The Packer May 15th, 2017 : A-1

‘Outstanding’ quality PEPPERS MARKETING, B9 SINCE 1893, THE BUSINESS NEWS SOURCE OF THE PRODUCE INDUSTRY CXXIV, No. 20 MAY 15, 2017 Family of Brands ProduceRetailer.com ProduceMarketGuide.com thepacker.com/fresh-trends MidwestProducexpo.com West CoastProducexpo.com By Jim Offner pen to be going through a cycle where supply from Mexico and California are both lower, so we have lower availability in the U.S. market Avocado prices are running nearly twice than there has been in years,” said Rob Wedin, as high as they were a year ago, with little or vice president of sales and marketing for San-no relief in sight, as Cinco de Mayo kicked off ta Paula, Calif.-based Calavo Growers Inc. another peak consumption season in the U.S. “We expect (prices) to stay strong all PRICES through June and July, and maybe the mar-As of May 10, according to the U.S. Depart-ket will start seeing more supply from Mex-ico in August and September,” said Chris ment of Agriculture, two-layer cartons of hass Varvel, sales and logistics director with Es-avocados from Mexico were $50.25-53.25 for condido, Calif.-based Henry Avocado Corp. size 32s and 36s; $50.25-54.25, 40s; $52.25-55.25, 48s; and $44.25-47.25, 60s. The market had eased A year ago, prices were $31.25-34.25 for somewhat the week af-size 32s; $32.25-34.25, 36s; $32.25-36.25, ter Cinco de Mayo, but 40s; $34.25-36.25, 48s; and $25.25-30.25, 60s. not by much, said Robb On May 10, two-layer cartons of hass Bertels, vice president of avocados from California received $54.25-marketing for Oxnard, 56.25 for 32s, 36s and 40s; $55.25-26.25 for Calif.-based Mission Pro-48s; and $36.25-48.25 for 60s. duce Inc. California production is peaking, but it is “We will have arrivals generating predominantly small fruit, said from Peru starting this Josh Underseth, salesman with Fallbrook, week, but that won’t nec-BERTELS Calif.-based Del Rey Avocado Co. Inc. essarily mitigate the up-“California is going strong. We just don’t ward pricing pressure based on declining Mexican volumes and the short crop from have any big fruit at all,” Underseth said. Sixties are most common, he said. California,” said Bertels, whose company “It’s probably going to be 60s all season,” has three ranches in Peru. “As volume from Peru increases it will Underseth said. “We haven’t packed a single box of 32s or help to fill domestic demand, but we expect to be in a demand exceeds supply situation 36s all this week and, in 40s, we’re getting a couple of pallets here and there and a decent throughout the summer.” An alternate-bearing year in California amount of 48s. But, where I’ve got 1,000 boxes — about half of last year’s crop — and of 48s, I have 6,000 boxes of 60s. and it’s not less volume in Mexico than recent years, like we’re getting a ton of 70s or 84s, either.” “We created demand with good supply combined with continued growth in de-mand across the U.S., have propelled prices and good prices, and this year we have less to about twice what they were a year ago, supply and good demand, so prices are high-er,” Varvel said. marketers said. “You go through crop cycles, and we hap-Mexico, which shipped 1.9 billion pounds Special to The Packer Avocados still top $50 a box Seen at CPMA of avocados to the U.S. in 2016 and holds a U.S. market share of about 80%, likely will top out at about 1.6 billion this year, Wedin said, noting that California’s projected out-put is about 200 million pounds, or about half of its 2016 volume. Meanwhile, demand in the U.S. contin-ues to rise about 15% per year, Wedin said. “Now, volume is down and if that demand is continuing to increase 15%, that’s going to drive prices high,” he said. Supplies will recover; it simply will take some time, Wedin said. “Mexico’s (next) sea-son starts July 1, but we believe by September, we’re going to see good WEDIN supplies from Mexico and then, next year, very good supplies from California.” California’s season generally runs from late February or early March to September, Wedin said. An official crop estimate is expected from Mexico “in the next couple of weeks,” Wedin said. Peru’s volume — perhaps 160 million pounds this year — may help to “stabilize things,” but it won’t do much to pull down prices, Bertels said. Peru, which has dealt with heavy rains and flooding, may have a total avocado vol-ume of 500 million pounds this year, but it also has large markets in Europe and Asia, Bertels said. “It will help fill in some of the (gaps in) the new crop, but prices may not come down until the new Mexican crop starts to peak in earnest in September,” he said. Pamela Riemenschneider Morgan Cairns (from left), sampling and event coordinator for Milwaukie, Ore.-based Pear Bureau Northwest, talks with Brad Walsh of Atlantic Grocery Distributing and Dave Powell of Powell’s Supermarket Ltd. May 10 at the Canadian Pro-duce Marketing Association convention in Toronto. CPMA CEO Ron LeMaire says this year’s record event saw more than 4,000 attendees, but its goal is to continue to make it a Canadian produce community gathering, not a huge show. COVERAGE, A4, A6, and The Packer’s May 22 issue. WHAT’S INSIDE Lots of cherries on tap CROPS & MARKETS, A11 And the winner is ... PRODUCE OPS , A17 Grab some onions ONIONS MARKETING, B1 Freeze nips Peach State crops GEORGIA PRODUCE, B6 California red, White & Blue Our locally grown avocados are the All-American avocado for the 4th of July and American summer holidays. Your customers look for our golden seal of approval— the California label. It’s the symbol that guarantees the homegrown taste, freshness and quality. Call 1-800-344-4333 or visit CaliforniaAvocado.com/Retail for merchandising support and marketing programs to help grow your California Avocado business. Produce of U.S.A. © 2016 California Avocado Commission. All rights reserved.

Avocados Still Top $50 A Box

Jim Offner

Avocado prices are running nearly twice as high as they were a year ago, with little or no relief in sight, as Cinco de Mayo kicked off another peak consumption season in the U.S.

“We expect (prices) to stay strong all through June and July, and maybe the market will start seeing more supply from Mexico in August and September,” said Chris Varvel, sales and logistics director with Escondido, Calif.-based Henry Avocado Corp.

The market had eased somewhat the week after Cinco de Mayo, but not by much, said Robb Bertels, vice president of marketing for Oxnard, Calif.-based Mission Produce Inc.

“We will have arrivals from Peru starting this week, but that won’t necessarily mitigate the upward pricing pressure based on declining Mexican volumes and the short crop from California,” said Bertels, whose company has three ranches in Peru.

“As volume from Peru increases it will help to fill domestic demand, but we expect to be in a demand exceeds supply situation throughout the summer.”

An alternate-bearing year in California — about half of last year’s crop — and less volume in Mexico than recent years, combined with continued growth in demand across the U.S., have propelled prices to about twice what they were a year ago, marketers said.

“You go through crop cycles, and we happen to be going through a cycle where supply from Mexico and California are both lower, so we have lower availability in the U.S. market than there has been in years,” said Rob Wedin, vice president of sales and marketing for Santa Paula, Calif.-based Calavo Growers Inc.

PRICES

As of May 10, according to the U.S. Department of Agriculture, two-layer cartons of hass avocados from Mexico were $50.25-53.25 for size 32s and 36s; $50.25-54.25, 40s; $52.25- 55.25, 48s; and $44.25-47.25, 60s.

A year ago, prices were $31.25-34.25 for size 32s; $32.25-34.25, 36s; $32.25-36.25, 40s; $34.25-36.25, 48s; and $25.25-30.25, 60s.

On May 10, two-layer cartons of hass avocados from California received $54.25- 56.25 for 32s, 36s and 40s; $55.25-26.25 for 48s; and $36.25-48.25 for 60s.

California production is peaking, but it is generating predominantly small fruit, said Josh Underseth, salesman with Fallbrook, Calif.-based Del Rey Avocado Co. Inc.

“California is going strong. We just don’t have any big fruit at all,” Underseth said.

Sixties are most common, he said.

“It’s probably going to be 60s all season,” Underseth said.

“We haven’t packed a single box of 32s or 36s all this week and, in 40s, we’re getting a couple of pallets here and there and a decent amount of 48s. But, where I’ve got 1,000 boxes of 48s, I have 6,000 boxes of 60s. and it’s not like we’re getting a ton of 70s or 84s, either.”

“We created demand with good supply and good prices, and this year we have less supply and good demand, so prices are higher,” Varvel said.

Mexico, which shipped 1.9 billion pounds of avocados to the U.S. in 2016 and holds a U.S. market share of about 80%, likely will top out at about 1.6 billion this year, Wedin said, noting that California’s projected output is about 200 million pounds, or about half of its 2016 volume.

Meanwhile, demand in the U.S. continues to rise about 15% per year, Wedin said.

“Now, volume is down and if that demand is continuing to increase 15%, that’s going to drive prices high,” he said.

Supplies will recover; it simply will take some time, Wedin said.

“Mexico’s (next) season starts July 1, but we believe by September, we’re going to see good supplies from Mexico and then, next year, very good supplies from California.”

California’s season generally runs from late February or early March to September, Wedin said.

An official crop estimate is expected from Mexico “in the next couple of weeks,” Wedin said.

Peru’s volume — perhaps 160 million pounds this year — may help to “stabilize things,” but it won’t do much to pull down prices, Bertels said.

Peru, which has dealt with heavy rains and flooding, may have a total avocado volume of 500 million pounds this year, but it also has large markets in Europe and Asia, Bertels said.

“It will help fill in some of the (gaps in) the new crop, but prices may not come down until the new Mexican crop starts to peak in earnest in September,” he said.

Read the full article at http://digitaledition.qwinc.com/article/Avocados+Still+Top+%2450+A+Box/2788027/409316/article.html.

California Avocado Commission

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