The Decline of Avocado Production in San Diego County: Will High-density Planting Be the Remedy?

Although high-density planting is receiving much attention by many countries as a method to increase yield and income to combat high water and production costs in avocado production, there is scant information available on the economic feasibility of the method. This means it is not clear, nor is information available to prove, whether high-density planting is profitable and whether the investment would be feasible to be adopted. What is clear is that costs of production—in particular, water prices in San Diego County, CA, USA—have been increasing, and avocado enterprises in the county are experiencing decreasing profits and declining acreage. From 2012 to 2018 a high-density field trial in San Diego County was conducted that showed more yield and water-use efficiency per acre than standard planting, upon which the development of an enterprise budget revealed profitability. We used the enterprise budget as the foundation for our study and investigated the influence of potential water-cost increases on net cash flow and profit of the orchard. We also calculated the internal rate of return to establish the soundness of the investment for adoption. The potential impact of variable yield on cash flow and investment was investigated to ensure the study had a more general and flexible applicability.