In the face of historically low pricing, Mexican avocado imports are thriving as 2015 comes to a close. “I’ve been in this business for over 20 years and this is one of the best,” says Atticus Macias, whose wholesale company, Centex Produce, is based out of Austin, TX.
Macias says that an oversupply of product has characterized 2015’s North American avocado market. “Right now [avocados] are extremely easy to get,” says Macias. That glut of supply has driven prices down compared to 2014, when avocados sold at an average of $47.00 per case. That average has sunk to $32.00 per case in 2015, and Macias says that his company has seen historic lows in quarter four.
“Right now, we’re seeing $20.00 to $21.00 per case,” says Macias. “This is the lowest I’ve seen it in my entire career as a wholesaler.”
Falling prices fuels demand
Despite these unusually low prices, Macias says that demand has outpaced and offset his profit margin loss per unit. In fact, Macias says lower prices have been directly responsible for his company’s banner season. “It has increased business,” he explains, “because now more people can reach that price.”
Comparing today’s market and demand with the market of the mid-1990s, Macias says that avocado has transformed from a niche, ethnic fruit to a truly mainstream commodity in America. “Now you find them everywhere.” But he adds that, unlike staple fruits and vegetables, avocado is not a “must-have” item, making demand highly elastic. High pricing therefore scares away potential customers. Meanwhile, high-volume, low-pricing conditions drive sales more effectively than on many other commodities.
With a new year on the horizon, Macias says he expects equally strong conditions for quarter one of 2016. “I am getting calls from people I normally don’t deal with, which means they have a lot of product and need to move it.”
