Avocado prices rose to a record on surging demand and a smaller crop in Mexico and California. Photo / 123RF
Avocado prices rose to a record on surging demand and a smaller crop in Mexico and California. Photo / 123RF
That bowl of guacamole on Cinco de Mayo will be more expensive this year, as avocado prices rise to a record on surging demand and a smaller crop in Mexico and the US.
A 10-kilogram (22-pound) box of Hass avocados from the state of Michoacan, Mexico's biggest producer, cost 530pesos (US$27.89), according to the US government. The price, which is subject to seasonal swings, is more than double what it was a year earlier and the highest in data going back 19 years.
The jump in demand in recent years has been dramatic. American per-capita consumption was 6.9 pounds in 2015, versus 3.5 pounds in 2006, according to the US government. People are being drawn to the fruit not just for its taste but also for its healthy oils and fats, a trend borne by Starbucks' announcement last month it's selling avocado sandwich spread.
"You have increased consumption in China and other areas of the world, like Europe," said Roland Fumasi, an analyst at Rabobank in Fresno, California. "They're pulling a lot more of the Mexican crop, so there's less available for the US"
Mexico supplies 82 per cent of the avocados eaten north of the border. Its shipments into the US surged to 1.76 billion pounds in 2015 from just 24 million pounds in 2000, according to data from the Hass Avocado Board in Mission Viejo, California.
Avocado trees are alternate-bearing crops, with large harvests one year and smaller ones the next.
A lighter crop is expected this season, Fumasi said. In California, which accounts for the rest of supply in the US, production will be down about 44 per cent this year, the state's avocado commission forecasts.
US restaurant chain Chipotle Mexican Grill Inc. said earlier this week the shortage of avocados is putting pressure on costs. Hass avocados retailed in the US for US$1.27 each on April 21, up from 98 cents a year earlier, US Department of Agriculture data show.
You have increased consumption in China and other areas of the world, like Europe.
None of this is good news for those celebrating Cinco de Mayo next week. The date of the Mexican Army's victory over French forces at the Battle of Puebla in 1862 has become a broader celebration of Mexican-American culture.
It's also turned into one of the top occasions to consume guacamole in the US, besides the Super Bowl.
Avocado prices will "remain at relatively elevated levels. It could be all the way through summer," Fumasi said. Buyers will have to wait until the US fall, and hope next season's Mexican crop is bigger, before there's enough volume to push prices considerably lower, he said.
