Mexico avocado ban: Prices to rise as trade tensions increase
February 16, 2022
The U.S. has temporarily suspended all imports of avocados from Mexico following a verbal threat made to U.S. safety inspectors.
The following Cornell University experts are available for interviews on how the ban may impact the supply of avocados and prices for consumers, as well as how the current climate between Mexico and the U.S. could cause further trade tensions.
Miguel Gómez, professor of applied economics and management in the Cornell SC Johnson College of Business, is an expert in global food supply chains and food value chains. Gómez says the Mexico avocado import suspension is already causing huge disruptions for the U.S. and he predicts prices will rise within days. Gomez is also available for interviews in Spanish.
“The suspension of avocado imports from Mexico is causing huge disruptions in the supply chains for the U.S. markets. Mexico is the origin of over 80% of avocados consumed in the U.S. in the January-March period. During this period Mexico reaches its production peak. The remaining supply comes from domestic sources (southern California), and imports from Chile, Dominican Republic and Colombia. Chile is ramping up shipments to the U.S., but the volume is quite insufficient to make up for the lack of Mexican avocados.
“With no clear idea of when the import ban will be lifted, my prediction is that prices will increase dramatically in the next few days and there will be avocado shortages in many parts of the country. Prices will start to decrease, and supply will become more normal when Peru – the second largest exporter worldwide – starts its harvest season in April.
“In the long run, the reputation of Mexico as avocado supplier may be affected in the future, given the social problems that exist in the primary production regions. Small and medium-sized avocado growers in Mexico are likely to be hurt the most.”
Desirée LeClercq is a professor of employment law at Cornell’s School of Industrial and Labor Relations and an expert on labor provisions in trade agreements. She says given the current climate, we may see Mexico continue to obstruct U.S. investigations which will require the U.S. to balance its inspection priorities and consumption demand.
“More recently, particularly but not limited to USMCA, the United States has increasingly controlled and inspected the production of goods in Mexican factories, and the Mexican government has accepted this intrusion as a necessary condition to accessing U.S. markets.
“The current aggressive climate might reflect frustration of Mexican employers with U.S. dominance and presence in their factories. We might see more measures in Mexico to obstruct U.S. investigations or otherwise show displeasure – which then requires the United States to balance its inspection priorities and U.S. consumption demand.
“In some situations, like America’s love affair with avocado toast, the United States’ decision will be difficult – although agencies will presumably always favor personnel safety, as is the case here.
“In other situations, like the recent GM union elections in Mexico, the potential ban (or withdrawal of trade preferences) of a competitive product may be welcomed by U.S. constituents, especially import competitors.
“I think we will see more of these clashes as the American grip on Mexican production processes tightens, and I think American sentiments will fluctuate depending on whether they are buying avocado toast at brunch or supporting union workers at a Wisconsin auto manufacturer.”