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Tuesday, November 30, 2021

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Changing times for the ‘Green Gold’ as supply outstrips demand

Words // Carmen Miller

For the past five years avocados have been the jewel in the crown of Far North Queensland’s agricultural sector.

In September 2020 the gross value of production for Australian avocados was estimated at $493 million, with North Queensland alone producing 23,000 tonnes over the 2018/19-2019/20 period.

Such statistics bring into clear focus the immense contribution of the avocado industry to Far North Queensland’s economy.

Despite this, a combination of factors has culminated in a drastic reduction in the fruit’s farmgate price, forcing producers to reevaluate their operations and adapt their processes.

Ernest Raso of Hinterland Avocados, located in Tolga, stated that such an outcome was inevitable due to the huge spike in plantings of new growers and existing growers expanding their footprint.

“In my opinion it was a matter of when this situation would be upon us, not if,” Mr Raso said.

“The sheer number of trees now in production and with all of those trees producing record crops in many of the growing regions, it had to have an impact.

“Add to this the fact that those regions are all harvesting at the same time and lockdowns in heavily populated areas are leading to less consumption, and all has culminated in creating a disaster in a returns-sense for the grower, but a huge win for the consumer.”

Financially, Mr Raso’s business has been drastically impacted due to the oversupply, resulting in a significant decrease in sale price per tray compared to last year’s figures.

“It has taken a huge toll on our operation; I think it’s impacted everyone,” he said.

It is estimated that today Australia is home to three million avocado trees, with half of those having been planted in the last five years alone, further reiterating Mr Raso’s sentiments.

According to CEO of Avocados Australia, John Tyas, the conditions experienced in the avocado market in 2021 will not be unique, with half of the country’s newly planted orchards yet to reach full production.

“Avocado production nationally is 65 per cent higher this year since last year,” Mr Tyas said.

“This isn’t an issue just this year, it’s going to be an ongoing issue with ongoing supply.”

Close up of avocados cut into halves on a black background. Dill leaves along with avocados on table.

This perfect storm of factors is only further exacerbated by cafes and restaurants within the major cities periodically going into lockdown.

Looking to the future, with such a sharp increase in production, it is unlikely domestic demand will outstrip supply.

“It must be said and was proven this season just gone, the consumption rate was not directly related to the cost of fruit per piece in the shops,” Mr Raso said.

“Whilst the price within shops continued to drop and specials continued to be run, the amount of fruit leaving the shops did not go up as a direct result; leaving one to ask many questions, which to date remain unanswered.”

This was a point Mr Tyas also touched on, stating that looking further afield was the next logical step in the process of ensuring the viability of the avocado industry.

“We’re doing everything we can to build demand as fast as we can domestically, but also to open up new export markets,” Mr Tyas said.

“Supply is definitely exceeding demand at the moment.”

However, while such avenues are explored, growers on the Tablelands are looking closer to home for mitigation strategies in a bid to keep their operations successful.

“There will always be down periods in farming, that’s the nature of the game,” Mr Raso said.

“There will be no magic wand solution… so now we must focus on quality and efficiency improvements and try to find solutions together as an industry to be able to all stay afloat.

“I think this is achievable, particularly with industry bodies like Avocados Australia putting in lots of work behind the scenes to assist the grower.”

With experts estimating that 23.5 million trays are expected to be dispatched nationally between April 2021 and March 2022, additional export markets, peak industry body support and an increased local appetite for the fruit will be critical to the ‘green gold’ maintaining its viability well into the future.

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