Avocado prices soar amid supply squeeze
- Hass avocado prices are up and will likely stay elevated through September, according to The Packer. Reduced volume from Mexico has translated to soaring prices, ranging from $80 to $100 per carton.
- “It is going to be tight for the next couple of weeks and then Mexico will start to get into its new bloom and regular crop, and we then we will start to see increased volume come out of Mexico,” Gary Caloroso, regional business development director at Giumarra Cos. in Los Angeles told The Packer. “There is just not enough fruit and incredible demand.”
- Consumers are still willing to pay for the fruit, despite higher prices. According to the U.S. Department of Agriculture, the average Hass avocado has an advertised price of $1.81 as of Sept. 1 — up from $1.05 for the same week last year.
Avocados are a trendy superfood right now that are so popular, consumers are willing to pay almost twice what they did a year ago to get their hands on the healthy-fat fruit. But do they understand why they have to pay more for what seems like the same piece of produce?
Produce supplies and prices are a tricky business. Grocers want to turn a profit while keeping prices competitive, which becomes more difficult if consumers think they’re being arbitrarily charged more for certain items. Some grocers try to insulate both their shoppers and themselves from these price hikes by buying more of an item when it’s cheaper. However, this is a difficult model to follow when those items spoil a week after delivery.
A consumer may be more forgiving of a higher price if they understood the backstory a bit more. Grocers facing higher prices for produce would do well by educating shoppers about their costs and what causes an avocado to cost $1 one year, and close to $2 the next. If they don’t feel like they’re being ripped off, consumers may be more accepting of the price hike.
The current higher prices are caused by lower supplies, plain and simple. However, things could get more complicated in the near future. There are a number of trade negotiations pending in the Trump administration. These could have a major impact on food prices in the future. Once again, it's key to retailers and produce companies and industry groups to keep the public informed as a proactive way to deal with potential cost fluctuations down the road.
- The Packer Hot avocado market squeezes consumers