Avocado prices go sky-high

By LIAM DANN, Primary Industries Editor

It's bad news for lovers of avocado-filled summer salads and guacamole. Avocados this season will be up to 80 per cent more expensive than usual.

"It's pretty hard to get an avocado under $2.50 in the supermarkets," says Avocado Industry Council chief executive John Cutting.

This is the time of year when they are traditionally cheap but that has not happened this year.

The cause of the price jump can be traced back to poor weather in early spring last year and a huge global shortage.

Thanks to one of the longest growth cycles in horticulture, avocado growers find themselves in the unusual position of gearing up for a bumper season next year while they are still harvesting fruit from one of the worst seasons on record.

Avocados have a 15-month cycle from flower to harvesting so the late frosts of spring 2002 that did so much damage to apple and grape harvests this year are just now taking their toll.

But flowering this spring indicates the situation will look a lot better this time next year.

Unfortunately for growers, this season's huge drop in volume - about 30 per cent down on last year - comes at a time when global demand is extremely high.

"This season has been great by price but terrible by volume," Cutting says. "There is a global shortage of avocados and all our export markets can take everything we can give them."

Such a big volume drop is all the more significant when you consider that the number of hectares planted in avocados has actually risen 15 per cent in the past year.

The total of planted avocados is now approaching 4000ha. It has grown dramatically in the past few years but is expected to peak at about 5000ha, Cutting says.

Despite a couple of average seasons, enthusiasm for the industry is still fuelling good growth.

Global demand for avocados has kept prices good so growers can make a decent living even in a poor year.

In the 2002/03 season, which although better than this year was still below average, orchard gate returns ranged from $13,581 a hectare to $29,060 a hectare.

If last season was poor and this season is terrible, the good news is that early indications suggest next season will be a bumper year.

Cutting says estimates are that volumes will be up 100 per cent on this year. "It's been a fantastic spring," he says.

The dramatic turnaround has been helped by good weather and a realisation by growers that they need to import bees for pollination.

The varroa mite has seriously depleted feral bee numbers around the Bay of Plenty but the extent to which it would affect pollination took some growers by surprise last season.

This season growers have imported large numbers of bees and pollination had been excellent, Cutting says.

The hope now is that good international prices will hold up long enough for growers to cash in.

The outlook is promising. Globally avocado production has risen from two million tonnes to 2.7 million tonnes in the past four years. But that extra 700,000 tonnes has not come close to satisfying demand.

"Even if it goes back to more normal prices, then the values are still there," he says.

New Zealand's industry is tiny by world standards and doesn't make a dent on world prices regardless of fluctuations.

Last year growers produced more than 13,000 tonnes, of which about 7000 tonnes were exported.

The sector generated sales of about $50 million.

If all goes to plan industry estimates suggest avocados should rival wine as an export earner by 2010.

The target is 55,000 tonnes and sales of $200 million to $250 million a year.

But even if the industry meets long-term targets it will still be a small player.

This country's temperate climate makes growing avocados a more challenging task than in warmer countries.

"New Zealand is absolutely at the edge climatically so a less than ideal spring has much bigger impact than it would in California or Australia," Cutting says.

In the past year a lot of attention has been given to avocado oil exports.

Although Cutting is pleased to see the product doing well, he says the hype needs to be kept in perspective. Export returns for oil would not even reach $1 million yet.

In the context of a $50 million industry the media attention has been disproportionate, he says.

Added-value products are a great advertisement for New Zealand avocados, but growers have plenty to do to improve returns in the fields.

The industry has been using the same root stock since it began in 1960s but new-generation plants are now being imported from California and South Africa.

Over the next five years trees will be planted which have 30 to 40 per cent better yields than the old varieties.

Industry growth

1996/97: 3454 tonnes volume, $15.41m sales

1999/00: 9400 tonnes volume, $42.07m sales

2002/03: 13,248 tonnes volume, $46.64m sales