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Avocado Prices Near a Five-Year High Ahead of Cinco de Mayo

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Avocado prices are approaching a five-year high ahead of the Cinco de Mayo holiday, one of the highest guacamole consumption days of the year. But, despite strong demand, avocado import volumes from Mexico have dropped sharply year over year. 

Recently, Texas Governor Greg Abbott’s order imposing safety inspections on trucks at the Texas-Mexico border, which was enacted on April 6 and rescinded nine days later, caused shipping delays and spoilage to some fruit. And earlier this year, just ahead of the Super Bowl, the biggest annual event for avocado sales, the US government briefly suspended Mexican avocado imports after a US plant safety inspector was threatened. 

These disruptive events and steady, robust demand have exacerbated the unseasonable mismatch among avocado sizes that materialized last August. This left the market without an opportunity to correct itself because producers began picking and shipping avocados earlier, leading to smaller fruit. Sizes for avocados are determined by how many fit inside of a 25 pound case, and the most popular, and most expensive, sizes are 48CT and 60CT.

To ensure continuity and price stability, avocado purchasers that can shift their orders to smaller,  less expensive avocados are increasingly doing so, lifting prices for smaller fruit along the way. 

This year 48CT and 60CT avocado prices have risen 43% and 40%, respectively, and the smaller 70CT and 80CT avocados are up 53% and 75% over the same period. Often shipping point prices for 70CT and 84CT avocados are 30%-50% lower than larger, more sought after sizes. 

Currently, those spreads are narrower. Shipping point prices for 48CT avocados are $79 per case compared to $69 per case for 60CT avocados. Meanwhile, shipping point prices for 70CT or 84CT avocados are $60 and $46 per case, respectively

Because the amount of pulp in each case yields similar amounts regardless of the size of each avocado, purchasers that buy avocados to make guacamole are in the best position to capture savings by ordering smaller avocados. With the Gro Platform, users have access to data to compare their purchasing habits against market pricing in real time. This data is also accessible through Gro's Excel add-in.


 


 

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