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Avocado Profile

By Hayley Boriss, Junior Specialist; Henrich Brunke, Assistant Specialist; and Marcia Kreith, Program Analyst; Agricultural Issues Center, University of California, agissues@ucdavis.edu.


Updated February 2008 by Diane Huntrods, AgMRC, Iowa State University.


Background

Avocados (Persea americana) are a fruit and not a vegetable. They are 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. Today California accounts for the majority (90 percent) of U.S. avocado production, followed by Florida (9 percent) and Hawaii (1 percent) (FASS 2008).

The dominant variety of avocado grown in California is the Hass variety, while Florida growers typically produce larger, less oily West Indian or Mexican varieties including Booth, Lula and Taylor. California and Hawaiian avocados are marketed year round and Florida’s market is from June through March (NASS 2008).

Certain varieties, such as the Hass, have a tendency to bear well only in alternate years. After a season with a low yield, due to factors such as cold (which the avocado does not tolerate well), the trees tend to produce abundantly the next season. This heavy crop depletes stored carbohydrates, resulting in a reduced yield the following season, and thus the alternate bearing pattern becomes established.

Marketing

The U.S. Federal Hass Avocado Promotion, Research and Information Order was established in 2002, after the USDA lifted the ban that had prohibited entry of Hass avocados from Mexico and Central America since 1914. After lifting the 80-year ban, the United States gradually let avocados enter its market.

By February 2007, commercial shipments of avocados from approved orchards in Mexico could be distributed into 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.

Safeguards preventing the entry of avocado pests, such as annual field surveys, remain mandatory. The annual net benefit of lifting the ban, while maintaining the required safeguards, was found to total about $70 million (USDA 2006). Another benefit: some Mexican farmers could now earn a living by growing and exporting avocados, ending their migration north.

Despite higher imports from Mexico, the market for U.S. avocados remains strong early into the 2007/08 marketing season. Driving the market up are continued strong demand, dwindling end-of-season supplies from California’s 2006/07 crop, a smaller-than-anticipated new crop in California due to the wildfires and significantly lower shipments from Chile, due to freezing conditions that reduced their production.

Avocados have been marketed as a healthy dietary choice and as a good source of beneficial monounsaturated oil. A whole medium avocado contains approximately 15 percent of the FDA's recommended daily amount of saturated fat. In addition, avocados have 60 percent more potassium than bananas. They are also rich in B vitamins, vitamin E, vitamin K and folate. 

Demand

U.S. per person consumption of avocados has followed a variable but generally increasing trend since 1970, increasing significantly in recent years from 1.5 pounds per capita in 1999 to an average of 3.3 pounds per capita in 2007. A growing Hispanic population, an increasing awareness of healthier foods and the acceptance of monounsaturated fats have helped to spur demand (ERS 2007).

Value-Added Uses

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. Various parts of the avocado have medicinal benefits. When boiled, the leaves are thought to be a remedy for diarrhea. Pulp is used to hasten the formation of pus in wounds. Seeds can be smashed and used as fillers for toothache.   

Production
 

The value of U.S. avocado production has been increasing since the early 1990s, from $118.1 million in 1992 to $264.2 million in 2006. U.S. production of avocados in 2006 amounted to 146.4 thousand tons, a decrease of 166 thousand tons from the previous year. U.S. production peaked in 1992 at 291,600 tons and was variable throughout the 1990s. (NASS 2007).

Based on NASS estimates, the 2006/07 California avocado crop totaled 135,500 tons, the smallest since 1989/90. Production declined in 2006/07, partly due to the season, but primarily due to crop damage from freezing temperatures.
 

Prices

Despite rising imports, prices for avocados have increased since 1980 due to increasing demand and a growing population, but they have also been highly variable. U.S. prices peaked in 1988 at $2,316 per ton, but smaller peaks occurred in 1992, 1998 and again in 2002.

In 2006, the average price of avocados rose to $1,390 per ton, an increase of $260 per ton from the previous year. California prices in 2006 were $1,440 per ton, while Florida prices were $912 per ton that year. The price for California avocados is higher than that of Florida avocados partly because of varietal differences.
 
Imports/Exports

The United States is a net importer of avocados and avocado products with negligible exports. Between 1995 and 2007, the gap between imports and exports widened substantially. The total value of avocado imports into the United States has increased substantially over the past decade and a half, from $4.4 million in 1989 to $246 million in 2006.

In 2006, 73 percent of the avocados imported into the United States came from Mexico, while Chile's market share dropped to 21 percent. For 2007/08, avocado imports will probably decrease due to increased domestic production and decreased production in Chile.

In 2007, total U.S. avocado exports amounted to $4 million and 2,165 tons, down 65 and 66 percent, respectively, from the previous year. U.S. avocados are mainly exported to Canada, Korea and Japan.

In late 2006, U.S. growers were allowed to export avocados to all Mexican states. Mexico will likely import California avocados for processing and then re-export them to the United States.  

Outlook

The wildfires that swept through Southern California last October raised concerns about their impact on the state’s avocado crop. The California Avocado Commission (CAC) initially indicated that around 4,000 acres, or about 6 percent, of the state’s total bearing acreage were affected by the wildfires. The fires burned down avocado trees and damaged production equipment, including irrigation lines. The strong winds knocked fruit off trees. Whether those trees will still be productive remains to be seen.

Before the wildfires, the CAC expected 2007/08 production to improve from last season’s crop, estimating that it would be up 33 percent from the previous season. Now they predict that production growth is likely to be reduced to about 20 percent, but total volume is still likely to exceed the very small crop produced last season. If realized, California avocado growers should provide around 162,000 tons in 2007/08, up from the 135,500 tons reported by NASS in 2006/07 and slightly below average.



Sources

About Avocadoes, California Avocado Commission.

Avocado Update, Market News, FAS, USDA, January 2008.

Food and Agricultural Organization (FAO), United Nations, 2003.

Fruit and Tree Nuts Outlook, ERS, USDA, 2007.

The Hass Avocado Promotion and Research Order: Offsetting Price Impacts from Imports with Advertising and Promotion, Working paper No. 04-006.

New Phytosanitary Regulations Allow Higher Imports of Avocados, Amber Waves, ERS, USDA, 2006.

Noncitrus Fruits and Nuts, 2007 Preliminary Summary, NASS, USDA, January 2008.


 
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