we can expect is that the USDA will ‘fast-track” the application for market access from South Africa and Colombia that are currently under review.

Sources: California Avocado Commission, Hass Avocado Board, APEAM and other industry and personal information

Avi Crane is a former executive of Calavo Growers, Inc. (CVGW). Crane served as vice-president at the California Avocado Commission, established and managed the Chiquita avocado program and began his career in the avocado industry as a producer. Currently, Avi Crane is working directly with producers to help maximize their returns from the market in North America. He can be reached at avicrane@scpacking.com.

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