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Avocados in Charts: California, at the heart of the U.S. market


This is the second article in the Avocados in Charts mini-series. This week we take a deeper dive into the California season and how its role has evolved over the last couple of years.

California’s season leads the summer months, often peaking in May or June before settling down for winter. As luck would have it, customers in the U.S. most want to consume avocados during the summer months as well, with their salads and sandwiches. This match up between supply and demand gives California’s fruit the best window that the market can offer, with benefits that other origins simply don’t have access to.

Avocado movement in the U.S. market (in pounds), California historic monthly comparison 
(Source: USDA Market News via Agronometrics)

The prime position California has, along with their proximity to the consumer, is also reflected in the prices that its fruit receives. When calculating the difference between the market average and California’s fruit, the latter received a premium of US$1.87 per two-layer flat, clearly defining the origins position as the premium supplier for the market.

Hass avocado Shipping Point prices in USD (two-layer flat)
(Source: USDA Market News via Agronometrics)

Historically, the biggest price spikes have always been in line with California’s season, often as a result of a smaller harvest. Although other origins have entered the market strongly, California’s prominent position is still evident. 2017 is a good example, where California shipped 44% less volume than they had in 2016, sending Shipping Point prices to the highest level recorded to date. In August of last year the average price for the month reached US$62.52 per flat.

Hass avocado Shipping Point prices in USD (two-layer flat), California historic comparison
(Source: USDA Market News via Agronometrics)

The scene is quickly changing, however. Whereas in 2010 California represented 42% of the U.S. market, in 2017 the origin put up only 11%.

Avocado movement, California vs total U.S. consumption (in pounds)
(Source: USDA Market News via Agronometrics)

This massive shift has come about because of the rapid growth of complementary origins such as Mexico and Peru, which have come online quickly over the last couple of years to supplement the rapid growth U.S. consumers require.

The beneficiaries of this change are the consumers. An example can be observed in 2015 where California had a similar season to what we saw last year, however, Mexico was able to fill in the gaps offering stable pricing throughout the entire period.

Avocado movement, California, Mexico and Peru (in pounds)
(Source: USDA Market News via Agronometrics)
 
Written by: Colin Fain
Original published in FreshFruitPortal.com on June 05, 2018 (Link)

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Source: USDA Market News via Agronometrics. (Agronometrics users can
view this chart with live updates here)
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