Australian avocado prices are at a record low but farmers fear bumper yields could leave them toasted

Smashed on toast, chopped in a salad, whipped into the perfect guacamole — any way you cut it Australians love their avocados. In a relatively short time their versatility, combined with their gold-star status as a healthy food, have propelled the rise of these humble fruits — yes, avos are fruits — from niche green grocers and roadside stalls to a 120 per cent jump in avocado production in Australia to last year, with WA one of the major growth centres. This year Australians are set to enjoy a bumper crop — the biggest on record — thanks to perfect growing conditions and young trees coming into production. But while good news for consumers, it’s avocado farmers who look like getting smashed. Low prices linked to the glut, a shortage of pickers, increased competition from New Zealand, and a hospitality sector and nascent export trade disrupted by COVID-19 have left some growers fearing they’ll lose money on every tray sold of “Our Green Gold”. Avos are selling for as little as a dollar each in major supermarkets. In the past they have fetched as much as $4.50-$5. John Tyas, chief executive of industry body Avocados Australia, said it added up to a fraught situation for producers. “The price of a tray is so low that in some instances growers (in Queensland) are supplying below the cost of production,” Mr Tyas said. Manjimup Shire president Paul Omodei, whose area is WA’s avocado heartland, said unless retail prices increased by the time the State started harvesting, growers would need to pick about two or three times the quantities of last year to get the same return. “The producer receives about half the retail price for avocados. If they’re $1 in the shop, growers would be paid about $10 for a tray,” Mr Omodei said. “They have to pay $6 per tray for packing, and then there’s the cost of picking etc. They’re left with bugger all or less. Prices really need to retail at $2-$3 for the producer to get a reasonable return. “Even this is a good price in the shop — people think nothing of spending $4 or more on a cup of coffee, while an avocado can provide a whole meal.” Mr Omodei said avocado trees were biannual crops — typically producing light fruit one year and heavy the next. “This year has turned out to be a heavy fruiting year, complemented by good pollination and ideal growing conditions,” he said. That means bargain prices are likely to remain through summer. Most of the fruit on our shelves now is from Queensland — Australia’s biggest avocado-growing State, which is in the middle of harvesting its biggest crop yet. In WA, we’ll start seeing local fruit in stores from late this month, when our growers will start picking. WA farmers are expecting their crops to be at least three times bigger than last year, when production was below average. Mr Tyas said overall Australian farmers were expected to produce 19.8 million trays, thanks to the excellent conditions and younger trees that were now starting to bear fruit. This year WA expects to pick its biggest harvest on record during the season, which will run until February. WA farmers expect about 8.2 million trays, each containing an average of 20 avocados depending on size — up from 2.4 million trays last year when WA had a particularly poor season. The rest of Australia will harvest about 1.5 million trays over the same period, meaning almost 10 million trays — or 200 million avocados — will come off Australian trees during the seven-month window. One thing working in WA growers’ favour is their harvest is during summer — when Queensland production slows down — and being a popular salad-type fruit, consumption typically increases in hot weather. Mr Tyas said fruit size and quality this year were excellent. “In terms of production the regions are in for a cracking harvest. The challenge is where is it all going to go?” he said. At the same time supply has increased, COVID has dampened demand. Cafes were typically big sellers of avocado dishes, but lockdowns and restrictions have caused demand in this sector to slow. Exports are one of the industry’s big hopes. Only 5 per cent of Australia’s production has been exported in the past — mostly to Singapore, Malaysia and Hong Kong. WA was one of two Australian States that gained access to Japan in 2018 — but coronavirus threw a spanner in the works. “Virtually all of our exports were airfreighted. With COVID, that grounded flights and there was a real shortage of capacity. Last year there were no flights to Japan, so we couldn’t get our fruit there,” Mr Tyas said. He said avocado prices were more expensive and less competitive against other nations, given the poor yielding season. But with this year’s price crash, Australia’s fruit was now more attractive to export markets. “There’s also been a real shift to sea freight, which helps us be competitive in those export markets,” Mr Tyas said. “We hope to grow our exports quite significantly this year, then set it up for the future to keep supporting those new export markets.” But despite Australia being set to produce more than enough to satisfy the nation’s consumption, supermarkets may import millions of trays from across the Tasman. Mr Tyas said preliminary forecasts indicated New Zealand — which usually supplements the Australian crop — was planning to send almost 4 million trays. “We don’t need the additional supply, we can supply the whole of Australia and our export markets this year without that,” he said. “All we can do is urge the retailers to support Australian growers. The major chains spruik the mantra that that’s what they’re about and we want to encourage them to do what they say they do.” In 2019-20, Australians consumed 3.88kg per person a year. Avocados Australia wants to see that increase. Mr Tyas said a domestic advertising campaign “Our Green Gold” — funded by grower levies — was being aired to encourage avocado consumption and choose Australian fruit. Manjimup grower Travis Luzny said an added concern with New Zealand imports was that excess fruit would slow the movement of product from wholesaler to retailer, reducing freshness and quality. “That would reflect badly on Australian avocados through no fault of our own,” he said. Labour shortages are causing further woes for producers. Mr Tyas said growers were worried about sourcing enough pickers and the cost. He said some bigger growers had utilised the Pacific Labour Scheme, where workers are imported temporarily from the Pacific Islands, but this was expensive because of travel and quarantine expenses. “When you factor in all the other costs of bringing the people in, it’s about $40 per hour for what would normally cost less than $30 per hour. These growers are looking at added costs and much lower prices,” Mr Tyas said. Shane Blakers, who farms with wife Courtney and parents Bevan and Denise, has a 75ha avocado orchard, with 22,000 trees. The family will take on six workers this harvest via this scheme, with their group due to arrive on farm on September 30 after quarantining in Perth. They are hoping to get backpackers to top up that number, given their usual requirement is for about 24 extras during peak harvest. “It’s new territory for us and works out very expensive, but the problem is if you can’t get anyone else, there’s little choice,” he said. Another Manjimup producer, Vic Grozotis, estimates at least 250 people will be needed just for Manjimup pack houses during the WA harvest, with considerably more needed for picking and by other production areas. “We are going to be paying significantly higher wages for harvesting fruit and getting lower prices, it may cause some producers to question their viability,” he said. Australia has about 16,000ha of avocado trees operated by 800 farming businesses. That includes 230 WA operators, collectively growing 3400ha, Avocados Australia says. The bulk of those are around Pemberton and Manjimup, but there are also avocado farms in Gingin, Perth Hills, Donnybrook and Busselton. With demand for the product growing each year, plantings are increasing and corporates have been keen to get a taste of the action. In late 2018, brothers Neil and Ian Delroy sold their 360ha operation — then the second- biggest in Australia — to Canadian super fund Ontario Teachers’ Pension Plan for a rumoured $180 million. OTPP has since bought further land to increase plantings. ASX-listed investment vehicle Alterra is planning a 300ha avocado farm at Pemberton. Shane Blakers said he had had planned to plant more trees in coming years, but given current tough conditions, this decision could be reviewed. Mr Tyas said about half of all trees planted across Australia were yet to reach full production, while more trees were still going in the ground. “I suspect some orders for new trees could be cancelled after this year, but production is still set to grow,” he said.

Australian avocado prices are at a record low but farmers fear bumper yields could leave them toasted

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