U.S.-Mexico avo-wars drive consumer prices up

Americans have started feeling a supply chain pinch after the Biden administration suspended avocado imports from Mexico earlier this week, in a move Mexican President Andres Manuel Lopez Obrador has called a conspiracy to protect American producers.

Mexico accounts for about 80% of the U.S.’s avocado supply and industry experts have warned that the market currently has 57 million pounds of the fruit, a figure which translates to just a week’s worth of inventory for American consumers.

“That’ll dry up quickly,” said Stonehill Produce Chief Executive Officer Keith Slattery, adding that there isn’t enough product from global exporters to make up for the loss of Mexican avocados.

The supply chain disruption has caused prices to rise across the United States, and the price of avocados in Chicago rose by 15% on Tuesday, according to U.S. Department of Agriculture data, The Mercury News reported.

In an attempt to mitigate impending shortages, grocery-store operator and distributor SpartanNash Co. is attempting to secure a supply from California, but has warned that avocados from the Golden State are up to 30% more expensive than their Mexican counterparts and that the extra cost will inevitably be passed along to consumers.

If the ban “lasts for even a couple weeks or so, it will have a very significant impact on supply and pricing of avocados,” SpartanNash’s Chief Executive Officer Tony Sarsam said in an interview. “We can get more from California but it will not make up for, or anywhere close to, the loss.”

The halt on avocado imports from Michoacán, a coastal state just west of Mexico City that has been plagued with violence in recent years, went into effect Feb. 11 after an inspector said he received a threatening phone call. Mexican President Andres Manuel Lopez Obrador responded by suggesting there were political and economic interests at play in the U.S. decision.

In the meantime, U.S. shoppers and diners should expect to pay more for avocados, which are already the most expensive for the time of year in available government data. Inflation is running rampant across grocery stores, with consumers paying more for everything from meat to romaine lettuce. Chipotle Mexican Grill Inc. said Monday that its suppliers only have “several weeks” of inventory 

“Everyday matters,” said Barry Friends, partner at food-industry consultant Pentallect Inc. “You put a pinch on the avocado supply, and the price is going to spike for sure.”

But there’s a chance that trade between Mexico and the United States will soon return to normal, saving consumers from missing out on avocado toast at brunch this Sunday.

The government of the Mexican state of Michoacán and the U.S. Embassy in Mexico announced on Tuesday that steps were being taken to allow Mexican avocado exports to once again enter U.S. markets.

Nos reunimos con representantes de la @USEmbassyMEX para la implementación de un protocolo de seguridad a favor de la industria aguacatera. pic.twitter.com/81y0Eny8Im

— Gobierno Michoacán (@GobMichoacan) February 15, 2022

Measures were announced by Michoacan Governor Alfredo Ramirez Bedolla and Minister Counselor for Diplomatic Security Timothy Dumas of the American Embassy, including steps which would help protect producers, packers and exporters in Michoacan.