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Worth Their Weight In Gold

Low yields in this year's harvest drive avocado prices through the roof.

by Chris Sayer

How could it be that here in Ventura County – one of the top avocado producing areas in the world – avocados have become so expensive? Two dollars apiece is not uncommon in grocery stores. What’s going on?

The answer, in a word: Economics.

Supply and demand.

Avocados on tree

Ventura avocados. A mainstay of the national harvest, this year’s production shortfalls are driving prices sky-high.

This year, California’s avocado supply is down. There are several reasons for this, ranging from last year’s cool weather to lost orchards in the San Diego area. But the fundamental reason is that avocado production always varies widely; the avocado tree is naturally prone to “alternate bearing.” A tree that yields one hundred pounds this year might produce two hundred in the next year, and only twenty in the following. A rule of thumb for avocado growers: “Average” is the one number you almost never see.

This year, California’s production is exceptionally low. By the time the harvest is in, the state will have produced less than three hundred million pounds of avocados this year; possibly as low as two hundred forty million. That sounds like a lot of guacamole, and it is. But consider for a moment that the 2010 season yielded 489 million pounds of California avocados; Ventura County growers expect to see production down 60 to 70% or more. When the supply of something gets cut in half, prices respond.

Wouldn’t the globalized marketplace for avocados step in and make up the difference? Normally it does. But Chile’s season comes late in our summer, and production is off in Mexico as well, so there is simply not enough fruit to meet the demand.

Are these high prices cause for farmers to celebrate? No, at best they are cause for relief. Most of the costs of running a farm are incurred regardless of the amount of fruit produced. Water, fertilizer, labor, insurance, mortgage payments and property taxes all must be paid, whether one has avocados to sell or not. So while growers are very happy that prices are twice their usual levels, that fact simply helps to offset this year’s production downturn. Despite the prices, nobody is getting rich on avocados this year; for most it will be break-even at best.

Are two-dollar avocados here to stay? Probably not, although it is too early to tell what the next year holds. But if you happen to have a productive avocado tree in your backyard, count your blessings and enjoy!

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