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Avocados from Mexico expects volume increase, 70 percent market share

During the 2013-14 crop year, which ran through June 30, the Mexican Avocado industry enjoyed a 66 percent market share in the United States. "With the good start we have seen this year, I think we are going to be around 70 percent of the market," Alvaro Luque, president of Avocados from Mexico, said in an interview with The Produce News.

Avocados from Mexico is a partnership between the Mexican Hass Avocado Importers Association and the Avocado Producers & Exporting Packers Association of Michoacàn (more commonly known by the acronyms MHAIA and APEAM).09-MexAvos-CropAvocado groves, young and mature, in Michoacán, Mexico. Some 13,000 additional acres of avocado groves in Mexico have been certified for export to the United States this year. (Photo courtesy of Avocados from Mexico)

During November and December 2014, Mexico's market share will be even higher, as in addition to Mexico expecting to increase its export volume, California was effectively finished with its 2014 avocado crop and Chilean avocado exports to the United States for this fall and winter are expected to be down.

Last year, Mexico captured anywhere from 85 percent of the market to 100 percent of the market each week during October and November, said Luque. This years, he expects the range to be more than 90 percent of the market each week of November and December, and "up to 100 percent in some weeks."

Mexico's total avocado exports to the United States in 2013-14 were about 1.1 billion pounds, Luque said. For 2014-15, "we are projecting 1.3 [billion pounds]."

One reason for the growth is an 8 percent increase in the number of acres of avocados in Mexico certified for export to the United States, bringing the total to 187,000 acres certified for the program this year, said Ramon Paz, marketing representative of APEAM.

"We are expecting a very nice crop for this year," Luque said.

"We are seeing a normal range of sizes," added Paz. The crop is expected to peak on sizes 48 and 60, "with the normal curve going to 40s and larger, and then to 70s and smaller, basically the same curve that we have had in prior seasons."

The production curve will be similar to past seasons, with peak production from October through March and the lightest volume in summer.

Shipments to date for the crop year as of mid-October were almost 300,000 pounds, which is 70 percent more than the same period the previous year, Paz said.

Emiliano Escobedo, executive director of The Hass Avocado Board, which computes its statistics on a calendar year basis, told The Produce News that through September of this year the industry as a whole had moved slightly over 1.4 billion pounds of Hass avocados, or an average of 36.2 million pounds per week. That compares to around 1.3 billion pounds for the same period in 2013, "so we have moved 85 million pounds more in the first nine months of the year.

At the start of the year, HAB projected total movement of about 1.7 billion pounds for the year, "but we are going to be over that," Escobedo said. "Conservatively, we believe that we could be closer to 1.8 [billion pounds]."

HAB calculated that from January through September of this year, Mexico's share of the avocado volume in the United States was 71 percent, up from 64 percent for the same period in 2013, "so Mexico has gained market share. Because Mexico will be virtually "alone in the market" for the final quarter of 2014, "my projection is" that for the entire year, Mexico's share of the volume will be about 69 percent. "So there is no question that Mexico is the dominant player in the marketplace right now."

Mexico is "such a big part of the U.S. market now" that the total volume of avocados in the U.S. market "is going to go higher just because Mexico is going to go higher," said Rob Wedin, vice president of fresh sales and marketing for Calavo Growers Inc. in Santa Paula, CA

Market prices dropped in late September and early October as Mexico began to build volume, and were at levels from $5 to $10 lower than a year ago at the same time, Wedin said Oct. 8. But the Mexican growers "are trying to stop the slide." Still, with "a bigger volume moving out of Mexico," there is "a desire on the part of growers in Mexico to get in and start moving the crop."

With demand for avocados in the United States increasing every year, "we are excited about the Mexican crop being larger," Wedin said. "There are new groves beng certified, and we have seen significant increases in the organic volume."

"You really have to congratulate the Mexican growers and the handlers for doing a really good job of … making sure that the fruit ripens properly," said Bob Lucy, president of Del Rey Avocado Co. Inc. in Fallbrook, CA. "I think the guys were frustrated that the price dropped as much as it did in the last two or three weeks, but when you are going from 18 million pounds a week up to 35 million pounds a week, you are going to have some kind of adjustments in the market."

McDaniel Fruit Co. in Fallbrook, CA, has done "a pretty extensive survey of the areas where we are sourcing out of Mexico," said Rankin McDaniel Sr., president of the company, "and the quality of the product looks excellent."