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Mission’s Peru production gaining momentum

Mission Produce Inc.’s avocado production from Peru is getting a big boost this year as it has a new ranch coming into its own and producing a good-sized crop.

Robb Bertels, vice president of marketing for the Oxnard, CA-based firm, revealed that a handful of years ago Mission secured three different groves in Peru and began planting avocados. In total, those groves have about 5,000 acres of Hass avocado trees. Two of the ranches, located in the middle of the country, have been in production since 2013. This year, the most northern ranch, comprised of about 600 hectares (almost 1,500 acres), has come into production, giving the firm a boost in volume.

Like other grower-shippers in the region, Mission expects to bring a greater volume of Peruvian avocados into the United States this year, largely because California has such a small crop.

Mission-Peru-avocado-harvestHarvest workers load avocados into a field bin in a Mission Produce orchard in Peru.Peruvian experts have estimated the crop at about 500 million pounds, with close to 150 million pounds destined for the U.S. market. Bertels said that closely mirrors Mission’s expectations for its own volume. The company will market the majority of its fruit from that region in Europe, with the U.S. market taking 25-30 percent and a smaller amount headed for Asia.

He noted that Peru’s fruit will be shipped to the United States over about a 16-week period and marketed for about 19 weeks, as any particular shipment tends to be marketed over a three-week period.

Mission began shipping into the United States with early-May arrivals, and will conclude its shipments sometime in August. He said the strong market in the United States is responsible for pulling extra fruit into the region, but he said Europe is also riding a strong market that is equivalent.

“With the different exchange rate and the different size carton, it’s difficult to compare exactly, but the price works out to be fairly similar,” he said.

Bertels said that sales increase during the summer in Europe and he expects a strong market throughout the Peruvian season.

Returning his attention to the U.S. market, Bertels told The Produce News May 30 that it was in a bit of a flux because of the normal decrease in demand following the Memorial Day holiday. “But we expect that to be short-lived and for the strong market to return shortly.”

He reasoned that Mexico’s volume continues to shrink this season and California is quickly marketing its crop. “I don’t think we are going to hit 50 million pounds per week anytime soon, which is what the industry has become accustomed to,” he said.

He added that volume in the low 40 million pounds per week in the United States will keep the industry in a very strong position of demand.

Like others in the industry, Bertels believes Peruvian fruit is up to the task of delivering a great experience to consumers this summer.

“For a couple of years, it was looked at as a discounted piece of fruit,” he said. “But now it is accepted in the U.S. market a bit better as Peru is providing consistency, a good taste profile and good quality.”

While he expects a strong market throughout the summer, Bertels looks forward to the return of promotable volume once Mexico’s new crop kicks in fully, probably in September.

“While this high market is good for growers and good for California, when it gets too high that’s not necessarily good,” he said.

Promotable pricing creates new users and ultimately increases total consumption, Bertels reasoned. As the price gets too high, new users are most likely reluctant to jump in and develop a taste for the fruit. Those new users could be very important next year when both Mexico and California are expecting a return to bigger-volume crops.