New York (CNN Business)Bad news for guacamole lovers, especially on Cinco de Mayo -— avocado prices are through the roof.
Last week, prices for a carton of 48 Hass avocados hit a high of about $78.75 on average, according to ProduceIQ, a digital marketplace for produce buyers and growers, which uses USDA data. That reflects the price for avocados coming into the United States from Mexico at the Texas border.
This time last year, avocado carton prices were in the $40 range, according to ProduceIQ.
“It’s been high all year … and it’s maintained historic highs,” said Mark Campbell, CEO of ProduceIQ.
A number of factors have led to higher prices this year, he said.
In February, the United States briefly suspended imports from Mexico’s western state of Michoacan after a US official received a threat. It didn’t take long for the US government to reinstate imports, but the brief disruption still drove prices up.
And a few months later, Texas Gov. Greg Abbott required “enhanced safety inspections” of commercial vehicles entering Texas for a week. That disruption resulted in hundreds of millions of lost dollars and delays in shipments — and raised avocado prices. That’s on top of less rain in the region, which has resulted in lower yields and smaller avocados, said Campbell.
Meanwhile, demand has been strong, noted David Magaña, senior analyst for horticulture at Rabobank. That’s not just due to typical spikes around the Super Bowl and Cinco de Mayo, but also because more Americans are interested in in avocados year-round, he said.
“Per capita consumption in the US has more than doubled over the last decade,” he said. “And I still think there is some room for growth.”
The good news is that prices have already eased off their highs, and could continue to fall.
The Peruvian avocado season has started, Campbell noted, which means that overall supply will increase, and could prices down further. And later this year, the US government will start accepting avocados from Jalisco, another region in Mexico. Previously, the US allowed imports only from Michoacan.
So what does all of this mean for consumers?
Some restaurants or retailers are already passing their costs onto customers. During an analyst call in April, Chipotle (CMG) noted that higher avocado prices contributed to the company’s decision to raise menu prices this year.
“Consumers are seeing some slightly elevated prices in supermarkets,” said David Rossi, fresh produce research analyst at Gro Intelligence, an agricultural data analytics firm. But, he noted, retailers can decided to absorb the cost and lessen the impact on consumers, reducing the impact on shoppers.
— CNN’s Alicia Wallace, Vanessa Yurkevich and Karol Suarez contributed to this report.
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