Mexican avos

Leading avocado supplier Calavo Growers has reported a dip in third quarter earnings due to a fall in supplies of Mexican-grown avocados, which resulted in higher prices and adversely impacted margins in both its fresh and processed divisions.

The Santa Paula, California-based company’s net income fell to US$1.4m or US$0.10 per share, compared with US$2.2m, or US$0.15 per share a year earlier. Quarterly revenues rose to US$96.9m from US$91.3m in the third quarter of 2007.

However, there were signs that the Mexican supply situation has now eased. Lee Cole, chairman, president and CEO said: “We are encountering a more favourable pricing environment and increasingly ample fruit supply across the border.”

Calavo’s fresh avocado sales were up 6.7 per cent in the quarter to US$84.8m compared with US$79.5m in the year-earlier period.

“Improved California harvest has helped mitigate the impact of the higher fruit costs for fresh avocados sourced from Mexico,” Mr Cole added.

Net income in the year to date stood at US$3.73m, down from the US$6.14m achieved a year ago. Looking ahead, the company said it does not expect to realise all the benefits of the downward trend in Mexican fruit prices during the fourth quarter. However, it expects to make significant gross margin gains in fiscal 2009.