Despite a Seasonal Slowdown, Producers Expect Volumes to Rebound and Meet Rising Consumer Demand.

U.S. avocado supplies remain steady going into the new year, largely supported by Mexico’s strong production levels, which traditionally represent about 80 percent of all avocados entering the United States. Even so, the year-end holiday season has created a routine but brief supply pinch.

“The supply flow is seeing end-of-year holiday tightness which is typical as many in the trade, especially producers, use the Christmas and New Year holidays to take a break from the action. This supply pinch disappears as soon as everyone returns, especially a few days after the New Year or in the case of this year’s schedule, as late as Monday the 6th.”

David Billings of Stonehill Produce Inc.

The short-term slowdown is expected to ease quickly once harvesters are back in the fields.

At present, Mexico accounts for the bulk of U.S. avocado imports, and this year’s volume from the country is approximately three percent higher than last year. Still, Billings notes that overall harvest so far is slightly trailing 2023 levels.

“That said, the harvest thus far–we are halfway through the season–is behind last year by almost four percent. The expectation is that the lost ground will be made up over the second half of the season, from January to June,” says Billings.

Demand for avocados in the United States remains high, and while the Mexican season typically spans July through June, mid-season supply is showing resilience heading into early 2024.

As stated in the report, the Mexican industry implemented higher maturity standards for fruit exported to the U.S., which, coupled with a wetter-than-normal rainy season, caused a slightly slower start to the current campaign.

There was also a healthy supply coming out of other regions, including California, which eased the pressure to begin harvesting Mexican avocados immediately. “This reduced the need to rush into Mexico during July, August, and even September,” says Billings.

These factors initially limited availability in the opening months of the cycle, but volumes have since recovered. “Now at mid-season, Mexico is firing on all cylinders and should continue to do so well into May, at which time availability begins to taper,” Billings adds.

While Mexico still dominates the U.S. avocado market with around 95 percent of supplies at present, the remaining five percent is sourced from Colombia, the Dominican Republic, and Chile.

Billings points out that California’s season has yet to gain real momentum but is likely to make a more noticeable entrance in the spring. “California has yet to make an appearance but is expected to start with meaningful volume in the spring,” he says.

“During the summer months California, Colombia, and Peru are expected to play major roles as Mexico transitions from this crop to the next, dropping down to about 50 percent of supply during that time. Other origin crops are considered on par or better than their previous seasons.”

Market demand has been climbing even as avocado prices have ticked upward. Over the past 52 weeks, U.S. avocado consumption has risen by one percent compared to the previous 52-week window, and within the last four weeks, demand has gone up three percent from the same period last year.

Billings underscores the pivotal significance of football season on avocado sales: “The biggest single demand spurt of the year, the Super Bowl, may set the tone for the balance of the Mexican season. Right now, expectations for a record-breaking event are being tempered by higher prices and less promotability than last year. Disappointing Super Bowl movement may lead to a bogged-down secondary market that drives prices lower in the weeks following the event which may for an ensuing period disrupt pricing dynamics in the field and ultimately result in pricing and promotability closer to the prior year as we move into spring.”

Higher prices have been a defining characteristic of this season, tracing back to Mexico’s measured approach to harvesting. “Pricing has been generally above 2023’s prices with Mexico and its well-metered supply flow driving that trend,” Billings states.

“Current pricing is higher than a few weeks ago which is primarily the result of the holiday squeeze. Post-holiday prices are expected to recede somewhat but remain considerably higher than last season, especially over the next month or so with Super Bowl demand continuing to put pressure on supply.”

Producers and distributors alike anticipate that normal market activity will resume once the holiday lull ends, bringing more stable volumes and prices.

This balancing act between supply flow and consistent demand underscores the importance of strategic timing, particularly for producers whose operations are influenced by broader agricultural conditions and consumer behavior across all avocado-producing regions.

With information from Fresh Plaza