Growers Reap Profits : Avocado Industry Strong As Supply, Demand Meet
Buoyed by the record-breaking high prices their fruit is fetching at the supermarket, more than 100 avocado growers gathered here Saturday to marvel at the boon and talk about ways to make it last.
The growers, who came to town from throughout Southern California for the third annual meeting of the Avocado Growers Assn., chewed on a wide array of topics, including state-of-the-art irrigation and water conservation techniques, modern waxing and shipping methods designed to prevent bruising and the threat foreign competition poses to California’s dominance of the nation’s avocado market.
But the real news of the day was: After a four-year slump that provided consumers with rock-bottom prices but caused scores of growers to go belly-up, California’s avocado industry is alive and doing quite well.
“We haven’t had a year like this in ages, and it feels terrific,” said a cheerful Steve White, president of Cal Flavor Inc., a firm that packs, ships and grows avocados on about 900 acres throughout North County. “It took awhile, but now the prices are on our side.”
Shoppers paying as much as $1 apiece for an avocado might disagree, but California growers, who produce more than 80% of the nation’s crop, contend they’re due for a little good news. Bumper crops, sagging public demand and soaring water rates in recent years have sent the price of the “green gold” plummeting and forced many avocado farmers to abandon their groves.
At one point, the price per pound dipped to 17 cents, well below the estimated 30 cents per pound it costs to grow the pear-shaped fruit in many parts of the state. But a decline in production has changed the picture considerably.
Officials with Calavo, an agricultural sales cooperative that represents nearly 50% of the state’s growers, said they will record $56.8 million in sales for the 1985 fiscal year ending this month, a figure up $12 million over last year. Calavo’s projections for next year are even more encouraging.
Meanwhile, a spokesman for the California Avocado Commission, a promotional body funded by a tax paid by all 8,500 of the state’s growers, said statewide sales for the industry totaled $115 million for the 1984-85 fiscal year ending Nov. 1, making it the strongest year since 1979-80.
There are several explanations for the industry’s rebound, experts said Saturday.
“Demand has come up to be more in balance with production, and production has leveled off,” said Mark Affleck, director of industrial affairs for the commission. “During the high production years of the early ‘80s, millions of (people) across the country were exposed to avocados, largely because of the low prices. That, in concert with aggressive advertising and promotion, helped increase (the public appetite for avocados) and stabilize the industry’s financial foundation.”
Despite the cheery mood, avocado experts agree that prices will fall off somewhat in February and March, when growers begin major harvests of the Hass avocado, a popular dark-skinned variety that has a long shelf-life. At present, only about 1 million pounds of Hass avocados are circulating; at the height of Hass season about 8 million pounds will be marketed.
Still, at least one veteran grower says the forthcoming dip in price will do little to mar the industry’s renaissance. In fact, Ralph Pinkerton, former president of the California Avocado Commission, predicts avocado growers will enjoy relatively stable prices and healthy profits for the next five years.
“First of all, every avocado grower is a land speculator, and everybody wants to live where avocados grow, so there’s pressure to sell out, to let them subdivide the land,” said Pinkerton, who is now a consultant for the Campbell Soup Co., which plans to market a branded, pre-ripened fresh avocado. “Secondly, many growers who introduced new varieties have stopped producing because their fruit was a flop.”
Those factors, combined with the high price of water in the Southland, should keep production low and prices relatively high, Pinkerton said.
Nonetheless, Pinkerton warned growers Saturday against “being lulled to sleep” by the rosy economic times, because there are other dangers threatening the solvency of California’s crop. Topping the list is foreign competition, both in the United States and in markets such as Japan, where American growers sell about 5 million pounds of avocados annually.
“As long as we produce enough fruit in this country to keep the prices from getting so high that they attract imports, then we’ll be all right,” Pinkerton said. “But the kind of prices we have now are very inviting to people who want to export to this country.”
Chile, which produces more than 61 million pounds of avocados annually, is an aggressive exporter and already is shipping quality fruit to the United States. But more alarming, Pinkerton said, are Mexico’s dogged efforts to sell avocados on U.S. turf.
Those efforts currently are stymied by an embargo Americans placed on the fruit because it has been plagued by avocado seed weevil, an insect that invades the avocado and causes it to fall from the tree prematurely. But pressure on the Reagan Administration to lift the embargo is mounting, Pinkerton said, and Mexico, which produces 900 million pounds of avocados annually--more than any other nation--would be a formidable competitor.
