As guacamole, avocados are a staple of tailgate parties and happy hours, and in recent years, avocado toast has become a trendy go-to breakfast. However, the small green fruit is generally not known to be at the center of an international controversy involving U.S. government employees and Mexican drug cartels. Yet, on the eve of the Super Bowl, a day on which the United States consumes huge numbers of avocados, that’s exactly what happened. In response to a threat from a Mexican drug cartel received by a member of the U.S. Department of Agriculture’s Animal and Plant Health Inspection Services, the U.S. abruptly halted all imports of avocados grown in Mexico.
The announcement of the suspension of avocado imports sent shockwaves through the restaurant industry, an industry already reeling from pandemic related issues. While some avocados are grown in the United States, about 80 percent of the avocados consumed by Americans are imported from the Michoacán region of Mexico, making it difficult to quickly find an alternative source. Moreover, because of perishability issues together with the fact that avocados are usually consumed fresh, it is difficult to stockpile the fruit in times of shortages. Indeed, restaurant owners were left scrambling for ways to deal with the sudden ban, knowing that prices were likely to jump so high that it was unlikely that cost increases could either be absorbed or passed along to the consumer. While the ban on avocados imported from Mexico was lifted later in the week, it served as a reminder that trade, while generally desirable can be less palatable at times.
Discussion Questions:
1. Why would a ban on avocados from Mexico cause prices in the United States to rise?
2. Using trade theory, explain why, given that the United States has the ability to grow avocados, 80 percent of the avocados consumed by Americans are imported from Mexico. What are the benefits of buying the fruit from Mexico? What are the drawbacks of doing so? 3. Avocados are generally eaten fresh, limiting the ability to stockpile the fruit when prices are low. Discuss the challenges associated with imports of perishable products like avocados as compared to other agricultural products like grains.
Sources | You Tube: Why is there an avocado shortage?, Mexico says conspiracy behind avocado ban; US cites violence ; The NY Times: U.S Lifts Temporary Ban on Avocados From Mexico; Photo by Brian Wangenheim on Unsplash