“The farm bill is an omnibus, multi-year law that governs an array of agricultural and food programs.” According to the Congressional Research Service. The most recent farm bill is the Act of 2018, enacted into law in December 2018 and expires in 2023. According to the Congressional Research Service, this farm bill modified the structure of farm commodity support, expanded crop insurance coverage, amended conservation programs, reauthorized and revised nutrition assistance, and extended authority to appropriate funds for the USDA discretionary programs.
The avocado crop is identified in the 2018 Farm Bill, and it provides crucial resources in areas like specialty crop research, invasive pest detection and exclusion efforts, and foreign promotional funding. This was the result of collaboration between The California Avocado Commission and congressional members to stress the importance of the Farm Bill funding to the California avocado industry, according to the California Avocado Commission. Some of the benefits from being identified in the 2018 farm bill according to the California Avocado Commission are:
- $425 million of funding for state block grants for the next five years.
- $125 million for specialty crop research
- Increased access to fresh produce
- The Supplemental Nutrition Assistance Program (SNAP) was made permanent
- $75 million annually to the United States Department of Agriculture (USDA) for pest and disease program
Avocados are mentioned on the USDA’s Agricultural Marketing service website several times. The majority of its mentions are related to imports; the reason is that the United States import the majority of the avocados consumed. This mentions it establishes requirements for importing avocados; for instance, avocados must have a great of at least No.2, using the U.S standards of Florida Avocados as reference. Another requirement is its level of maturity; this is based on the color the fruit has and its size. This mentions also establish some exemptions for importing this fruit; for instance, shipments of 55 lbs or less may be exempt from grade and certification requirements.
Another mention that is crucial for the avocado industry it’s the marketing order. According to USDA, a marketing “order authorizes quality regulations, research, and promotion programs, as well as markings, packs, and container regulations for avocados grown,” according to USDA. Some of the regulations listed in this order are regarding size, grade, and maturity. Some research and promotion programs in the marketing order include paid advertisements and marketing promotion programs. Additionally, the marketing order authorizes regulations on the markings/labels, size, capacity, and weight of the containers used to ship avocados to the market. The marketing order is administrated by a committee consisting of 10 members, five growers, four handlers, and one public member. Members and alternates serve 1-year terms and can do a maximum of three consecutive years.
Since most avocados are imported for United States consumption, there isn’t any protective tariff by the U.S to affect the importation of the fruit. Nevertheless, there is a tariff that consumers must pay. According to Harmonized Tariff Schedule, the tariff of 1 kg of avocado is around ¢11.2 for general avocados. On the other hand, special orders of avocados have free tariffs in (A+, BH, CA, CL, CO, D, E, IL, JO, KR, MA, MX, OM, P, PA, PE, S, SG). Despite having a tariff, Mexican growers are confident that a change in tariffs will do little to dampen their sales, according to Chicago Tribune. This is caused by the high demand avocado has in the U.S market, and Mexico is the top exporter supplying for all this demand. That’s is why people refer to avocado as the “green gold” in Mexico, because despite any political change, it sells in high volume.
Since avocado has risen in popularity during the past decades’ companies that produce avocados have increased in size and in sales. Some of the big players in the avocado industry go as follows, according to the Mergent Intellect database.
- Henry Avocado Corporation
- Aguacates Seleccionados JBR
- Greenfruit Avocados
- Green Peru
- Mexican Hass Avocado Importers Association
The pie chart seen above was based on the Mergent Intellect database, information about the companies. We can see from this pie chart that the biggest company in the industry is Henry Avocado with sales up to $269,761,016.
Of these companies listed, I find it interesting the strategy of Henry Avocado and how it leads the market. This company was founded in 1925 as a year-round marketer, distributor, and seasonal grower of fresh conventional and organic avocados. Henry Avocados were among the first to plant avocados in San Diego County and became the strongest operation of avocados in the area. According to Henry Avocado, its mission is to provide customers with superior quality fresh avocados and excellent service. These avocados come from California, Mexico, Peru, and Chile in order to meet up the demand.
Figure 1: http://staging.henryavocado.com/media/
The company recently has released a voluntary recall for avocados sold in bulk because they can be contaminated with Listeria monocytogenes. “The San Diego County-based firm said it was issuing the voluntary recall “out of an abundance of caution due to positive test results on environmental samples taken during a routine government inspection at its California packing facility.” according to AgriPulse. To this day, there has been no illness associated with this report. This is excellent news because it shows a company that cares for its consumer’s health, and collaborates with other institutions just to provide a good relationship with its consumers.