Workers strikes, climate change, and the fact that we love them so much is driving prices up
It's the fruit we've all become weirdly obsessed with. It's the lifeblood of the hipster generation. It's the basis of guacamole, an essential component of today's Cinco de Mayo celebrations. It's avocado – and it's running out.
This January, the price of an avocado in the United States was 89 cents. By March, it hit $1.25. Now, it's selling in some places for $2 – the highest prices we've seen for the fruit in 19 years.
What’s going on?
It's hard to stay rational in times like these, but we've taken it upon ourselves to breathe in and try and find out the economics behind where this shortage is coming from, and how we can fix it.
1. Avocado growers in Michoacán, the Mexican region where most avocados are grown, are on strike.
Earlier in February, over 500 avocado farmers went on strike across Michoacan, frustrated with the fact that the price avocado packers sell packed avocados to American businesses for is up to five times higher than what they paid the farmers. They blocked roads and stalled shipments to get the packers' attention – and it worked, somewhat. Talks have been going on, but it doesn't look like an agreement has been reached yet.
Setting up a business in agriculture is harder than a lot of other products because how much farmers can grow, and at what cost, is so dependent on things outside of their control – like weather patterns, or energy prices (which matter because of the cost of running the farms and transporting the finished product).
3. Literally, we just want too many avocados.
Honestly, it's a little much. The US has doubled their avocado intake between 2006 and 2015, and they're the biggest avocado consumer in the world. The usually economics measurement is 'per capita' – i.e. how many avocados are consumed on average per person. That figure jumped from 3.5 to 7 pounds a year. But when you think about the fact that it's probably mainly Mexicans and hipsters eating all the avocados, it's probably a lot more pounds each than that.
Demand for food is different from other things in that it's generally pretty steady no matter what – unlike something that's seasonal, or only in fashion for a little while, or gets old, we'll always buy food. That means that even if supply goes down, we’ll pay higher and higher prices for whatever’s left, because we just need it. Businesses know that, so they up the cost.
So what do we do?!
Avocado shortages are no joke. New Zealand faced one last year and this happened:
May is also the worst time for this – it’s Cinco de Mayo today, the day when the Mexican Army defeated the French at the Battle of Puebla in 1862, but also just a day when Mexican-Americans eat lots and lots of guacamole. Shit.
So what do we do?
First up, we’ve got to wait for the dispute with farmers to end. That depends on how negotiations between packers and growers go – the growers don’t feel the difference in profit is fair.
Second, we’d have to figure out how to make those water shortages and high temperatures go down. That’s what all that anti-climate-change campaigning is for.