Avocado consumption has room to grow, Rabobank analysts believe

From The Packer | 6 May 2022

Overview of avocados in the U.S. market, complemented by charts from Agronometrics. Original published on May 4, 2022. 

The availability of avocados in the U.S. has tripled in about 15 years, and Rabobank analysts say there is still room for growth.

avocado volumes by origi 18

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

The U.S. now imports about 90% of avocados consumed in the country, and also accounts for almost 40% of total global avocado imports.

The U.S. share of avocado imports coming from Mexico has jumped from 17% in 2001 to 90% in recent years, the report said.

avocado volumes by origi 19

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

“Per-capita consumption has recently surpassed 9 pounds, according to USDA calculation,” the report said. “By comparison, this is nearly three times the European consumption levels. Yet, we believe that there is still room for further growth.”

In addition, the report said hot avocado prices the first half of 2022, recently close to $80 per carton fob for prime sizes, could cool a bit in the second half of the year.

For the second half of 2022, availability in the U.S is likely to improve, given expected heavier exports from the Mexican state of Michoacan and first-ever exports from Jalisco, potentially bringing prices down to average levels, according to the report.

Mexican avocado production has increased from 1.1 million metric tons in 2010 to 2.4 million metric tons in 2020, the report said.

About 75% of the avocado production in Mexico is concentrated in Michoacan, while Jalisco accounts of about 10% of the national harvest. The balance of the national crop is supplied by the states of Mexico, Nayarit and Moreles, the authors said.

Speaking May 3, Magaña said the Rabobank report also includes perspectives on demand in Europe, production in South America, Mexico and the U.S.

Jalisco’s time?

Avocado exports to the U.S. from the Mexican state of Jalisco are expected to begin for the first time ever as soon as late May, Magaña said, and that may help boost avocado supplies to the U.S.

With about 30% of global production, Mexico is by far the largest avocado producing country in the world, the report said. Mexico’s 30,000 growers and 70 packinghouses account for 40% of global avocado exports, the report said.

Shipments to the U.S. from the Jalisco region will be increasing gradually as more operators get certified for exports to the U.S., Magaña said.

U.S. demand for avocados has been firm despite higher prices, he noted.

“I think there are a lot of loyal consumers that will continue to buy avocados,” he said. With expanded supplies from Peru and the next Mexican season, Magaña said prices should moderate by late summer.

In general, he said Rabobank expects avocado prices in the late summer to be higher than during the second half of the year in 2020, but perhaps below the 2021-22 season.

“We will probably see price somewhere in the middle between those (seasons),” he said.

The Rabobank report also looked at prospects for California growers.

The strong appetite for avocados in the U.S. will continue to be satisfied mainly by increasing imports, but the domestic industry will also benefit from the steady year-round domestic demand, the report said.

Magaña said that demand could prompt California growers to plant additional avocado orchards, which recently has stabilized at about 47,000 acres in recent years. However, limiting factors include water availability and the high land values in Southern California, he said.

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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