Healthy Avocado, a Berkeley, CA-importer of Mexican avocados, has a robust website (healthyavocado.com) chock full of up-to-date information to help the U.S. avocado supply chain better market the crop.
Paul Weisman, founder and president of the firm, said accurate information is hard to come by with regard to shipments from Mexico. A look at the data on the company’s website confirms that shipments seem to fluctuate widely. A graph of shipments during 2016 shows many different peaks and valleys, which Weisman said had a very close correlation to pricing last year. For example, the chart shows that shipments dipped to close to a year-round low in October and rebounded almost to a year-round high the following week. Pricing followed suit.
“It’s our goal to educate buyers with regard to shipments and the marketing situation,” he said, noting that the data is a day old but it is updated every day. “You can see the numbers and see overall trends.”
He said when prices spike, shipments tend to go up and then prices come down again. “When you see 1,000 truckloads crossed at a high price [during a specific week], you can guess that the market is going to get wobbly.”
Weisman characterized both avocado pricing and volume as a “yo-yo controlled by growers.” They pull the strings and can influence the market quickly, and don’t appear to be afraid to do so. He said everyone along the supply chain can make better decisions when they have a clearer picture
Healthy Avocado has been bringing in avocados from Mexico for more than a decade. Weisman said the company has worked with many different packinghouses over the years and currently has a relationship with about 10 different packers. At some of those sheds, its own label is packed and at other sheds, it operates as a broker buying the house label. It sells to retail, wholesale and foodservice companies all over the country. The firm’s president said it sells both “number one’” and what he calls “a one-and-a-half. It’s better than a two, it’s a very nice piece of fruit.”
It is largely used by the foodservice industry, which needs good flesh but can stand some outside scarring. Weisman said Healthy Avocado sources only from Mexico because Mexico has more than enough volume to fill its needs on a year-round basis.
In general, Weisman said the market price of avocados this year should not have the fluctuations of last year because of California’s reduced volume and apparently fewer avocados expected to come from Mexico throughout the spring months. In fact, he noted that overall avocado supplies are going to have difficulty keeping up with demand. “This is a new normal. The supply-demand ratio has changed.”
He reasoned that for many years Mexico has been adding about 10 percent more fruit on an annual basis by certifying 10 percent more acreage each year for entry into the U.S. marketplace. “Now it’s down to 5 percent a year. There’s not much land left to develop. Demand is balanced with supply,” he noted.
And considering demand continues to grow and outpace supply, the global industry could be entering a chronic supply-exceeds-demand situation.
Weisman said that the supply-demand situation in the United States is one very strong reason that he doesn’t aggressively pursue export sales. “We ship to Japan and we’ve talked to China, but China wants a very, very green avocado and they are very fussy. The best place to sell is in the U.S. and there is plenty of business for us here.”