Getting out of avocados -- and into kumquats?
Escondido, Calif. — Angie Dickinson is still plugging them. Fast-food taco shops are still using them. The media in 13 American cities will soon be flooded with ads for them.
But here in southern California, the great avocado investment boom is over.
That's the view of growers, packers, and investment real estate brokers in San Diego County, which leads the nation in the production of these large-pitted fruits.
''We are in a leveling-off cycle, if not actually a decline in acres planted, '' say Alan Myers of the grower-funded California Avocado Commission (CAC). The reasons: recent overplanting, low prices, and what could become a serious problem of water supply.
In the past 20 years, avocados have moved from an upmarket delicacy to a fashionable gourmet fruit. Because they keep fairly well in cold storage -- and, like bananas, ripen only off the tree -- they became widely available in stores far beyond the orchards of California and Florida. Besides, they made money -- lots of it.
In the 1970s, says Anne Fagan of the Avocado Grower Magazine, California avocados seemed an ideal tax shelter for investors in the 40-mile-wide coastal strip from Santa Barbara to the Mexican border where they grow. ''They hardly take any labor,'' she says, noting that an average tree comes into production in three to five years and ''essentially has an unlimited life.''
Added to that is what she calls the ''glamour.'' In San Diego County, where a rapid influx of people has sent home prices skyrocketing, the typical avocado grove is five acres or less -- and has a house in the center. The steep, rocky hillsides of the desert mountains here are ideal for the trees. They are also ''the same kind of ground people like to live on,'' says Mr. Myers. As the cities expand, he says, ''you can plant [a grove] anticipating urban sprawl'' and an increase in land values.
In the meantime, you can depreciate the cost of the entire farming operation as you sell off the crop. During the 1970s, says Claude Sweet of Agricado, a farm management firm here, climatic conditions were poor. Yields, he recalls, were low and prices high -- up to a dollar a pound wholesale in the summer of 1980. That year the entire state produced only 150 million pounds. But those who had fruit did very well, and the planting of new groves continued.
Then, in 1981, everything clicked for the state's 75,000 acres of groves. ''All of a sudden,'' says Mr. Sweet, ''we went from a small crop to the largest crop on record.'' Some 475 million pounds flooded onto the market -- into a distribution system that simply couldn't handle them all. Prices fell to about 12 cents a pound - for a fruit which, says Ms. Fagan, costs about 28 cents to produce, exluding the cost of the land.
Now, says Agricado president Warren Currier III, another cost is beginning to bite deeply: water. Each year, an average grove needs three to four acre-feet of water (the amount needed to flood an acre one foot deep). Water now costs up to water from the Hoover Dam expires, says Mr. Currier, that cost could rise to $ 500 per acre-foot. He is lobbying hard for the building of the so-called peripheral canal, a controversial measure which, if passed by statewide referendum in June, would send northern California's water to the south.
In any case, some 20,000 acres of newly planted avocados have still to come into production. State forecasts estimate crops of 600 million pounds by the mid-1980s - a sixfold increase in the past 20 years. To Mr. Currier, that means that ''we've got to expand our markets to solve our problems.''
Marketing is the job of the CAC. Funded by a 4.7 percent levy on growers' receipts, it will begin an advertising campaign (starring actress Angie Dickinson) in April.
CAC officials estimate that two-thirds of the American public knows about the avocado, and that in any given month about 20 percent of the households buys one. But in some of the targeted cities -- Cleveland, for example -- the number hovers around 5 percent. CAC officials hope to double that.
So far, say Mr. Sweet, there is no pressure for a federal quota system to hold down the supply. He sees growers as ''a very, very capitalistic bunch'' who would rather have the market take care of any oversupply by forcing marginal groves out of production.
And when such groves prove unprofitable? Mr. Sweet, as past president of the California Rare Fruit Growers Association, is happy to talk about potentially profitable crops that few people in Cleveland (or anywhere else) have ever heard of: kiwifruits, feijoas, cherimoyas, jujubes, loquats, and a score of others.
Avocado investments may have reached their peak. But the great kumquat boom could be just around the corner.