Poor Harvests Send Avocado Prices Soaring

September 12, 2017

avocadosOne hundred years ago hardly any Americans outside of California had ever seen an avocado, let alone ate one. Then during the 1920s a Los Angeles postal worker named Rudolph Hass planted an avocado seed in his backyard that eventually grew into a highly productive tree. His children raved about how their father’s flavorful fruit beat out any competitors at the local market, eventually convincing him to patent the Hass Avocado in 1935. Soon growers across the region began to plant this particular variety in their groves, leading to increased production and lower prices.

Today, the Hass Avocado accounts for 95 percent of the more than 4 billion avocados that Americans eat annually. Consumption of avocados has quadrupled in the U.S. since 2000 with the average citizen eating 7 pounds of the fruit every year. Along with enjoying its unique flavor and texture, many people buy avocados for their nutrients and unsaturated fat content. Still, some may need to start phasing the fruit out of their diets if the cost of avocados continues to climb. Thanks to poor harvests throughout the supply chain, wholesale avocado prices have increased by 75 percent to around $80 per case.

Avocado farming has always been an unpredictable business since a good harvest one year is often followed by a poor one the next. But the fruit’s growing popularity has pushed prices to levels that haven’t been seen in decades. “There’s just not enough supply out there,” said American Restaurant Association president David Maloni. Higher costs could lead to price increases at chains like Chipotle, which spends 10 percent of its food budget on avocados. Still, not every company is fretting about the fruit’s rising value. Following its recent takeover by Amazon, Whole Foods stores across the country slashed avocado prices along with a variety of other discounted products.

Questions:

  1. How have supply and demand affected the price of avocados over the years?
  2. Why do you think the (Amazon-owned) chain Whole Foods is slashing avocado prices when their wholesale cost continues to increase?

Source: Benjamin Parkin, “Holy Guacamole! Avocado Prices Rise to Record Highs,” The Wall Street Journal, September 6, 2017; Emelyn Rude, “Americans Are Totally Obsessed With Avocados Thanks to This Man,” Time, June 27, 2017.

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