Avocado demand on the rise as growers pull their trees

Are Californians getting rich off of growing avocados? ABC10's Gabrielle Karol went to find out.

It was financial advice that infuriated avocado lovers around the world, when an Australian millionaire said that expensive “avocado toast” was standing between Millennials and saving up for a home.

While the simple explanation was fiercely debated, it’s hard to deny one truth: avocados are expensive.

The Hass Avocado Board says average sale price for an avocado in the U.S. was $1.19 in May, 2017.

But as any avo-connoisseur knows, restaurant-goers can pay a dollar or more simply for slices of avocado added to a dish, let alone a full avocado.

“I definitely have paid $2 for an avocado,” Bobby Mull told ABC10 News as he manned the stall at a Sacramento farmer’s market.

While diners may think restaurants are making bank by charging extra for avocado or a side of guacamole, Wyman Harrell, the manager for popular lunch spot Dad’s Sandwiches in Sacramento, says the dollar or two doesn’t do much.

“It’s still a case [of avocados] I’m barely breaking even on, at that,” Harrell said.

So it begs the question: with high prices for avocados and ever-growing demand for the fruit, who’s getting rich off avocados?

A trip down the California coast

Perhaps surprisingly, California avocado growers say they’re not rolling in the green, despite widespread love for their crop.

But up in San Luis Obispo – the northernmost county of the five California counties that produce the vast majority of U.S.-grown avocadoes – grower Jim Shanley says it was the growing demand for avocados that led him to enter into the business.

“The fastest growing demographic in the ‘90s was Hispanic, and the culture was leaking into the mainstream,” Shanley said, explaining his decision. “I thought that there was a limited number of places in the world that were frost-free [and had] ample water.”

But water eventually proved harder to come by than Shanley initially anticipated. On a tour of his 32-acre avocado grove, he pointed out the sparse fields of nearby avocado growers.

“Those were cut down because of lack of water. That farm went bankrupt,” he said, gesturing to one downhill neighbor. Pointing at another hill, Shanley said that neighbor’s grove had been reduced from 220 acres to 170 acres due to water shortages.

The California Avocado Commission shows a recent high in 2007-2008 of 65,497 productive acres of avocado groves in the state. But by 2015-2016, acreage had fallen to 51,902 acres.

Shanley says it’s not just the high cost of transporting water to southern counties that has led growers to rip out groves.

“You don’t have wages going from $10 to $15 an hour in Mexico,” Shanley said. “It’s quite a bit less.”

Mexico fills in the gap, as demand grows

One thing is for sure: Americans are eating many more avocados than they used to.

The average American was eating just 1.1 pounds of avocados in 1989. Fast forward to 2014? The average is 7 pounds of avocados eaten each year.

Avocado trees are sensitive – they don’t handle frost well, nor do they thrive in temperatures above 100 degrees.

With the limited number of places avocados are able to grow in, the amount of imported avocadoes has grown to keep pace with Americans’ appetites.

The U.S. government says that in 2013, the country imported more than $1 billion worth of avocados – with most of the imports – nearly 90 percent – coming from the U.S.’s southern neighbor, Mexico.

“We tried to fight it,” avocado grower Gene Nickel said, referring to Mexican imports.

California Avocado Commission vice-president of industry affairs Ken Melban says the state is never going to be able to compete with other countries when it comes to volume. Despite this, he says he believes that acreage in California is not going to continue drop, but will level off.

“We’ve got a premium product, it’s the closest to market, it’s the freshest, and we’ve got all the factors going for us,” Melban said.

New varieties coming online

There is some hope, however, that the California avocado market could one day grow again – and even thrive.

University of California researchers Mary Lu Arpaia and Eric Focht are working on breeding new, hardier varieties that could weather the more extreme temperatures in California’s Central Valley.

Arpaia and Focht point to varieties such as Lamb-Hass and Gem avocados as being more marketable to Valley farmers.

“We have some new [varieties] … that seem to hold [their] size well, and that’s a big thing,” Focht said.

Jon Stearns, of Kustom Ag Services, manages Nickel’s avocado groves in Visalia. Because of the heat, it’s not exactly a hotbed of avocado groves.

But Stearns and Nickel have managed to maintain 40 acres of avocados. While they’ve had to pull out some acres of Hass avocados (the most common variety bought and sold in the U.S.), Stearns says they’re not shying away from the crop.

In fact, Stearns recently went to visit the U-C research facility to see the new varieties that had been planted. He says he plans to plant some of the new varieties – and he hopes other Central Valley growers follow suit.

“There are a few guys here in the Valley that are interested, and they’re doing a lot of research on it,” Stearns said.

As for Nickel, he says he’s realized that Mexican imports are actually a blessing – even though California is no longer the dominant player when it comes to avocados bought and sold in the U.S.

“Now we have avocados year round. They fill in,” Nickel said. “As California’s market goes up, Mexico’s goes down. And then when we’re finished with ours, they come in.”

© 2017 KXTV-TV


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