Ag at Large: Border not an issue in sales of avocados

A coordinated promotional effort by avocado growers in California has resulted in a stable and profitable market as the volume of fruit has increased markedly. PHOTO COURTESY OF ENVATO ELEMENTS

It has taken 10 years, but avocados from Mexico, Chile and Peru have joined California production in a coordinated effort that has created phenomenal sales and a sound future for the industry.

Consumers can’t help but notice the consistent quality of avocados in produce markets, and be surprised and pleased by the prices that are far below traditional levels. A coordinated promotional effort by avocado growers in California has resulted in a stable and profitable market as the volume of fruit has increased markedly.

But it was not always so. As recently as eight to 10 years ago, many California avocado growers were ready to throw in the towel due to imports, mostly Mexican, were undercutting prices they needed to survive, and even more supplies were on the horizon from Chile and Peru.

With seasoned leadership at the institutional level, growers committed to heavier cash contributions for promotion and quality maintenance, both for the California crop and fruit from the importing countries. Consumers responded to the promotions, the convenience of avocados year ‘round, lower prices and consistent quality, all leading to increased movement and steady profits.

The details of the marketing victory are recorded in the current issue of ARE UPDATE, the bi-monthly publication of the University of California’s Agriculture and Resource Economics Department. It was prepared by emeritus professor in the ARE Department, Hoy Carman, a longtime observer of specifics in California’s avocado and other fruit and vegetable industries. Graphs give easy visual confirmation of the industry’s accomplishment.

In his concluding comments Carman says: “Many producers viewed the opening of the U.S. market to Mexican avocado imports as the beginning of the end for profitable California avocado production.” But he points out that the effort by the California Avocado Commission to blunt the marketing impact “has been much more successful than California producers could foresee.”

Also credited in the report is the Hass Avocado Board, part of the grower-supported consort it took to offset the price-depressing effect of increased supplies. From 2003 to 2017 the board collected assessments totaling more than $495 million, including contributions by the California Avocado Commission, Mexico, Chile and Peru.

Returns over a 26-year period have moved steadily from about 20 cents per pound to $1.50 per pound, as the real price of avocados has danced slightly above and below the $1.10 per pound mark.

Avocado production in Mexico has expanded vigorously in the past 20 years, from slightly more than 200,000 acres in 1997 to 466,335 acres in 2017, resulting in a production increase of 266 percent. But the cooperative promotion by a compatible industry and vigorous acceptance of high quality fruit by an appreciative consumer base has made the expansion a tremendously positive and profitable experience.

Admittedly, some California orchards have been eliminated. Most were older orchards that were in bad health or threatened by commercial, and industrial or residential expansion. Production of quality fruit can’t be expected from marginally maintained orchards.

In addition to its demonstration of the effect of California’s unique cooperative marketing and promotion system for agricultural products, the report provides encouragement for growers of other crops to work together cooperatively, even when some of them operate out of the country.

The report does not indicate whether an increase or decrease has occurred in those experimental nursery projects with an avocado seed suspended by toothpicks over a glass of water, placed prominently on the kitchen window ledge. That consumer use might not have been measured; it’s just a half step beyond consumer acceptance.