Agronometrics in Charts: ProHass Alters Its Projections for the 2023 Peruvian Avocado Season
By
| 15 June 2023
In this installment of the ‘Agronometrics In Charts’ series, Sarah Ilyas studies the state of the Peruvian avocado season. Each week the series looks at a different horticultural commodity, focusing on a specific origin or topic visualizing the market factors that are driving change.
2022 witnessed exports for Peruvian avocados reaching unprecedented levels, surpassing one billion pounds across more than 40 international markets. Peru solidified its position as the second largest exporter in the world. “In 2022, the US received 277 million pounds of avocados from Peru, which was partly driven by Mexico having an off-season. However, this year will be different,” says Xavier Equihua, President and CEO of the Washington, D.C. based Peruvian Avocado Commission. According to Isabel Tavera, vice president for Pacific Produce/Agrokasa, avocado shipments from Peru to the United States in early June were only half what they were a year ago at the same time. “Peru is sending about 53 percent less to the U.S. compared to the same time last year,” she said, noting that the decline in shipments is due to Mexico’s increased volume during the same time frame. Tavera indicated that total Peru avocado shipments to the United States in 2023 will not reach the initial forecast of 330 million pounds.
“Until week 21, Peru grew 70% of what it expected to grow this year, having exported only 40% of the fruit, which means that a large part of our projected growth has already been achieved,” says president of the Association of Hass Avocado Producers of Peru (ProHass), Juan Carlos Paredes Rosales.
“Initial projection from ProHass showed 330 million pounds and the updated projection is 240 million pounds, which represents an adjustment of 27 percent less,” he said. “This will change depending on price expectations in the U.S. compared to Europe, and the availability of adequate dry matter fruit from Mexico, ” says Juan Carlos. He revealed that significant volumes will be arriving to the United States starting in the summer (week 26 arrivals), with more than 14 million pounds per week, until late September. Week 23 saw 1.6 K tonnes entering the US market, 57% lower than the volume recorded in week 23 of 2022.
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)
Equihua points out that over the past five years, the consumption of avocados in the United States has remained static, fluctuating between 2.7 to 2.8 billion pounds. Despite significant efforts and more than $100 million annually in promotional activities, limited headway has been made in increasing consumption. He remains optimistic, however, stating that he hopes consumption will finally reach 3 billion pounds this year. He emphasizes that there is still ample room for growth, and it is essential for all stakeholders to collaborate and work collectively towards achieving this goal. “Our goal should be to increase consumption in the next six to seven years to 4 billion pounds,” Equihua says.
While there is potential for further growth in avocado consumption within the United States, it is important to note that the country already holds the distinction of having the highest per capita avocado consumption among all industrialized nations globally. Equihua highlights that the considerable consumption in the US can be attributed, in part, to the presence of over 65 million Latinos residing in the country, alongside a multitude of Mexican restaurants and eateries, such as Chipotle, which extensively feature fresh avocados and guacamole in their offerings. While the West Coast and East Coast represent significant consumption hubs, there remains ample room for expansion in these regions, as well as in states located in the Midwest and Southeast that exhibit comparably lower levels of avocado consumption. Conversely, the presence of non-Spanish and non-Italian Latino populations in Europe is virtually non-existent, and the prevalence of Mexican restaurants is scarce. As a result, avocados are infrequently found on the menus of European establishments.
Major hikes in pricing are not expected, primarily due to the persisting international outlook, which indicates the continued growth of Latin American avocado production, leading to high stock levels in major markets. It is therefore imperative for Peru to undertake initiatives aimed at opening new markets. Prices fell to their lowest in nearly a decade in September 2022, at $15.20 per package. Pricing this season will largely depend on market dynamics and demand.
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)
From April to the end of October, Mexico tamps down its marketing promotions. Consequently, Peru has the opportunity to expand its current market share in the United States through strategic positioning. To address origin-related challenges, Equihua emphasizes the need for the Peruvian Association of Avocado Producers and Exporters (ProHass) to assume a more prominent role in voluntary inspection. This includes augmenting their team of auditors and specialists to ensure that avocados exported to the U.S. market exhibit optimal dry matter and quality. Additionally, ProHass, which currently represents only 65% of U.S. avocado exports, should strengthen collaboration with Senasa to ensure that non-ProHass partners adhere to the prescribed dry matter standards. Equihua acknowledges the difficulty of this exercise but underscores its importance in initiating excellence at the origin to ensure the impeccable presentation of the fruit upon arrival in the United States.
Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)
In our ‘In Charts’ series, we work to tell some of the stories that are moving the industry. Feel free to take a look at the other articles by clicking here.
All pricing for domestic US produce represents the spot market at Shipping Point (i.e. packing house/climate controlled warehouse, etc.). For imported fruit, the pricing data represents the spot market at Port of Entry.
You can keep track of the markets daily through Agronometrics, a data visualization tool built to help the industry make sense of the huge amounts of data that professionals need to access to make informed decisions. If you found the information and the charts from this article useful, feel free to visit us at www.agronometrics.com where you can easily access these same graphs, or explore the other 21 commodities we currently track.
Written by: Sarah Ilyas
