Limoneira Company (LMNR) is betting big on avocados this year. The company has significantly raised its expectations for avocado production, aiming to capitalize on robust consumer demand and high prices for the fruit.
During a recent earnings call, CEO Harold Edwards announced that Limoneira now expects avocado volumes to reach between 14.5 million and 15.5 million pounds for fiscal year 2024, a substantial increase from its previous guidance of 9 million to 10 million pounds. This represents a more than 50% jump in anticipated production.
The company anticipates a record avocado harvest in the fourth quarter, with an estimated 4 million to 5 million pounds remaining. This strategy is driven by Limoneira’s ability to hold the fruit and match its release with peak pricing periods.
The company’s financial performance reflects the rising demand for avocados. In the third quarter of fiscal year 2024, Limoneira generated $13.9 million in avocado revenue, a significant increase from the $3.5 million recorded in the same period last year. This growth was driven by the sale of 8.86 million pounds of avocados at an average price of $1.57 per pound, compared to 2.82 million pounds sold at $0.99 per pound in the prior year.
Limoneira’s overall net revenue for the third quarter reached $63.3 million, up from $52.5 million a year earlier, demonstrating the positive impact of increased avocado production on its financial performance.
Despite the current surge in avocado production, Limoneira anticipates a dip in volume next year due to the naturally occurring alternate bearing cycle of avocado trees. This cycle results in lower production in certain years. However, the company is committed to expanding avocado production in the long term, with plans to add 1,000 acres over the next three years.
While Limoneira expects lower volume in 2025, it also forecasts a slight decline in avocado pricing. The company attributes this potential price reduction to international market dynamics. Despite these factors, Limoneira remains optimistic about the long-term prospects for the avocado market, driven by continued strong consumer demand and its strategic expansion plans.
