Avocado prices skyrocketing
High demand, tough growing conditions lead to shortage
This Cinco de Mayo, more party hosts may say, “Hold the guacamole!”
Depending on the variety, avocado prices can be up as much as 55% this year, just in time for Friday’s celebration of the Mexican holiday. The average price of an avocado was $1.43 in the U.S. Department of Agriculture’s weekly retail price report, compared to 92 cents last year. The popular Hass variety, however, is still a relative bargain at $1.38, down from $1.40 a year ago.
What’s behind the price spike? It’s a perfect storm of trends, from a growing national appetite for the bumpyskinned fruit to difficult growing conditions, among other things.
Higher prices are going to put a damper on all those Cinco de Mayo parties. The California Avocado Commission predicts 105
million pounds of avocados will be devoured for the holiday, down from 135 million last year.
“When the fruit is priced higher, it’s priced higher at retail and food service,” commission spokeswoman Jan DeLyser said. “People are still buying and consuming avocados, but instead of buying multiples, four to six, they’re buying two to three because of the price.”
California produces 15% to 20% of the avocados consumed in the U.S. The rest mostly come from Mexico. But this year, supplies are extra tight.
Mexico, which produces most of the avocados Americans eat, is dealing with a crop that’s 20% smaller. It is expected to ship 1.6 billion pounds, down from 1.9 billion last year, said Ramon Paz, spokesman for the Mexican Avocado Producers. California growers expect to deliver only half as many avocados as in 2016.
“Demand has been growing in the U.S. ... and now we come with a temporarily lower supply. That creates tension in prices,” Paz said. Even countries such as South Africa, Peru and New Zealand, which also produce avocados, are seeing smaller crops.
Wholesale avocado prices are more than double what they were last year, due to limited production both in Mexico and in the U.S. The wholesale price of a 25pound box of Mexican avocados is $54 now vs. $22 in 2016.
“We’ve suffered the last several years under drought,” said Rick Shade of Shade Farm Management, which oversees about 600 acres in California’s Santa Barbara and Ventura counties. “Our production per acre is down, so we may not necessarily be making more money.”
So far, fast-food chains that depend on avocados have held the line on prices. Subway and Chipotle say they have no new surcharges, although charging extra for avocado is a common practice in the restaurant industry.
“Almost every restaurant you go to, there’s an upcharge for avocado,” said Greg Johnson, editor of The Packer, a trade publication. “They were already upcharging before and making a profit, so maybe it digs into that a little, but they’re still making a profit.”