Saint guacamole: Price spikes seen after US bans Mexican avocados

Experts say you might pay more for your avocado toast or guacamole in the short term, and the effects of the US temporary ban on fruit imports are already being felt on avocado pickers in Mexico. .

Mexico is negotiating security guarantees for US inspectors who certify Mexican avocados for export. Inspections were halted last week after one of the US inspectors was threatened in the western state of Michaoacan, where producers are routinely extorted by drug cartels.

The US Department of Agriculture released more details on Thursday about what the threat entailed. He said in a statement that an inspector had received a threat “against him and his family”.

The inspector had “questioned the integrity of a certain shipment and refused to certify it based on concrete issues,” according to the USDA statement. Inspectors are in Mexico to certify that Mexican avocados do not carry pests that could harm California avocado orchards.

But only one state in Mexico, Michoacan, is certified pest-free and able to export avocados to the US market. Numerous reports indicate that some Mexican packers are buying avocados from other states that are not certified and trying to pass them off as Michoacan.

But it is honest growers and their employees who suffer the consequences.

“You’re Starving”

Avocado pickers stood by the roadside this week outside the town of Uruapan, Michoacan, asking for donations after losing their jobs. Holding signs saying “Voluntary donations” and “We live by picking avocados”, they waited for motorists to drop spare change into the buckets they were holding.

“Since last Wednesday, we haven’t picked up anything,” said one of the workers, who declined to be named due to widespread violence in the state. “In the meantime, you’re starving.”

While avocados that have already been inspected can still be shipped north, there were signs Thursday that supplies will tighten and companies importing avocados may have to look beyond Mexico, which currently supplies around 80 % of US fruit imports.

“I think it will increase prices in the United States, not now because there is still avocado in transit, but I anticipate that in a week or 10 days we will have a price spike,” said said Miguel Gómez, professor of applied economics. and management at Cornell SC Johnson College of Business.

Avocados bring a huge boom to the Michoacan economy
A worker places avocados into crates during a harvest on a farm in Michoacan state, Mexico, in 2021.

Bloomberg


Jack Hartung, chief financial officer of the Chipotle restaurant chain, said in a statement that “we are working closely with our suppliers to meet this challenge. Our supply partners currently have several weeks of inventory available, so we will continue to closely monitor the situation and adjust our plans accordingly.”

Protect American inspectors

Gómez expects any shortage to be short-lived.

“I think the market disruption will be very short now because [avocado from] Peru will arrive in late March, early April, and I’m sure they’ll do whatever it takes to start shipping avocados earlier and maybe mid-March,” Gómez said.

Peru, Colombia and Chile already ship avocados to the United States, but in quantities that represent only a tiny fraction of Mexican production. This may change.

“I was talking with a few avocado buyers domestically and looking ahead. They know they need to diversify their suppliers,” Gómez said. “The problem is that they realized that it would be very risky to depend on one source.”

The avocado growers association and Michoacan state officials held meetings this week with U.S. officials to develop safety safeguards for U.S. inspectors.

“We are working to restore avocado exports as soon as possible,” Michoacan Governor Alfredo Ramírez Bedolla wrote.

But, in the meantime, avocado growers in Michoacan face challenges: avocados can be left on the trees for a while, but already-harvested fruit must be shipped quickly.

“We have uncertainty; if he [the export production] will go to the domestic market, entirely to Mexico, the prices will go down,” said avocado buyer and distributor José Manuel Garcia Tovar. “So we are in a situation where growers may or may not want to harvest.

More expensive avocado toast?

It’s also unclear how US consumers will react if they start to see prices rise. While there is concern over deforestation and violence that resulted from the avocado boom in Michoacan, the fruit has become a staple in the United States, where per capita consumption of avocados has tripled since 2001 to reach 8 pounds per person in 2018.

“The moment you slap someone’s avocado toast at brunch, it’s like touching the very hearts of many American families who rely on that Sunday brunch, isn’t it? So all of Suddenly we get questions about… where are the priorities here?” said Desirée LeClercq, professor of labor law at Cornell’s School of Industrial and Labor Relations.

This raises the question of whether Americans would be willing to pay more for lawyers not associated with violence, drug cartels or deforestation.

“It makes Americans really think about whether they want to pay more for a quality product or do they want to look the other way and be able to slice their toast accordingly?” said LeClercq. “And I think consumers are becoming more knowledgeable about how these products are made. But whether or not that translates into consumer behavior, I think remains to be seen.”

Edward N. Arrington