Key Points:
- The avocado supply shortage has led to an increase in revenue for major fruit distributors.
- Mission Produce reported a record $324 million in third quarter revenue, while Limoneira anticipates record avocado revenue for the fiscal year.
- Despite higher prices, consumer demand for avocados remains strong in the U.S.
Insight:
The avocado supply shortage, caused by factors like drought and high temperatures, has affected major exporting countries like Mexico and Peru. This has resulted in distributors relying more on avocados from California.
California experienced a larger harvest than expected, leading to increased flexibility in addressing supply challenges. Limoneira delayed harvest to capitalize on higher prices and has increased its avocado supply guidance significantly.
Despite supply shortages and price hikes, consumer demand for avocados continues to rise. Companies are adapting by raising prices and expanding production to meet demand.
With the end of El Niño, supply in Peru is expected to rebound, potentially affecting prices in the future. However, strong consumer demand is likely to keep avocado prices high.
Limoneria plans to expand avocado production and focus more on avocados in the coming years to meet growing demand.