It’s not just for hipsters anymore. Turns out, everyone likes their avocado toast. From 2000 to 2021, the quantity of avocados available per person, a proxy for consumption, tripled to more than 8 pounds per person, according to the U.S. Department of Agriculture. However, the fruit that makes great smoothies, taco toppings and guacamole is grown less in the United States these days due to more imports and labor shortages and declines in acreage.
Avocados are a fruit thought to have originated in Mexico and Central and South America. Avocado trees were first planted in Florida in 1833 and then in California in 1856. According to NASS, California now accounts for the majority of U.S. avocado production, followed by Florida and Hawaii, according to the Ag Marketing Resource Center. While production is declining in the U.S., it’s increasing elsewhere. The U.S. has doubled its avocado imports over the past decade and is now nearly four times higher than in the mid-1990s, according to the U.S. Department of Agriculture. In 2023, the U.S. is expected to consume 3 billion pounds of avocados, a record-breaking volume made up of imports from Mexico, Peru, Colombia, and Chile, as well as domestic production of California avocados, according to Agronometrics. Other countries growing avocados include Indonesia, Dominican Republic, Kenya, Brazil, Haiti, Vietnam, Israel and Ethiopia.
Current market conditions
Like many other consumer goods, current market conditions have contributed to higher prices. California growers were challenged by a cold spring, water costs, labor shortages and increased international imports. Costs of American-grown avocados are rising, due in part to domestic factors and part to an abrupt drop in Mexican volumes this year as well.
By the end of 2021 and the beginning of 2022, prices followed this same trend; however, prices have not stopped increasing. By June, the price had been the highest of the year, even reaching a maximum in the last two years with $60.5 per package, according to a study by Produce Pay.
Compared to June 2020 and 2021 ($36.0 and $38.23 per package), the mid 2022 avocado prices increase represented a 68.1% and 58.3% rise, respectively. The US recorded an avocado price increase during 2022, reaching a price of $60.5 per Cartons 2 Layer package in June, the highest price in the last two years. It is no coincidence that precisely during this period in 2022, the USDA reported a significant reduction in the avocado supply compared to the two previous years.
Avocados are expected to remain the fastest-growing commodity in the long term and reach a production of 12 metric tons by 2030, according to the OECD-FAO Agricultural Outlook 2021-2030.
Farming, labor issues
Avocado production is highly water-intensive, as an average of 70 liters is used per avocado, which is more than three times the amount of water needed to grow one orange and 14 times the amount of water to grow one tomato, according to a report from Danwatch, citing information from the Water Footprint Network. And in the Golden State, where weather conditions are usually dry, “everything we do in California takes water,” said Ben Faber, University of California Cooperative Extension farm advisor for Santa Barbara and Ventura counties. “It’s all water.”
With less rain and ongoing droughts, water prices have gotten higher and higher which has made it more difficult for farmers. California has the second-highest water prices at an average water bill of $77 per month, after West Virginia with an average water bill of $91 per month, according to Wisevoter. Despite prices being in decline recently, fertilizer was more expensive this spring as well. The cost of labor to weed a field is also high.
Markets are a function of the weather, so with natural disasters like storms and earthquakes, there’s going to be even less California fruit on the market next year, Faber said. Prices are going to be even higher. “Nothing is static, it’s changing,” he said.
U.S. consumption of avocados has followed a variable but generally increasing trend since 1970, increasing significantly from 2.21 pounds per capita in 2000 to 8.43 pounds per capita in 2021, a fact cited by the Ag Marketing Resource Center. Mexico supplied most of the avocados imported into the United States in 2021. In that year, the United States imported $3 billion in fresh avocados and exported about $31 million in fresh avocados.
Commercial shipments of avocados from approved orchards in Mexico can now be distributed to all 50 states. As border restrictions were relaxed, provisions were put in place to curtail Mexican production, in an attempt to avoid saturation of the U.S. market. A rapid growth in demand soon prompted a dramatic increase in imports.
There’s also an increase in exports around the world. “It’s like a commodity, it’s like the US dollar,” Faber said. “The avocado is the international exchange unit.” A forecast study by CIRAD, the French Agricultural Research Center for International Development, shows a surplus of fresh avocados in the global market by 2030. “The global avocado supply has been growing faster than global demand over the past several years,” stated Emiliano Escobedo, Executive Director of the Hass Avocado Board, in a news release.
Highlighting the avocado’s nutrition story can be a good way to market growth. “There are some large opportunities in the avocado market,” said lead CIRAD researcher Eric Imbert in a news release. “But we have to build this consumption and invest in promotion.”
Health benefits and preparation
A variety of health benefits can be shared with consumers with regards to avocados. Incorporating them into a varied diet can provide a number of benefits:
- Avocados can improve digestion, lower the risk of depression, prevent bone loss, support heart health, protect against cancer and more, according to Medical News Today.
- Avocados provide a substantial amount of monounsaturated fatty acids and are rich in many vitamins and minerals. Incorporating them into a varied, healthy diet can provide a number of benefits.
- Various parts of the avocado have medicinal benefits. When boiled, the leaves are thought to be a remedy for diarrhea. The pulp is used to hasten the formation of pus in wounds. Seeds can be smashed and used as fillers for toothaches, according to the Ag Marketing Resource Center.
- The ripe fruit can be eaten and used in preparing salads, as a flavoring for ice creams, as a filling for sandwiches and in quick desserts.
In Brazil, Vietnam and Taiwan, avocados are frequently used for milkshakes and occasionally added to ice cream. In the Philippines, Jamaica and Indonesia, a dessert drink is made with sugar, milk and pureed avocado. In Central America, avocados are served mixed with white rice. In Chile, they are often used in hamburgers, hot dogs and celery salads. Other uses include pressing the fruit for avocado oil production and using the flesh to mix and apply adobe.
Avocados are a versatile food with a creamy texture, bright color and impressive nutrient profile. They pair well with vegetables, meats and starches and serve as a way to add color and cultural flare to your recipes. Highlighting the fruit’s health benefits and versatility can help to grow avocado sales and continue to increase consumption.
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