California and the International Community: Looking to soil as a climate smart agricultural strategy

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1. SEMINAR on Tue, Dec 5, 2017 9:00 AM - 11:00 AM PST

This webinar will bring together public and private representatives from California and around the world to discuss the barriers, strategies and success stories related to soil health. Specifically, this webinar is designed to: help identify what composes healthy soil; explore how CA and the international community have been affected by soil erosion; learn what public and private institutions can do to improve soil health; tell the success stories of soil health improvements on the field (both in CA and around the world.)

Registration: http://register.gotowebinar.com/register/5217479928986888962

Assessments on your Crop

It is not a tax. It’s an assessment. So say the two groups who take assessments from California grower returns. These two groups, the Hass Avocado Board (HAB) and the California Avocado Commission (CAC), are different in structure, in charter and in their taxes assessment rates.

The Hass Avocado Board is chartered by the USDA to promote the consumption of Hass Avocados in the United States. It gets assessment fees from all Hass, Lamb Hass and GEM avocados sold in the US by both domestic and foreign producers. 85% of that assessment is returned to the country or state commission of origin. They must spend the assessments on US advertising and marketing. California growers pay 2.5 cents per pound to HAB and 2.125 cents of that money is given to the CAC. .375 cents remain with the HAB. HAB uses their 15% to meet their strategic priories including building demand, nutrition, supply and demand data, quality, industry engagement and sustainability. In their 2016 annual report, HAB received $54.7M in income and rebated $46.4M to the associations/commissions of origin. Their total marketing/research/communications expenses were $7.6M. Not too bad considering that their work seems to have changed perspectives on the healthy qualities of avocados – healthy fat, heart healthy, weight friendly and good for babies.

The California Avocado Commission was constituted by the State of California Department of Food and Agriculture. The CAC goal is to provide those engaged in the production of avocados the opportunity to avail themselves of the benefits of collective action in the broad fields of 1) advertising; 2) promotion; 3) production, nutrition, and marketing research; 4) quality and maturity standards; 5) the collection and dissemination of crop volume and related statistics; and 6) public education. The law says, “The production and marketing of avocados produced in this state is hereby declared to be affected with public interest. The provisions of this chapter are enacted in the exercise of the police power of this state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state.” Weird -- Police Power – am I right? The CAC assessment for the 2016-2017 crop year was 2.3% of grower sales income for every type of avocado sold to a handler or sold directly. For every $1 paid, a grower paid CAC 2.3 cents. If you received $1.50 per pound, you paid 3.45 cents to CAC. In their 2016 annual report, the total revenues were $15.3M with marketing expenses taking up 64% of the budget at $9.8M. Within the marketing category, consumer advertising comprised a $6.2M expenditure and merchandising promotions comprised another $1.8M. Production research was $0.9M or 6% of the budget. Industry affairs was $1.17M or about 8% of the budget and administration was $3M or about 20% of the budget.

You likely recently received a letter from the California Avocado Commission (mine was dated 9/14) telling you your status for the next growing year: exempt or have to pay the CAC assessment for the 2017-2018 crop year. Growers who produced under 10K pounds average over a three-year period ending with the 2015-2016 crop year don’t have to pay the CAC assessment. This is good news if you don’t feel like CAC provides any benefit to you, but bad news if you want to have a say in CAC’s focus. CAC’s exemption doesn’t exempt you from the HAB assessment.

The 80/20 rule holds true for California avocado growers with a small number of growers producing the vast majority of fruit for sale. If you want to opt out of paying Commission fees or you want to opt in, you should talk to your local CAC representative and state your preference.

Subscriptions to the Weekly Newsline

It is the mission of the California Avocado Society to promote efficiency of production and orderly marketing toward assuring long term profitability for the business of avocado growing. The Weekly Newsline is 6 pages of industry information, wholesale sales prices, inventory, weather and other useful information. Geared towards growers, it provides both beginning and experienced farmers a wealth of information about the avocado business. 

Here's what readers are saying:

• I’m amazed at your voracity for more facts and your never-ending digging into stuff most of your recipients never knew or have long forgotten about.  You impress me every edition and I can hardly wait till the next. - RF
• You’re doing a great job!  Very funny and informative at the same time. I’m giving your newsletter a big thumbs-up.  Keep it up.  You’re rocking it! –JD
• Lovely work, keep it up, you will stay young this way--BF
• Another great Newsline! --LM
• Great job on the Newsline.  A pleasure to read these days.  Like your opinions even if I don't always agree.  It makes for much more interesting reading. --WC

To subscribe as a Newsline Member of the Society, visit our membership page. For a sample copy, contact the editor directly.

California avocados versus the world

I thought it would be interesting to see where our harvest stands in comparison to the other suppliers of Hass avocados to the US. I used the data from the Hass Avocado Board for “Arrivals” from 2008 to 2016. Here’s how we stack up. 

The two Annual US Arrivals charts show different looks of the total US arrivals and the amount California’s harvest contributed. We’ve had a relatively consistent California harvest with a mean of 338M pounds. During this 9-year period, our highest harvest was 516M pounds in 2010 and the lowest was in 2009 with 159M pounds (alternate bearing years, perhaps?) Clearly seen in the charts is the steep increase of overall arrivals, from less than 1 billion pounds in 2008 to more than 2 billion pounds in 2016. During that same period, California’s harvest has remained relatively flat, which is obvious in the line chart.

I used the HAB numbers to calculate each country’s annual contribution by percentage. In the chart below, the blue line represents California. Note that our percentage is declining on a consistent basis as Mexico’s is growing. We are now consistently under 20% of the overall avocado market in the US. Our lowest year was 2015 with only 12% of the market. 2016 was a big harvest year for us with 366M pounds and we only tagged in at 16% of the overall arrivals. This year, with our smaller crop, we are likely to be less than 10% of the overall arrivals once the final tally is done.

Editorial comment starts now. I have heard CAC’s Tom Bellamore’s “Premium” positioning talk which is an exciting concept. CAC’s web site says, ““Premium” positioning, supported by consistently high-quality production that is delivered to consumers soon after harvest, is at the heart of our long-term strategy.” But, how many buyers look for the California label? I never did before I became a grower and started writing the Weekly Newsline. And, I wander through my grove with my 5-year-old granddaughter as she sings, “Avocados from Mexico, Avocados from Mexico, Avocados from Mexico,” I wonder if premium positioning to the sophisticated consumer is possible with the enormous Avocados from Mexico (AFM) advertising budget. Yes, California fruit tastes better and is a huge benefit to our local markets in the West since our fruit is “farm to quickish-truck-ride to table.” And, retailers continue to pay a small premium for California fruit since they know they will get longer shelf life. But, with handlers getting increasingly higher revenues from imported avocados, AFM’s huge expenditures on advertising, and California’s shrinking percentage of the overall market, it’s a stretch to believe that we can expect special attention from anyone as we move forward. Is it possible to ride on AFM’s ads for increased consumer consumption and save our precious CAC dollars for discovering a better tree, a better rootstock, a better irrigation methodology, etc.?