By avocado industry veteran Avi Crane

In the most recent edition of The Hass Horn in January, this writer asked the following question: "Can avocado consumption in North America continue to expand in 2016?"

My answer was yes and, as the final results for first quarter 2016 shipments demonstrate, I was accurate as they rose 14.9% year-on-year. Six million pounds were added to the average weekly shipment volume. During the first three months of 2016, the avocado industry in the USA shipped 79% more volume than five years ago - an amazing 15.8% annual increase.

As mention before in this column, some of us remember when a total of six million pounds resulted in a market crash of biblical proportions. In 1984, after a season of shipments exceeding five million pounds per week and returns below production costs, Ralph Pinkerton, founding president of the California Avocado Commission and a friend of this author, was fired by the Board.

This extraordinary growth in 1984 was due to many factors, but on the top of the list is the decision by the United States Department of Agriculture (USDA) to address the concerns of domestic avocado producers and develop a protocol that lifted the 80 year plus embargo on fresh avocados from Mexico.

The huge expansion of acreage and industry infrastructure in Mexico over the past 20 years (a significant percentage of this investment by California-based avocado companies that had opposed the importation of avocados from Mexico for decades) has provided the North American retailers and restaurants with the capability to offer their customers fresh avocados on a year-round basis.

The existence of avocados, native to Michoacán, Mexico, I steadfastly believe is a matter of Devine intervention (I know for sure as I physically planted hundreds of avocados trees in the Holy Land). However, the story of the avocado market in North America over the past 20 years is a matter of free-trade and free-market dynamics. As long as these conditions exist, the expansion of avocado consumption in the USA and Canada will continue to reach record levels for many years in the future.

The current market for avocados is very depressed. As I have alleged the main factor in the periodic market crashes in the avocado industry is NOT due to the long-time, professional and knowledgeable players that move avocados to their retail and food service customers on a weekly basis.

Rising and out-of-control inventories always result in crashing FOB (freight on board) prices in any commodity. In the avocado deal, the root of the problem is the 80+ importers who execute avocado programs on a “learn on the job basis” and ultimately take on more than they can handle and find themselves with breaking pallets that must move fast.

It is expected that with growing demand, many produce companies will look into the avocado industry. Many take the jump, and many fail due to a lack of product knowledge, a lack of customer base and other factors. In a free market, this is a situation that will continue and, in reality, is healthy for the industry as weak players are weeded out relatively quickly. The other good news is that at a POS (point of sale) unit price of $0.69, avocados are moving fast in retail stores throughout the USA and Canada.

Below are shipping projections for the second quarter of 2016 which continue the trend of an increase over the prior year period. And hopefully, the long awaited (and awfully overdue) decision by the USDA to include the Mexican state of Jalisco in the Hass Avocado PPQ (Process performance qualification) protocol will propel the consumption level even higher.

Sources: California Avocado Commission, Hass Avocado Board 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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