Avocado growers say prices have hit their peak while supply continues to skyrocket
In good news for avocado lovers, they have likely paid the most they will ever pay for an avocado during summer, and the popular fruit will keep getting cheaper.
Over the past decade the avocado supply in Australia has skyrocketed, with production increasing by nearly 60 per cent according to Hort Innovation Australia.
But up until now, demand has also been through the roof and only seasonal factors led to cheaper avocados.
This year, however, things have changed, and demand seems to have plateaued for the time being while supply is still on the up.
According to one of Australia's leading avocado growers and distributors, Russell Delroy, it is the price drop that has been expected for a long time.
"It's a general trend going forward," he said. "[Avocado farmers] will look back at this year and think this year's values were particularly good."
Mr Delroy said with the supply of avocados across New Zealand and Australia up 30 per cent on what it was last year, combined with a cooler weather and tougher economic climate, it was going to be a challenging season ahead for farmers.
He said prices were down on average 35 per cent per tray.
For consumers, however, any significant price drop might take a couple more years.
Mr Delroy said supermarkets would likely take this year as an opportunity to make better profits.
But he said the cheap prices would come in the next few years when supply increased further and it became more challenging to increase local demand.
"Typically when prices get very high supermarket margins get squeezed," Mr Delroy said.
"As values fall the supermarkets will try to get a little more margin, but [consumers] should see better price points."
Mr Delroy's comments have been seconded by Avocados Australia chief executive John Tyas, who said the prices consumers were paying at the moment were ideal.
"I think that $2 to $2.50 retail price point is pretty fair value for everyone," he said.
"Avocados aren't an easy crop to grow, and they're quite an expensive crop to grow, so I think at that retail price point everyone can make a sustainable amount."
However, prices over the summer months of January and February when Western Australia is the only state to be producing avocados are expected to remain dearer.
Future demand may increase:
The avocado industry is still hoping demand will increase into the future and new export markets will take up some of the supply increase.
Mr Delroy forecast prices to drop to "about $2 a kilo" over the next five years, from between $4.50 and $9 a kilo that avocado growers have grown used to in recent years.
He said for Western Australia where he is based, it would remain a strong industry.
Mr Tyas said the demand was not quite at a ceiling yet for Australian consumers.
He believes the industry could eventually increase demand from 3.5kg per person to 5kg per person on average.
But he admitted it would take a lot of work.
Source: WA Country Hour