Mexican avocado in 2022: What is the cost of the export suspension and how important could it be?

Avocado marketing has been going through a delicate time in recent days. The suspension of Mexican avocado imports came after a U.S. security inspector received a credible death threat. The inspector had denied permission for a shipment from the Mexican state of Michoacán.

Although Mexican and US authorities are actively working to resume exports to the US, the suspension order remained in place as of Friday, February 18.

Michoacán, until last year, was the only state in Mexico authorized to export avocados to the United States. As of April, Jalisco will also be able to send the fruit to the U.S. market.

The suspension was due to a safety issue

In a statement to Abasto, the Mexican avocado industry in the United States reported that the Association of Avocado Producers and Packers Exporters of Mexico (APEAM) is actively working with USDA-APHIS, the Mexican Ministry of Agriculture (SADER) and other authorities to quickly address the situation in Mexico, strengthen safety protocols and ensure continued compliance with the requirements of this important program for exporting Mexican avocados to the United States.

A working session held between Mexican and U.S. authorities, in coordination with APEAM, resulted in positive developments and an open dialogue.

APEAM, supported by Mexican authorities, presented a comprehensive proposal to strengthen security protocols and create an Intelligence and Security Unit within APEAM to support the export program. The Governor of Michoacán committed to immediately implement the operational security plan.

The proposal was well received by US government representatives and a memorandum of understanding will follow after the proposal is reviewed and officially approved.

But what will be the impact of the suspension of Mexican avocado exports?

In 2021 Michoacán shipped to the United States 2.25 billion pounds and this volume has been increasing in recent years, 3.4% with respect to the volume in 2020 and 20% when compared against 2019, following this line of growth in 2022 would expect a volume ranging between 2.34 to 2.7 billion pounds.

This number represented 80.64% of the volume consumed in the United States, with California being the next producing region with just 8.9% of the total.

It is well known that the Super Bowl is one of the dates when most avocados are consumed in our country, but for the Cinco de Mayo celebrations, avocado consumption tends to increase even more.

Last year between January 1 and February 12, Mexico exported 304,508,238 pounds to the United States, but after the Super Bowl and up to May 4, the volume exported was 554,592,125 and the sales price of this fruit at the McAllen border represented an approximate of $780 million.

Historically we can also see how as May 5th approaches the price of avocados increases considerably. For example, the price of size 84s, which the previous week reached $23.25 per box versus $16.25 before the Super Bowl, represented a price increase of 43%, which speaks of the demand for this fruit due to Mexican celebrations during May.

In addition to Michoacán, another Mexican state that can send avocados to the U.S. as of 2022 is Jalisco. But the volume of this one cannot supply the demand of fruit that the state of Michoacán produces. In 2020, Michoacán had a production of 1.8 million tons while Jalisco barely reached 248,000 tons, and Mexico had a total production of 2.3 million tons. In other words, Michoacán represents 78% of the avocado volume produced by the whole country.

Michoacán represents 78% of the volume of Mexican avocados produced throughout the country

If we analyze the production of other countries that send avocado to the United States, such as Peru, we see how the volume of this has increased by 38% since 2017. But despite this increase, it is barely 6.2% of the volume consumed in the US.

For another country such as Peru, Colombia or the Dominican Republic, to supply Mexico’s production, 1 to 3 years must pass, since this is the time it takes to produce a new tree depending on the maturity it has when planted, since it can be purchased from a nursery or grown from seed.

This is why Mexican avocados from Michoacan are key for consumers in the United States, and what happens in the coming weeks on this issue will be key, in addition to directly impacting the lives of Michoacán farmers and their workers.

According to Mexico’s Servicio Nacional de Sanidad, Inocuidad y Calidad Agroalimentaria, 64% of Mexican avocado exports to the United States come from the harvests of micro and small producers, who grow the fruit in 27,712 orchards of less than 10 hectares.

The Asociación de Productores y Empacadores Exportadores de Aguacate de México is comprised of more than 30,000 growers and 74 export packers. Michoacán’s avocado belt is made up of 43 municipalities, the only ones authorized by the USDA to export to the United States. This market currently represents 84% of exports, although Michoacán also exports to Canada, Japan, China and other Asian countries, Europe and Central America.

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