Mexico's export boom - Hass

Bigger than ever. Mexico seems to have limitless supplies of avocados; from a recent USDA FAS attache report comes this outlook on Mexican avocado exports.

Mexican avocado exports are forecast to reach a record 300,000 MT in MY 2007/08, a nearly 11 percent increase over the MY 2006/07 figure. This increase is due to a combination of factors, including; 1) year-round market access to all 50 U.S. states, 2) the decrease in Chilean production as well as a recent freeze, and 3) recent wildfires in southern California that destroyed approximately 10 percent of the current crop. Reportedly, producers and packers had been concerned for some time that open access to the U.S. market might lead to market saturation, and eventual downward pressure on prices. In order to avoid such a situation, producers and packers limited their exports by harvesting only 2 MT/hectare. However, producers have suspended this practice but only to the extent to which they are still able to avoid market saturation. Michoacan growers currently have the capacity to harvest 10-15 MT/ha if there is no threat of market saturation. Growers and packers have forecast MY 2007/08 avocado exports to the United States at 200,000 MT. Exports to the U.S. in MY 2006/07 were 166,830 MT, while exports in MY 2005/06 were 129,482 MT. As of January 31, 2005, Mexican Hass avocados were granted access to all U.S. states except California, Florida, and Hawaii. On February 1, 2007, Mexican Hass avocados were allowed access into all 50 states on a year-round basis. Currently, 25 packers are officially eligible to export Mexican avocados to the United States under the APHIS export program. The main destinations for Mexican Hass avocados within the United States are: Texas, Illinois, New York, Georgia, Colorado, Arizona, Washington, Massachusetts, Maryland, Indiana, Minnesota, Kansas, Oregon, North Carolina, and Florida. Export figures for MY 2006/07 were revised upward to 270,541 MT due to increased export markets. These higher-than-expected export numbers are due to greater demand from international markets. To this end, growers ceased restrictive harvesting practices once the U.S. market opened January 2005. MY 2005/06 export figures remain unchanged. Although the majority of avocado exports are destined for the U.S., other markets including Japan, Canada, France, and El Salvador are also significant. Unlike the U.S., these markets do not require APHIS accreditation. According to both official and private sources, the export market continues to be profitable to producers, but the domestic market still represents the main business platform for most Mexican avocado farmers. Official data indicates that Mexican avocados were exported mainly to the United States, Japan, Canada, and El Salvador. Exports to Japan and the EU continue to represent a strategic market niche for producers and packers. In September 2005, USDA and SAGARPA signed a work plan to allow access for U.S. Hass avocados into Mexico. For the first 12 months of the work plan, avocados were allowed to export to all states except: Michoacan, Jalisco, Morelos, Puebla, and Nayarit. In September 2006, U.S. avocados were officially allowed to export to all Mexican states, but exports to the non-border states is minimal. Reportedly, Mexico will be importing California avocados for processing and eventual re-export to the United States. As a result, Mexican imports for MY2007/08 are forecast to be slightly up from those of MY 2006/07 at 1,000 MT. MY 2006/07 imports were revised downward to 897 MT due to ample domestic supplies. MY 2005/06 figures remain unchanged.