nelsonic
commented
1 year ago Retail Price for a 2 year old Avocado Tree: €35.99
If you can get the distribution I.e. customers a tree nursery is a phenomenally profitable business. 💭
Open nelsonic opened 4 years ago
nelsonic
commented
1 year ago Retail Price for a 2 year old Avocado Tree: €35.99
If you can get the distribution I.e. customers a tree nursery is a phenomenally profitable business. 💭
Summary
Context
Avocados are widely regarded as one of the healthiest foods you can eat. ❤️ Demand has accelerated in the past 10 years and now has a Compound Annual Growth Rate (CAGR) of 5.9%. 📈 We love avocados and would eat them every day if they weren't quite as expensive ... 💸 We suspect other people feel the same way; they would eat more avos if they were cheaper. 💭
Health Benefits
Eating avocados is widely regarded has health, see: https://nutritionfacts.org/video/are-avocados-healthy
Alternative Use
Besides the obvious culinary use for breakfast, lunch and dinner, avocados are widely used in other products. Skin care, hair repair and other cosmetic uses are common. If we were to grow our own avocados we would have a sister company making and selling small-batch organic no-nasty soaps and skin products with our C-grade fruits.
https://www.lookfantastic.pt/antipodes-avocado-pear-nourishing-night-cream-60ml/10374561.html
Yes, you read that right, €39.95 for 60ml of product. 🤯
Whatever you think about the cosmetics industry. There is clearly a market for avocado products.
Trends
Avocado production has more than doubled in the last 20 years. https://www.statista.com/statistics/577455/world-avocado-production
According to Transparency Market Research (TMR), the global avocado market was valued at US$13.64 bn in 2018 and is predicted to attain an overall value of US$21.56 bn by 2026. The market is projected to show a healthy CAGR of 5.9% every year during the forecast period of 2018-2026. During previous years, the performance of the avocado market grew 104% from 2000 to 2016, with a total production of 5.5 million tons in 2016, and a 69% increase in harvested areas. https://www.transparencymarketresearch.com/pressrelease/avocado-market.htm
It is expected that European consumption will go from 650,000 tons in 2018 to more than 1,100,000 in 2020. Was estimated that during 2019, Europe’s imports surpassed 750,000 tons. (This remains to be seen as Covid-19 has disrupted supply...)
The trend toward Avocado consumption will only increase as plant-based health/nutrition becomes more popular/fashionable. https://www.inspirafarms.com/avocado-market-trends-hitting-2020
Economics
In Northern Europe (UK, Nordics, BE, DE, NL, FR, CH, etc.) avocados are typically sold per fruit with an average price of
€0.94, which given the average weight of a Haas avocado170g, is around€5.53/kg. In the UK M&S and Waitrose sell single large/A-grade fruits for£2/each. These are typically around 240g giving a per-kilo price of £8.33 or €9.07 at today's exchange rate. This is the per-kilo price of steak. 🥩The average supermarket price in Portugal is €4/kg. For context again, this is the price of Chicken or Beef. 🤦 Even though Avocados are grown in PT, 100% of the A-grade avocados grown in PT are exported (usually via Spain) for sale in Northern Europe because thats how farmers get the best prices for their produce. We can usually buy the B/C-grade avos (with cosmetic imperfections on the skin) in local farmers markets with price varying between €3.00 - €4.50/kg. Occasionally A-grade Organic are available in small quantities direct from a producer such as in local health food shops but the price can vary between €6-8/kg! 💰
It's difficult to find figures for the "farm gate" price per kilo of Avocados because the data is not widely available, however in 2019 the average price per kilo received by farmers was
€0.87/kg. So the farmer gets less than 20% of the price you pay in the supermarket ... 🙄 (This is typical of most agriculture with limited "added value". The middle-men and retailers keep most of the money in exchange for processing, transporting and merchandising).Cultivation
The vast majority of the world's Avocado cultivation is in Mexico. https://en.wikipedia.org/wiki/List_of_countries_by_avocado_production (figures in metric tons)
Portugal does not feature on this list because the Avocado agriculture is still young in the PT.
But France - which is further North from the equator - is reasonably established in Avocado production (2,518 metric tons).
Ideal Growing Conditions
The avocado tree is a tropical plant and does not like frost or temperatures under 50 degrees Fahrenheit / 10o Celsius. The ideal growing temperature for avocados is moderately warm 60 F - 85 F or 15 - 27o C. Once established, the trees can tolerate temperatures as low as 32 F (0oC) with minimal damage. Avocado trees prefer high humidity of 60 to 80%. They can also grow in dryer climates (with no less than 40% humidity), but more problems may occur with the fruit or tree. The tree needs a high level of moisture and plenty of nutrients in the soil.
Can Avocados Grow in Portugal?
The short/quick answer is: "Yes"! Portugal already has 1500 hectares, spread over 180 farms. (average 8.33 hectares per farm). Only around 500 hectares have reached maturity so far. The rest are at various levels and not yet fully producing.
If you observe a World Map including latitude (the horizontal lines), you will see that Portugal is around 40o North of the Equator: e.g:
This is a similar offset from the Equator to New Zealand, which is already 26th in the world in terms of annual production. (25,525 metric tons). France is further north than PT and they have a decent (rapidly growing) avocado production.
The Algarve already has the largest avocado plantation in Europe, but it's only expected to start producing fruit this past season, so there isn't any data on it yet. https://www.barlavento.pt/destaque/algarve-tem-a-maior-plantacao-de-abacates-da-europa
They expect to produce 10 tons per hectare from year 5 and up to 30 tons per hectare by year 10.
Planting Density
Traditional planting density for Avocado trees is 20 x 20 feet (6 x 6 metres) which allows 110 trees per acre (272 tress per hectare). High density planting is 10 x 10 feet (3 x 3 metres) and trees are pruned when they grow above 3 meters tall. This means all fruit picking can be done from the ground and no expensive telescopic cherry picker (machines) are required.
https://www.thepacker.com/article/high-density-planting-technique-helps-boost-yields
Higher density planting improves water efficiency and lowers picking costs. The higher pruning costs (twice per year) are offset by better protection from wind and hail. Farmers in Chile, Columbia, New Zealand and South Africa are adopting the higher-density method on new/renewed farms.
High density planting is already widely used in the citrus industry.
Water Usage
Avocados are thirsty trees so we will need abundant/unlimited water #21 e.g: a year-round flowing river which is why we are only considering land https://github.com/dwyl/phase-two/issues/25#issuecomment-543012211 that borders a river. We will need an irrigation system:
Recent improvements in soil (moisture) monitoring and targeted drip irrigation mean that water efficiency has improved by 90 - 200%. The issue is that these systems require investment which some farmers cannot afford. In Portugal the main producers have managed to significantly reduce water use so it's at comparable levels to Orange growing:
Relevant Videos
These video gives a good/brief history of avocado cultivation:
Further Reading