Avocado prices spike to 24-year high as Mexico import ban hurts supply

Avocado prices have surged to their highest level in more than two decades – a trend that worsened after the US temporarily banned imports from key supplier Mexico after a threat against safety inspectors.

A 20-pound box of avocados from the Michoacán, the only state in Mexico approved to export the fruit to the US, cost 760 pesos – the equivalent of about $38 – as of March 29.

The price was the highest on record dating back to 1998, according to government tracking data reviewed by Bloomberg.

Supply chain disruptions and other inflationary pressures related to the COVID-19 pandemic caused a record spike in prices ahead of the Super Bowl – the strongest day of demand for avocados as Americans gobble up guacamole at parties.

But the problem got worse last month, when the US Department of Agriculture suspended imports from Michoacán after an American plant safety inspector received a threatening phone call. While the source of the threat was not identified, Michoacán has contended with violence involving drug cartels in recent years.

The Department of Agriculture lifted the ban roughly a week after it was enacted – explaining that it had developed additional safety measures for inspectors with Mexican authorities.

“The safety of USDA employees simply doing their jobs is of paramount importance,” the Department of Agriculture said. “USDA is appreciative of the positive, collaborative relationship between the United States and Mexico that made resolution of this issue possible in a timely manner.”

Still, the avocado industry is still recovering from the shutdown. Avocado shipments from Mexico are expected to decline by 8% for the 2021-22 crop year, Bloomberg reported, citing federal data. Output had reached a record high the previous year.

The temporary pause on shipments sparked fears of a nationwide shortage, since avocados grown in Mexico account for approximately 80% of the US supply. At one point, Chipotle warned that it only had weeks of remaining supply, while smaller chains and independent restaurants quickly ran out of stock.

Mission Produce, the top US avocado distributor, recently disclosed that it raised prices by 50%

“Partially offsetting price gains was an 18% decrease in avocado volume sold, which was primarily driven by lower supply, but exacerbated by price sensitivity in select international markets that competed for lower cost sources of fruit,” Mission Produce CEO Steve Barnard said in the company’s first-quarter earnings report.