Supply and Demand Create Price Spike for Avocados

Supply and Demand Create Price Spike for Avocados

California consumers have seen their fair share of inflation for the foods they love, but this year’s surge in the price of an avocado has been enough to shock even the most jaded shopper. According to Bloomberg Markets, the price for a case of avocados from south of the border has doubled this year, due primarily to high demand.

Will Brokaw of Brokaw Ranch, a major avocado grower in California and vendor at the Monterey Bay Certified Famers Markets, has watched as demand for his primary crop has steadily grown over the years. “There are simply more avocado eaters in the world today,” Will explained recently. “In the 1990s, the US didn’t import any avocados. Today we import 85% of our avocados, mostly from Mexico.”

Bloomberg reports the American per capita consumption of avocados jumped from 3.5 pounds in 2006 to 6.9 pounds in 2015. There are several reasons for the increase, according to Brokaw. “Avocados are in vogue right now due to the healthy fats, oils and fiber an avocado contains. New markets for avocados have opened up as well, particularly China.”

Increased demand in existing markets such as the US is impressive: the US imported 1.76 billion pounds of avocados in 2015 from Mexico, up from just 24 million pounds in 2000, according to Bloomberg Markets.

The fact that avocado trees are alternate bearing trees, meaning they have a strong year followed by a down year in terms of production, has also added to supply being outstripped by demand. 2017 was a down year according to the California Avocado Commission’s annual report.

While the spike in avocado prices can be viewed as a negative for consumers, it’s a blessing for many farmers hurt by the recent drought in our state. With the threat of new pests such as the shot hole borer threatening California’s fruit trees, growers still need to be vigilant. Seasonal market fluctuations such as yields and prices present a never-ending challenge.

Lack of available avocados to sell make late summer and fall supply difficult according to Brokaw. “Avocados can’t be stored for long periods like other tree crops. We need to pick them and sell them.” That’s why Brokaw isn’t at the market until his orchards are ready for harvest. He’ll return to the markets early next year, but will prices still be high?

Bloomberg Market data shows that when prices are high, demand drops. Avocados are not a staple food item like milk, eggs and maybe even coffee. Commodity traders like to say, “Nothing cures high prices like high prices.” But for now, expect to pay up for your guacamole and avocado toast.