Growers in Florida's $100 million-a-year avocado industry could see a rise in the price of avocados in the short term due to a reduction in domestic production, because of the deadly Laurel Wilt pathogen, a new University of Florida study shows.
But any noticeable price increase probably wouldn't last because increased imports from the Dominican Republic are likely to temper any price increases.
Edward Evans, a UF/IFAS associate professor in food and resource economics, is quick to note, however, that he conducted his study before the recent discovery of a medfly outbreak in the Dominican Republic. The outbreak led the U.S. Department of Agriculture to restrict imports of green-skin avocados from that country. This avocado is similar to the type produced in the Sunshine State.
Florida, primarily Miami-Dade County, grows green-skin avocados, which account for about 12 percent of U.S. avocado production. The other 88 percent – known as Hass avocados -- comes largely from California, with a bit grown in Hawaii.
Florida imports lots of avocados from the Dominican Republic. Between 2004 and 2013, U.S. avocado imports from the Dominican Republic went up from 8,477 tons to 14,397 tons. Until recently the Dominican Republic supplied about one-third of the green-skin avocados consumed in the U.S.
The Laurel Wilt pathogen is starting to kill some Florida avocado trees. So far, 8,000 Florida trees – a little more than 1 percent of those grown here -- have been destroyed because they were diseased. UF/IFAS scientists are working on solving the Laurel Wilt issue.
Evans, who works at the Tropical Research and Education Center in Homestead, conducted the study, published online in the June issue of the journal HortTechnology.
Through the study, Evans wanted to quantify the likely impact on avocado prices due to decreases in domestic production caused by the continued spread of the Laurel Wilt disease.
For his study, Evans examined several factors, including the wholesale price of green-skin avocados, monthly shipments of Florida avocados divided by the U.S. population, monthly shipments of avocados from the Dominican Republic divided by the U.S. population, monthly shipments of Hass avocados divided by the U.S. population and per capita U.S. disposable income.
In what Evans considers a key finding, price increases and hence, expected revenue, might not be enough to compensate growers for the higher costs to manage the disease.
But Evans said the USDA's recent actions in response to the Dominican Republic medfly outbreak could change the outcome of his analysis because it means avocado supplies have been curtailed considerably.
"This augurs well for domestic producers who are able to manage the disease at a reasonable cost and stay in production, he said.