September price bump benefits Carpinteria ranchers
For most California avocado growers, the 2021 season is in the rearview mirror, and due to supply fluctuations from Mexico, the 2021 avocado market was a roller coaster ride of price swings. California avocados harvested in the spring fetched an early season high of $1.64 per pound through mid-April, before prices fell off in June and July, bottoming out at $1.35 per pound for conventionally grown fruit on July 7. Growers who could hold their fruit until September 22 fetched a season high of $2.12 a pound. But no matter what the per-pound returns were, the 2021 California avocado season was low-volume at 257 million pounds, which has left a lot of ranchers picking up the pieces with measured optimism heading to 2022.
The season started off in a reasonable manner, but for those who waited for the end of the season to harvest, it was stellar,” said Rick Shade, owner of Shade Farm Management, which manages avocado ranches throughout Ventura and Santa Barbara counties.
Early estimates for next season, which technically starts Nov. 1, 2021, are for 300 million pounds of California avocados. Peak harvest occurs late March through August, varying each year depending on weather and volume of fruit to harvest. This season’s harvest was originally projected at 330 million pounds, but heat from summer 2020 and ongoing droughts had the Golden State fall 73 million pounds short of those loftier expectations.
“The most difficult factor was weather – not much extreme heat and wind, but extreme drought is more troubling,” Shade said. “I’ve been doing this for four decades, and this is the driest year I can remember.”
Climate, water and the battle for profits
Avocado acreage in San Diego County has been contracting for decades due to the scarcity and high price of water. Of course, the entirety of California’s avocado growing region – San Diego to San Luis Obispo – has water issues, but the toll on San Diego ranchers has already shown itself in shrinking avocado production area and volume.
The price swings noted above benefited farmers from the north – mainly Carpinteria and up. San Diego County farmers do not have the luxury of hanging onto their fruit until September, when Mexico transitions in its harvest and California growers can often find peak prices in an undersupplied market. Growers in San Diego cannot leave their fruit in the more intense southern sun, where heat and drought cause it to mature more quickly and motivate growers to move it to market by summer.
According to Carl Stucky, a local farm manager and board member of the California Avocado Society, in years like 2021, Carpinteria ranchers are the envy of those in other hotter, drier regions of the state.
“In Carpinteria, we have significantly higher long-term yields and fairly good water availability,” he said. High volume per acre, combined with the ability to seize late season prices, make Carpinteria Valley a prime avocado growing region.
Avocados as a global commodity
“California avocados can get a pretty well-established premium over imports,” Stucky said, “but Mexico sets the market.”
Mexico grows more avocados than anywhere else in the world, and the United States is its top customer. Annually, over 80 percent of fruit consumed in the United States originates from Mexico, which now sends over 2 billion pounds of avocados over the border each year. U.S. consumers can count on Mexican avocados throughout the year, which has led to avocados going mainstream and even becoming a cultural phenomenon often referenced as a luxury expense indulged in by millennials on toast.
The steady stream of Mexican fruit is what establishes the supply side of the marketplace, and California – the only significant avocado producing state in the U.S. – enjoys a premium over Mexican fruit; it’s just that the California fruit price depends on the inventory of Mexican fruit in the marketplace.
Historically, California growers could count on low supply from Mexico in September and October, which made it prime time to harvest. That window has become less reliable in recent years, but 2021 again had a pronounced price peak when Mexico was transitioning between crops, which it can stagger in harvest due to elevation differences in its avocado producing region of Michoacan.
The U.S. also receives a significant amount of fruit from the South American nations of Peru and Colombia, where growing regions are expanding due to high demand from Europe, the U.S. and developing Asian markets. Peru and Colombia are vying for a greater share of the growing global avocado trade. Chile recently played a significant role in the U.S. avocado market but has had well publicized drought issues that have led to a production slump. African nations like Kenya are also increasing production and establishing supply chains to Europe and the Middle East. Agricultural economies around the world are increasing plantings of “green gold,” and governments are assisting in the movement toward avocado production, making California fruit even more susceptible to the influence of the global avocado marketplace.
Organics march to their own beat
California organic growers enjoyed prices between $2.20 and $2.40 per pound through the 2021 season and remain largely insulated from price swings impacting the conventional market. Avocados from California generally fetch premium prices in niche markets, and organics are even more specialized. Selective shoppers will pay more for organic fruit grown in state.
As a global phenomenon, avocados have had their share of bad press for consuming resources and the influence of organized crime on the industry in places like Mexico. Public perception of foreign grown avocados as having negative climate and social impacts has led to more consumers wanting to vote with their wallets for better farming practices, making California fruit – organics in particular – an attractive option in the marketplace.