Don’t mess with Americans and our avocados – or better yet, don’t mess with Texans and their guacamole. We eat so many avocados that our per-capita avocado consumption jumped from 3.5 pounds in 2006 to 6.9 pounds in 2015.
Avocados are so popular because they are not just tasty, but also contains many health benefits. Avocados are high in healthy fats and contain 20 different vitamins and minerals. They have even more potassium than bananas! Numerous studies have shown that eating avocados can even improve heart disease risk factors like Total, LDL and HDL cholesterol, as well as blood triglycerides.
Avocados have become bacon’s equivalent here in America. You’ll find it on burgers, toast, salads, sushi, tacos (of course), and pretty much anything else. People even make fried avocado fries! You can’t get any more American than that.
America imports 82% of its avocados from Mexico, and 93% of Hass avocados sold in the U.S. are also from Mexico. Mexico’s climate allows them to grow year-round – which is something we can’t do here. According to the Hass Avocado Board in California, in 2000, Mexico was shipping 24 million pounds to the Unites States. By 2015, they were shipping 1.76 billion pounds of avocados! Even though they can produce large quantities, the demand is growing and so are the prices.
This year, we had a record-breaking surge in avocado prices. In April 2016, the average price for one avocado was 98 cents each. One year later, the average price is $1.26! The prices are expected to stay high through the summer.
A 22-pound box of Hass avocados from Michoacan, Mexico’s largest avocado producing state, costs 530 pesos ($27.89). While it is subject to seasonal swings, this price is more than double what it was last year and the highest in data in the past 19 years. If Michoacan decided, for whatever reason, to stop exporting, there is nowhere else in the world that could provide the quantity of avocados that U.S. markets are consuming!
As you would expect, restaurants are affected by this surge in prices. Subway stopped offering fresh avocados on their sandwiches. Chipotle, on the other hand, is known for their delicious guacamole. People complain about paying the extra $2, but that doesn’t stop them from adding it to their meals. Luckily, Chipotle has promise that they will keep the guacamole flowing and won’t inflate the price for the customers.
Not only are prices up, but there is also a shortage of avocados this year. Avocado trees are alternate-bearing crops. They might have large harvests one year and smaller harvests the next. In California, production is down 44% because of the heatwave. Production is also down in Peru because of severe flooding. According to the U.S. Department of Agriculture, we might start allowing Colombia to import avocados to prevent future shortages.
Roland Fumasi, an analyst at Rabobank in Fresno, California, said that avocado consumption is increasing in China and in other parts of Europe. This increased demand pulls even more of the avocado crop from Mexico – which means there is even less available for consumers in the United States. China’s imports from Mexico have grown by about 250% each year!
Why are the prices so high?
After Donald Trump announced building a border wall, he claimed Mexico will pay for it. However, Mexico said they will not pay for it. Following that, Chief of staff Reince Priebus said that a 20% import tax was one idea in "a buffet of options" to pay for the border wall. White House Press Secretary Sean Spicer said, “the 20 percent tax on annual Mexican imports would raise $10 billion a year and would easily pay for a border wall that is estimated to cost between $8 billion and $20 billion.” Unfortunately, as evidenced by spiking avocado prices, the cost of goods in America increase alongside the high import taxes.
This tax will affect more than just avocado prices. Mexico is the biggest exporter of fresh produce to the U.S. with about 70% of our vegetable imports and almost 40% of fruit imports. It doesn’t end there. We also import other products Americans love from Mexico, like beer and tequila! Higher import prices will result in more expensive goods for both consumers and businesses. You can expect to see this play out across San Antonio since Texans are incredibly unlikely to cut back on the guacamole and tequila!
For now, buyers are being urged to wait until the fall to purchase avocados. Hopefully, next season’s crop will be larger and there will be enough volume to push prices down.