Looming Federal election

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

 

We’ve all seen the increased news coverage, the flurry of funding announcements and policy pledges; the next Federal election can’t be far away. The National Farmers’ Federation (NFF) has developed its 2019 Federal election priorities, including some of importance for horticulture.

Avocados Australia is represented on the NFF Horticulture Council via our paid membership of the Voice of Horticulture.

The NFF document includes a priority ask for a commitment to act on labour shortages. It says, in part:

Farmers continue to be constrained by an inability to attract the workers they need. Agriculture will always rely on a combination of domestic and international workers to get the job done, and we need to do more to attract and train those workers. The NFF seeks a commitment that an incoming government will:

  • introduce a new Agricultural Visa to specifically address unique skills shortages; and,
  • establish strategic programs to attract more Australians to a career in agriculture.

The NFF will also be pushing for the establishment of a National Agricultural Labour Advisory Committee, that wages be kept in line with productivity and that any new government “resist a reactionary response to labour market ‘casualisation’”.

“The seasonal nature of agriculture lends itself to utilising casual labour, which currently accounts for 26% of our workforce. Although we accept the need for a policy response to growing rates of casual employment across the economy, we urge government to resist overregulation of labour hire licensing, and draconian moves to ensure casual equivalency. The NFF seeks a commitment that an incoming government will: address the confusion created by the courts (Workpac v Skeene) and introduce a practical definition for a “casual” employee,” the document says.

This article was produced for the April 2019 Avo Insider.

Potential American shutdown could impact

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

We received some suggestions via social media this week regarding the potential if American President Donald Trump shuts down the border with Mexico. There may be an impact, just not one we’d like.

However, the truth could be much more problematical. Not only is the US not one of our markets, due to the distance and the fact we don’t have market access, US consumers eat the equivalent of our annual national production in just over two weeks.

If (and it’s a big if*) the US president does shut the border, Mexico will be looking for other markets in Europe and Asia. The Australian industry is already competing with Mexican product in Singapore and Malaysia and as we already know, we simply can’t compete on price. Now, image those same markets when Mexico is trying to find a new home for the equivalent of half our national production almost every fortnight.

Avocado is a global trade and increasingly, we are going to be affected by that global market as our own production increases and as other producing countries look for new or expanded markets.

As a side note, it turns out the speculation of a border shutdown brought good news for both domestic American growers, and exporters from Mexico, as prices jumped 34%. This was the biggest gain in a decade, however, it may have been due more to supply availability than concerns about the future.

* The President has since walked back on his border closure threat somewhat, instead issue a “one-year warning” according to The Guardian, and threatening tariffs on cars. While the threat of running out of avocados may have dominated the US news coverage, the uproar about the enormous economic impact on the US no doubt came into play.

This article was produced for the April 2019 Avo Insider.

Food safety and avocados

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

 

Recently, there was an avocado recall in the United States. The recall, for Californian fruit destined for the domestic market, was precautionary but it should be taken as a cautionary tale for us all.

In this case, Henry Avocado issued a voluntary recall for fruit across six American states, “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”.

The recalled products – California-grown conventional and organic avocados — were packed at Henry Avocado’s packing facility in California and distributed in Arizona, California, Florida, New Hampshire, North Carolina and Wisconsin. All shipments from the packing facility were subject to the recall but avocados imported from Mexico and distributed by Henry Avocado were not subject to the recall. Read the company’s statement here.

Media interest

This issue garnered significant interest from domestic US news outlets and social media users, but had, from what we can see, limited coverage in other avocado consuming markets. That said, it was mentioned in Europe, Asia and Latin American media and social media.

We did monitor this incident carefully, to see if there were any lessons we could use to update the industry’s crisis management plan, and to ensure that our domestic and international consumers were not alarmed.

Avocados are part of popular culture (they got another mention recently in Bill Shorten’s budget reply)but that means people are going to care about product recalls like this.

Lessons for the Australian industry

The good news is, the Henry Avocado approach – being upfront, stressing it was precautionary, that no-one had become ill and directing their customers to unaffected produce – worked. While there was a lot of sustained domestic American coverage, it was largely a simple statement of fact mixed in with advice on how to wash an avocado.

There was also some significant love from customers on social media, including these examples from Twitter:

Impact of any incident for the Australian industry

We only have to look to the melon or strawberry industries for an idea of how seriously any food safety issue would be for our industry.

It’s been reported a listeria incident in 2018 cost the Australian melon industry $60 million.

And Queensland’s Department of Agriculture and Fisheries found there would likely be a 14% drop in the value of the strawberry industry in 2018/19 after the needle crisis with media reports equating that to a $12 million hit. Other reports (behind paywalls so we can’t provide links) have indicated some growers did leave the strawberry industry because of the impact.

The cost will not be in lost sales alone. Strawberry packsheds started installing metal detectors after the September 2018 incidents, and melons introduced a new grower-funded project providing individual guidance on food safety for rockmelon growers. The Melon Association even sent microbiologists to every packing shed to carry out swab tests as an extra safety measure.

Proactive

Avocados Australia has been proactive in helping our members and the wider industry understand some of the risks around food safety, so we can all be informed, united and proactive in case the worst does happen.

In the Summer 2019 edition of Talking Avocados you would have seen a summary of some recent research from America, about the presence of listeria and salmonella on some fresh avocados and in processed fruit.

Certainly, our industry needs to be ready in case the worst happens, but we can also ensure that we are applying the highest standards of food safety, to reduce the potential.

Useful links

The Fresh Produce Safety Centre has a range of resources around food safety culture, including:

You can also find more about food safety in the BPR: https://avocado.org.au/bpr-articles/food-safety/.

 

This article was produced for the April 2019 Avo Insider.

Avocado consumption still rising

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

One of the key agenda items for our industry is increasing the consumption of our product. This is important as domestic production increases and we face the possibility of international competition for our avocado-loving consumers.

I was interested to recently read in Good Fruit and Vegetables that vegetable consumption in Australia is stagnating, with no significant increase in the past six years.

According to ABARES March 2019 quarterly report, that while consumer demand had driven a greater diversity in vegetable production, it had not led to any gains in per person vegetable consumption.

Source: Australian Bureau of Statistics

However, this same report has a note of caution for avocados: Recent new plantings of avocados and adoption of high-yielding berry varieties are expected to increase domestic supplies over the medium term, putting downward pressure on prices.

Our avocado industry has worked hard to reposition avocado from a luxury item 25 years ago to a weekly staple for many. In recent years, our domestic market has focussed on expanding the use of avocado beyond the brunch table and into lunch, dinner, snacks and desserts; this is paying off for our industry.

In the latest Harvest to Home data from Nielsen (for the 52 weeks ending 1 December 2018), avocados enjoyed an 8.6% increase in quantity consumed (compared to the previous year). This was particularly evident in Western Australia and Queensland but most of our mainland states had an increase (no data is available for Tasmania).

Source: Nielsen Homescan for the 52 weeks ending 01/12/2018 for the Australian market. Copyright 2019 The Nielsen Company.

So, how do we stack up against other fruit? As you might expect, in dollar terms we hold a healthy portion of the household spend.

Source: Nielsen Homescan for the 52 weeks ending 01/12/2018 for the Australian market. Copyright 2019 The Nielsen Company.

But there’s a note of caution here as well: more than 50% of our retail customers report they buy avocado when there’s a special promotional offer.

Source: Nielsen Homescan for the 52 weeks ending 01/12/2018 for the Australian market. Copyright 2019 The Nielsen Company.

And on the two-year trend, more households are buying our avocado, but they’re spending less.

Source: Nielsen Homescan for the 52 weeks ending 01/12/2018 for the Australian market. Copyright 2019 The Nielsen Company.

So what does all of this mean of our industry? It means that we appear to be on the right track when it comes to supporting the use of grower levies to fund R&D into improving the quality of our product, and for encouraging the uptake of best practices that allow us to deliver a more consistent product. The number of purchasing households would not be on the rise if they did not have confidence in our product.

The data also demonstrates the importance of ensuring marketing levy funds continue to help not only broaden the knowledge of how an avocado can be eaten and its health benefits, but also how to handle it at retail and consumer level. As an industry, we can control quality right up until the point it’s on a shelf, and we need to do everything we can to achieve that. From there, we need to influence the consumer to treat our avocados with as much care as they would a carton of eggs.

As we face increased production, the possibility of imports and consumers who expect value, we need to make sure they get a good avocado at every purchase.

 

This article was produced for the April 2019 Avo Insider.

Improving Australia’s export access

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

 

Avocados Australia is continuing to work with the relevant bodies at a national level to progress the industry’s access to international markets.

In March, we met with the Australian Government Department of Agriculture and Water Resources (DAWR) in Canberra, which also involved Hort Innovation. There have been some delays over the past few months in progressing our market access priorities, and this face-to-face meeting was an opportunity for us to move things along.

At the moment, the industry is working to secure access to Japan for Hass avocados from all Australian regions, based on recently completed research. This research should provide a solid basis for Hass market access negotiations with our priority markets for all regions of Australia using the conditional non-host protocol.

The markets we are actively pursuing are Japan (extending access to all states), Thailand, China, India and New Zealand (conditional non-host). These market access requests have now been progressed through the first hoop (Hort Innovation). We will keep pushing at all levels to get these onto DAWR’s priority list for negotiation.

Recently there has been growing interest in using the existing cold treatment protocol to send Australian avocados to New Zealand in their off-season.

Avocados Australia is looking to secure a conditional non-host protocol for Hass to New Zealand.

Research is also currently underway to develop a short cold treatment for Shepard, as Shepard has previously been shown to be a host of fruit fly, even in the hard condition.  Results are expected later this year.

 

This article was produced for the April 2019 Avo Insider.

Chile update

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

 

Submissions on the Australian Government’s draft report on the biosecurity import requirements for the import of fresh avocados from Chile closes on 29 April 2019. Avocados Australia has met with representatives from the Department of Agriculture and Water Resources (DAWR) about the review and potential imports.

Avocados Australia will be putting in a submission by 29 April. However, we are comfortable with the process and the science behind this draft report. We will, however, be carefully examining the pest list included in the review. We encourage you to also review this list and either provide feedback to Avocados Australia or put in your own submission by the deadline.

The draft report proposes importation of fresh avocado fruit from all commercial production areas of Chile be permitted, subject to a range of biosecurity requirements. It’s important that any imports in no way jeopardise the biosecurity of the Australian avocado industry. You can read more from the last edition of the Avo Insider here.

Access timeframe

The timeframe for access for this Chilean fruit is still a work in progress. This review of the biosecurity requirements closes on 29 April with the pest risk analysis report expected to be finalised toward the end of the calendar year.

Then, it’s in Chile’s hands. How long it takes them to come back with an access proposal to address the identified risks is an unknown and will depend on interest from their industry.

Once a market access proposal is received, DAWR will consider the proposal and both governments will negotiate a final protocol.

We believe it will be virtually impossible for Chile to be sending fruit in their next season (our summer). The earliest we are likely to have Chilean avocado in the market could be September/October 2020.

Those of us in Colombia for this year’s World Avocado Congress in September will be taking the opportunity to talk more with our South American associates about their plans.

Steps for the Australian industry

As well as working to ensure our biosecurity is maintained, the recent Potential Impact of Chilean and Peruvian Avocado Imports for the Australian Avocado Industry (AV17004) report has also provided a useful analysis of potential commercial implications and provided some key recommendations:

  1. increase efficiencies to reduce costs
  2. develop strong alliances and
  3. implement an export strategy.

These recommendations were identified as the adjustments required by the domestic industry in order to remain profitable, productive and globally competitive, in response to increased import volumes.

You can find this report in the R&D section of the BPR Library (in the BPR, search by the project code – AV17004).

You can also find the industry’s new export strategy in the BPR Library, in the Export section (in the BPR search for – Export strategy 2019).

Links to provide feedback on Chile
Peru free trade still to come

Other industries might be frustrated, but the delay is good news for the avocado industry, already facing the prospect of Chile’s entry.

It’s been reported that the beer, wine, sugar and dairy industries are dismayed at Parliament’s delay in ratifying the already-negotiated free trade agreement (FTA) with Peru.

Peru does not have access to Australia for avocados and even when the FTA is signed, they are unlikely to be an immediate priority.

 

This article was produced for the April 2019 Avo Insider.

New Industry Development Manager appointed

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

 

Avocados Australia has appointed a new Industry Development Manager, Liz Singh. Liz’s part-time role is to build capacity and facilitate adoption of orchard best management practice. Liz has extensive experience in industry development roles, and will play a major role in the recently approved industry development and extension project, funded from the Hort Innovation Avocado Fund.

Avocados Australia is a partner in this three-year project and most of Liz’s time will be allocated to delivering this project. As an organisation, Avocados Australia is providing some of the funding for the new Industry Development Manager position, for work outside the scope of the extension project.

Planning is already underway for the three-year project which is a collaborative partnership between Avocados Australia and DAF Queensland with Simon Newett as Project Leader. This new project will deliver regional forums, foundation workshops, advanced management workshops and more with more information about the project to be provided over the coming weeks.

We have started planning a round of regional meetings with the first planned for Central NSW in May, the next is planned for Western Australia in June. All event details will be available on the website soon.

You can read more about the new extension project by clicking here.

 

This article was produced for the April 2019 Avo Insider.

Chile: import report released

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

 

As we noted in the March 2018 Avo Insider, the Chileans are coming. The Department of Agriculture and Water Resources (DAWR) has opened the consultation period for its draft report for the review of the biosecurity import requirements for fresh avocado from Chile.

Avocados Australia will be putting in a submission before the 29 April deadline and our Board and DAWR representatives will be meeting in coming weeks to discuss this report and potential implications. Please call your region’s director (contacts here) if you would like to raise any issues before this meeting takes place.

The draft report proposes importation of fresh avocado fruit from all commercial production areas of Chile be permitted, subject to a range of biosecurity requirements.
It’s important that any imports in no way jeopardise the biosecurity of the Australian avocado industry.

What’s in the report?

The draft report identifies seven quarantine pests associated with fresh avocado fruit from Chile that require risk management measures to reduce the biosecurity risk to an acceptable level:

  • Fruit flies: Mediterranean fruit fly (Ceratitis capitata)
  • Mealybugs: grape mealybug (Pseudococcus maritimus)
  • Thrips: Chilean flower thrips (Frankliniella australis), tamarugo thrips (Frankliniella gemina) and western flower thrips (Frankliniella occidentalis)
  • Mites: avocado brown mite (Oligonychus punicae) and avocado red mite (Oligonychus yothersi).

The draft report proposes risk management measures, in combination with operational systems, to reduce the risks posed to achieve the appropriate level of protection for Australia:

  • area freedom, fruit treatment (such as cold disinfestation treatment) or hard condition of fruit (for the Hass cultivar only) for Mediterranean fruit fly
  • consignment freedom verified by pre-export visual inspection and, if detected, remedial action for grape mealybug, Oligonychus spider mites and thrips.

We encourage anyone who would like to contribute to our Avocados Australia submission to contact the office (details below) or provide their own submission to the DAWR (links at the end of this article).

Research on the potential impact

Issues for the industry
There are two main issues for the Australian avocado industry.
1. Quarantine risks
Future imports from Chile to Australia could introduce new pests or diseases that we don’t have. This is a government-to-government process. Avocados Australia needs to be sure the process is thorough and that we are confident the recommendations are sound.

We will be reviewing the full report thoroughly in the coming weeks and will be raising any questions or concerns with DAWR when we meet.

2. Competition risk
We need to address the potential commercial impact Chilean imports could have on the Australian industry.

Avocados Australia and Hort Innovation initiated a project to understand the potential impact of avocado imports from Chile and/or Peru on the domestic industry. This report, Potential Impact of Chilean and Peruvian Avocado Imports for the Australian Avocado Industry (AV17004) can be found in the BPR Library, in the R&D Reports section.

This report indicated that imports from Chile were likely to proceed and provided three key steps for industry to mitigate the impact:

  • increase efficiencies to reduce costs,
  •  develop strong alliances and
  •  implement an export strategy.

The industry has moved on all of these recommendations.

Avocados Australia has been proactive on behalf of industry with regard to helping direct levy-funded research toward quality improvements, efficiencies from the farm to the retail level, and increasing the Australian industry’s own export activities.

Clearly, Australia is an attractive market not just for Chile but potentially also Peru and Mexico. We have high per capita consumption and consumers willing to pay high prices.

As a comparison, in December 2018, a conventional Hass is worth between US$1 and US$1.22 on average at retail level in the US. At Tesco in the UK, a medium avocado is currently 85p and a large avocado £1 (AU$1.87). And in Australia? A single Hass (size not specified) is $2.50 this week.

Another benefit for Chile will be their ability to supply during the summer months, when we already rely on New Zealand to bolster domestic supplies. In fact, one possible goal for Chile could be to replace New Zealand supply in our summer season.

Against these benefits of the Australian market are, however, some negatives:

  • we are a small market, in world terms, compared with the main current export markets for Chile
  • as noted in the AV17004 impact report, airfreight from Chile to Australia is not a viable option. Seafreight is a viable transport option to Australia but is likely to require dedicated reefers to overcome the current limited options.

As the report says: “Under different scenarios, total time for Chilean avocados from pick to clearance into Australia could vary from 18 to 37 days. Current existing routes have crossing times ranging from 17 to 35+ days, equating to 22 to 37 days in total time. However, while it may sound surprising to Australian growers, Chile makes times under 30 days succeed within other markets. This is due, in part, to the Chilean dry climate and an industry highly targeted at serving export across all stages of the value chain.
“If and when Chile were to move to dedicated reefers, there would be a significant decrease in transit times, to a highly viable 18–20 days from pick to clearance into Australia. Among other benefits, this would dramatically improve average fruit quality from Chile.
“Past actions in other markets suggests Chile can utilise seasonal reefers for quantities around 4,000 tonnes. Were Chile to dispatch six direct reefers over a six month season, this would be the equivalent to the current Australian import volumes from New Zealand.”

For industry, there is likely to be little impact in the short term, and the medium term impact will depend on a whole range of factors. Will they come? Time will tell, but it is certainly something we need to monitor, and prepare for.

Links
Contact Avocados Australia

John Tyas

Email: j.tyas@avocado.org.au
Telephone: 07 3846 6566

 

This article was produced for the March 2019 Avo Insider.

The year ahead for Avocados Australia

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

2018 was a big year for the Australian avocado industry. We gained access to the Japanese market, and production increased to record levels at the end of the year. In 2019, the focus for Avocados Australia will be the industry’s new industry development and extension project. This project has been a long time coming but we’re hopeful we’ll have good news to share soon. As part of this project, the Queensland Department of Agriculture and Fisheries, and Avocados Australia will arrange a pre or post-conference tour around the World Avocado Conference in Columbia later this year. The tour that we are organising is likely to be to California but until the WAC organisers confirm their pre and post conference schedules, we cannot finalise the schedule.
Email admin2@avocado.org.au to register your interest.

Marketing

We have also submitted a concept into the Hort Innovation funnel for an industry-based support position with regard to marketing.
Successful development of the domestic avocado market over the next five years will require:

  • highly effective marketing and promotion programs
  • accurate information about supply volumes and timing (by variety) shared across the value chain
  • a reliable supply of good quality avocados at point of sale
  • a high level of coordination and engagement between stakeholders (growers, packers, traders, retailers, Hort Innovation Marketing Manager and delivery partners, Avocados Australia).

Avocados Australia believes an industry-based support officer would help coordinate industry engagement and support the Hort Innovation Marketing Manager in these endeavours.
We would also hope for increased engagement with industry around planning, and the increased communication of marketing outcomes.
The goal is to accelerate an increased demand for avocados in Australia.

FoodEx Japan

Next week, I will be in Japan, representing the Australian avocado industry at FoodEx 2019. This is a major food and beverage expo and an important debut for us, after fresh Australian avocados were granted market access in November last year.
Several Western Australian exporters have been successfully sending to Japan this season, and we hope others can take up the opportunities in future. At the moment, only Western Australia, the Riverland (in the Tristate) and Tasmania have gained access but we are actively pursuing access for all Australian growing regions.

Industry SIAPs

As we’ve noted in previous Avo Insider editions, there are now two industry Strategic Investment Advisory Panels (SIAP) – one for research & development, and one for marketing.
Your industry organisation will continue to participate in both SIAPs. With these changes, I am now able to participate fully on both panels which I am very much looking forward to.

R&D SIAP

  • John Tyas
  • Jim Kochi
  • Dudley Mitchell

Marketing SIAP

  • John Tyas
  • Daryl Boardman
  • John Walsh

It is a Hort Innovation requirement that no more than three Avocados Australia office holders can be appointed to each SIAP.

OrchardInfo – data updated

An error with the 2018 OrchardInfo report was recently identified and an updated report has been distributed to contributors. If you received the previous version of this report (in October 2018), please disregard it and refer instead to the February 2019 update.
If you contributed to OrchardInfo 2018 but have not received the updated report, please contact us (07 3846 6566 or infocado@avocado.org.au) and we will send you the updated version.
The error in the original report was with the reporting of tree age; there is no material difference in total plantings reported.
We have corrected the error and amended the procedures to prevent this from happening again.
We apologise for any inconvenience this error may have caused.

 

This article was produced for the March 2019 Avo Insider.

Export strategy released

The Avo Insider and its contents are a member-only service of Avocados Australia. You will not see these articles in the media or our other publications.

 

Avocados Australia, as part of the Avocado export readiness and market access project (AV17000), has recently published the Australian avocado export strategy 2019-2021.

This strategy is vital for the industry’s future, both as we face the prospect of additional importing countries and as our own domestic production grows. While exports currently make up a small percentage of the industry, our domestic production has grown an average of 7% year-on-year for the past decade.

Australian Avocado exports are minor in volume relative to the quantity produced for the domestic market with 1,791 tonnes or A$11.64 million exported in 2017/18. This represents approximately 2.3% of total production volume. However, recent figures show that for the calendar year of 2018, Australia exported 2,500 tonnes.

The market access and maintenance items in the strategy aim to open new markets and maintain/improve access among existing key markets, that have premium value segments that will bring a substantial increase in trade for the Australian avocado industry. This includes pursuing a workable protocol for Shepard, developing business cases to progress market access for priority markets, support the progress of market access protocols, and implementing market specific strategies.

The strategy also details items for trade development, to defend and grow existing selected key markets by effective education, marketing and promotion focussing on Singapore, Malaysia and Hong Kong.

In addition, the strategy includes sections on branding and position to build the image of Australia as an excellent source of high quality, nutritious and versatile avocados, and also the building of industry capability to develop the Australian avocado industry to take a leadership role in exports and cultivate a more export-oriented culture among its members.

The full strategy is available in the BPR Library in the Export section.

 

This article was produced for the March 2019 edition of the Avo Insider