“It’s a game changer.”
So says one shipper of avocados out of Mexico on the decision last week where Mexico’s Department of Agriculture and U.S. authorities agreed to allow avocados from a second Mexican state to be exported to the United States. For almost 25 years, Mexico has been allowed to export avocados only from one western Mexico state: Michoacán. The second state which will now also be permitted to ship is nearby Jalisco.
“With Jalisco now being open to the U.S., that could take the player out of two other markets which are Europe and Japan,” Juan Escorcia of Avocados Aguirre says. He notes that worldwide avocado movement is a sort of delicate dance where different growing countries rely on a network of markets and this decision could affect other markets. “I don’t think anyone knows yet what’s going to happen but there’s going to be an adjustment commercially,” he says. He adds that Japan for example is fairly dependent on Mexico for avocados, but more so Jalisco and that fruit from Mexico to Japan takes 15 days on the water. “That’s good timing for avocados to travel. But this decision for Mexico is a big step. As an industry we’ve always worked towards this decision.”
Moving smaller crop
This decision comes at a time when Mexican avocado supplies overall are slimmer. “There’s definitely a shortage of avocados this year,” says Escorcia. Avocados are an alternate bearing fruit in which abundant years are offset by a less abundant one. “It’s been like this for the current crop since May,” he says. “We’re at 70 percent compared to the crop last year. It’s about a 30 percent difference between last year and this year’s crop so I think we’ll have 10-15 percent left from our crop.”
Escorcia does note that some growers are waiting until the new year to pick fruit given that North American inventory has already largely been accounted for for the remaining weeks in 2021. They’re hoping the new year could bring better prices.
Meanwhile demand is fairly stable for avocados and Escorcia notes once January arrives, demand could strengthen with resolutions for healthier eating underway as well as the run up towards the Super Bowl. He also adds that generally, consumption of avocados continues to grow annually.
All of this leaves pricing fairly strong currently. “Pricing is about 10-15 percent stronger than last year,” says Escorcia.