The great avocado affair of 2022 began with a little-noticed weekend press release from Mexico’s Agriculture and Rural Development Ministry. The U.S. was shutting down imports of avocados from Mexico’s biggest producing region because one of its inspectors received a threatening phone call.
Details are hard to come by—who made the threat? what was the threat?—but what’s known is this: Mexican President Andres Manuel Lopez Obrador has not taken kindly to the U.S. action. In a Monday morning press conference, he said Mexican authorities would look into the allegations, but also made clear he suspects there’s something nefarious afoot. There are political and economic interests, Lopez Obrador said, who want to keep the Mexican avocado out of the U.S. market.
One group that desperately wants the avocados to keep flowing north: U.S. consumers, who now eat more guacamole than ever. It’s only a matter of time before the import halt will squeeze supplies, as Mexico accounts for 80% of the U.S. market, and drive up the price on yet another product in an economy grappling with its worst inflation surge in four decades.
“We could see a significant reduction in availability” of avocados in the U.S. and higher prices as a result, said David Magana, senior analyst for Rabobank International in Fresno, California.
Meanwhile, the U.S. Department of Agriculture took three days to confirm its actions. The ban went into effect Feb. 11, the agency said in an emailed statement Monday. The department is working with the U.S. Department of Homeland Security to allow avocados that were inspected and certified for export on or before Feb. 11 to continue to be imported.
Avocados are already the most expensive for this time of year in government data going back two decades due to the labor shortfalls, higher production costs and wage hikes that have plagued the broader economy. It’s one of the many products that’s helping to push global food prices closer to a record high.
At the same time, demand for the fruit is booming. Per-capita consumption doubled in the 10 years through 2020 to 9 pounds, and could surpass 11 pounds by 2026, Magana said, citing industry projections.
Mission Produce, the biggest distributor of avocados in the U.S., said in a statement that the company is doing what it can to “mitigate the impact as much as possible,” including trying to source for additional product around the world. However, there may be limits. There isn’t enough global supply to make up for an inability to ship Mexican avocados into the U.S., especially on a nearer-term time horizon, JPMorgan Chase& Co. analysts Thomas Palmer and Ken Goldman said in a report.
Francesco Brachetti, co-founder of Avocaderia, an avocado bar in New York City, said it’ll be a couple of weeks before consumers see impacts because there’s a lag between when fruit ships and when it’s sold in the U.S. Disruptions to the avocado supply chain usually don’t last longer than a few days or at most a week or two, but this time could be different, he said.
“The last couple of years have been unique, so we’ll take it with caution and wait for this situation to evolve,” Brachetti said.
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