Last week, prices for a box of 48 Hass avocados peaked averaging about $78.75, according to ProduceIQ, a digital marketplace for buyers and producers of produce using USDA data. That reflects the price of avocados coming into the United States from Mexico on the Texas border.
This time last year, prices for avocado boxes were in the $40 range, according to ProduceIQ.
“It’s been high all year…and it’s held all-time highs,” said Mark Campbell, CEO of ProduceIQ.
A number of factors have led to higher prices this year, he said.
In February, the United States briefly suspended imports from Mexico’s western state of Michoacan after a US official received a threat. It wasn’t long before the US government reintroduced imports, but the brief hiatus pushed prices higher nonetheless. And a few months later, Texas Gov. Greg Abbott spent a week requiring “enhanced safety inspections” of commercial vehicles entering Texas. That disruption resulted in hundreds of millions of dollars in lost dollars and delays in shipments — and boosted avocado prices. In addition, there is less rain in the region, which has resulted in lower yields and smaller avocados, Campbell said.
Meanwhile, demand has been strong, noted David Magaña, senior horticultural analyst at Rabobank. That’s not only because of the typical spikes at the Super Bowl and Cinco de Mayo, but also because more Americans are interested in avocados year-round, he said.
“U.S. per capita consumption has more than doubled in the last decade,” he said. “And I still think there’s room for growth.”
The good news is that prices are already past their highs and could fall further.
Peru’s avocado season has started, Campbell noted, meaning overall supply will increase and prices could fall further. And later this year, the US government will begin accepting avocados from Jalisco, another region in Mexico. Previously, the US only allowed imports from Michoacan.
What does all this mean for consumers?
Some restaurants or retailers are already passing their costs on to customers. During an analyst call in April, Chipotle (CMG) noted that higher avocado prices contributed to the company’s decision to raise menu prices this year.
“Consumers are seeing some slightly higher prices in supermarkets,” said David Rossi, fresh produce research analyst at Gro Intelligence, an agricultural data analytics firm. However, he noted that retailers can choose to bear the cost and reduce the impact on consumers, thereby reducing the impact on shoppers.
– CNN’s Alicia Wallace, Vanessa Yurkevich and Karol Suarez contributed to this report.