Avocado prices could spike as the U.S. suspends imports from Mexico

As Americans assembled their ingredients for Super Bowl guacamole over the weekend, troubling news emerged from the U.S. Department of Agriculture: Avocado imports from Michoacán, Mexico, had been suspended.

The import suspension comes as avocado prices hit record highs, 100% more expensive than they were a year ago, according to David Magaña, a senior analyst for RaboResearch Food & Agribusiness.

"In a few days, the current inventory will be sold out and there will be a lack of product in almost any supermarket," said Raul Lopez, Mexico manager of Agtools, which conducts market research of agricultural commodities. "The consumer will have very few products available, and prices will rise drastically."

The USDA's Animal and Plant Health Inspection Service (APHIS) is working with Customs and Border Protection to allow avocados that were inspected and certified for export on or before Feb. 11 to continue to be imported.

After that, there will be no more avocados until further notice.

Brokers are scrambling, retailers will have shortfalls, and consumers will feel further pain at the checkout line, according to Michael Swanson, Wells Fargo's chief agricultural economist. Eight out of ten avocados purchased in the U.S. are from Michoacán, a figure that goes up even more at this time of the year.

"Brokers are going to start price rationing and going to their highest-margin accounts with what they have left in the pipeline," Swanson said.

Any retailer not paying top dollar could see their allocation diverted to higher bidders.

"There really isn't an option to go elsewhere," he said.

When contacted by The Washington Post about how the ban is affecting them, Mission Produce and Calavo Growers, two of the largest importers, did not respond.

The USDA decided to stop imports when one of its plant-safety inspectors in Michoacán purportedly received a threatening message on his official cellphone.

The suspension will remain in place for as long as necessary to ensure actions are taken to keep APHIS personnel working safely in Mexico, according to Lucero Hernandez, an APHIS spokeswoman.

Commercial shipments of fresh Mexican Hass avocados have been imported from Michoacán since 1997. It is the only state currently approved to send avocados to the U.S.

According to Lopez of Agtools, the inspector in Michoacán found a shipment from the state of Puebla that was intended to be exported to the United States, which is not allowed.

"The people from the facility tried to intimidate and then [threaten] the inspector, so he reported it to the USDA, then they decided to pull out all the inspectors and close the border indefinitely," he said.

Martha Montoya, chief executive of Agtools, said experienced inspectors can identify an avocado's region of origin from their size, shape and skin texture. The American mania for avocados as a "good fat" has created a boom in Mexico, with many states growing them and attempting to find ways to sneak them into Michoacán so they can be sold in the United States, she said. The broadening U.S. racial and ethnic makeup has spurred greater avocado consumption, and younger generations have embraced the squishable fruit in droves.

In 2021, Michoacán sold 2.26 billion pounds of avocados into the United States, up from 1.9 billion just two years prior. This has happened, Swanson said, even as California has "steadily been transferring acreage away from avocados," leaving the United States more dependent upon Mexican imports.

The timing for the import ban, Montoya said, is dire.

After the Super Bowl, the next big avocado-centric holiday is coming right up.

"Cinco de Mayo is going to be impacted heavily," she said. "We have six weeks to be shipping product for the celebration."

The Mexican state of Jalisco was approved in December to start exporting to the United States, Montoya said, but that won't start until May or June, and the volume will be paltry compared with Michoacán's usual exports.

She said if the import ban goes on for months, it will be an opportunity for the Dominican Republic, Chile, Peru and other growing areas to sell into the United States at a higher price. But this import ban likely means the avocados will, according to Montoya, “be dumped into the domestic market” - which will lead to falling prices and dwindling profits for Mexican growers.