Mexico’s Quest to Satisfy Avocado Demand

09 October 2018

Americans’ love affair with avocados shows no sign of abating. Whether they are mashed into guacamole on Super Bowl Sunday or fashioned into avocado toast—the subject of many a joke targeting millennials—Americans eat an estimated 4.25 billion avocados each year. That’s more than four times as much as in 2000, and the rate of growth is expected to continue.

The United States, which once had a vibrant avocado industry of its own, now turns to Mexico for about 85 percent of the avocados it consumes. Mexico, conveniently located next door, and with a mild climate and fertile volcanic soils that make avocados a year-round crop, has taken advantage of growing US demand to propel a veritable boom in its avocado production.

That growth has come at a cost, however. Expansion of avocado plantations has brought substantial deforestation of Mexico’s native pine forests. And profits from avocado exports have attracted organized-crime gangs seeking protection money from growers. Mexican officials are attempting to alleviate such problems, but challenges remain.

Gro Intelligence recently launched data from SIAP, which is Mexico’s Agricultural and Fisheries Information Service. This data source provides insight into the production and trade of many valuable commodities produced by Mexico. Gro subscribers can readily chart and visualize a wide range of annual and monthly data to help make predictions about markets and global trade. In this week’s Gro Intelligence Insight article, we examine Mexico’s avocado industry and its importance to the US market.

Read more:

Mexico and the Avocado
Consumption Grows Unabated
The Price of Production
Conclusion

Mexico and the Avocado

Avocados have been in Mexico for an estimated 10,000 years, growing wild before being cultivated some 5,000 years ago. With the arrival of European explorers in the 1500s, the fruit quickly spread to other tropical regions including the Caribbean and the Philippines. Avocados were introduced to Hawaii in 1825, followed by Florida and California. Today, it is grown commercially throughout tropical regions of the Americas, and in similar climates in countries such as New Zealand, Israel, South Africa, southern France, and Spain.

Production of avocados has always been important in Mexico, where the fruit is used in cultural dishes and provides jobs to nearly 500,000 people. Thirty years ago, Mexico produced about 566,000 tonnes per year. This jumped by last year to 1.64 million tonnes. The USDA forecasts Mexico’s avocado production will rise again in 2017/18 to 1.8-1.9 million tonnes. Most of that production—an estimated 87 percent—comes from the state of Michoacán, which has over 120,000 hectares of land in production. According to the Association of Avocado Producers, Packers and Exporters of Michoacán (APEAM), for every 10 avocados sold in the US, eight were grown in Michoacán state.

Mexico’s avocado yields generally range from 8-10 tonnes per hectare, which can be influenced by avocado cultivar, the age of the tree, weather, and level of technology used on the farm. Adoption of more advanced technology like machinery for harvest, and irrigation systems can help increase yields.

The state of Michoacán, southeast of Colima on the map, dominates Mexico’s avocado production because of its ideal climate and fertile soils. For every 10 avocados sold in the US, eight are grown in Michoacán, the state growers’ association says.
Mexico’s avocado yields (blue line) have stayed relatively constant at 8-10 tonnes per hectare even as production (green bars) has increased rapidly over the past 30 years.

Consumption Grows Unabated

Mexico’s booming avocado sector has largely been influenced by US consumption. The fruit’s “superfood” status, and huge marketing efforts, prompted US consumers to develop a growing taste for avocados over the last 20 years. On Super Bowl Sunday alone, Americans eat an average 120 million pounds of avocados, mostly in guacamole. According to the Hass Avocado Board, Americans consumed 1 billion avocados in 2000. Today, that figure is over 4.25 billion, with no signs of slowing down.

The US also produces avocados, mostly in California. But US output, amounting to 172,630 tonnes last year, pales next to avocado imports of 900,185 tonnes, a record amount. Unlike their neighbors in Mexico, US producers struggle with growing avocados year-round because of climatic differences that limit production to certain areas. California researchers are experimenting with new varieties that are more tolerant of colder climates.

Many countries grow avocados, but Mexico’s output takes the lead by a wide margin.The chart above shows the world’s top-five producers by volume.
Even as US avocado imports soar (green bars), domestic production stagnates (blue line).
 

Mexico’s avocado exports soared to nearly 1 million tonnes from 208,349 tonnes in the decade ending 2016, according to the United Nations’ Food and Agriculture Organization, or FAO. Exports rose again in 2017/18 to 1.02 million tonnes, and are expected to increase 5 percent to 1.07 million tonnes in 2018/19. An estimated 78 percent of Mexico’s avocado exports head to the US.

Mexico also exports avocados to Japan, Canada, France, and Spain, and is looking to further diversify export markets, especially during times of trade uncertainty with the US. Demand in China is growing, and the country is expected to import approximately 16,000 tonnes this year, according to APEAM. Ramón Paz, spokesman for the growers’ association, said export volume to China depends largely on the availability of avocados, because fulfilling US market demand is the top priority.

Mexico’s avocado exports are rapidly rising due to increasing demand, especially from the US.

The Price of Production

Mexico’s growing avocado production has come at a cost. Rising exports have been profitable for some producers and that, in turn, has attracted the attention of local organized crime gangs who look to extort farmers and packers. The practice has earned the fruit the nicknames “blood avocado” and “green gold.” Some municipalities are fighting back. Tancítaro, a municipality in Michoacán, has set up autodefensas—a self-defense specialized police force organized by the citizens and funded partially by the avocado farmers to help protect the local economy.

Another cost of growing production has been deforestation as large areas of land are cleared to make way for more avocado trees. This deforestation is highly unsustainable—clearing forests can disturb wildlife, and decreased vegetation can contribute to higher levels of greenhouse gases. A report published by Mexico’s National Institute for Forestry, Farming and Fisheries Research estimates that 690 hectares of forest were cleared every year between 2000 and 2010 to grow more avocados. Most of these forests are of pine and fir trees, which thrive at the same altitude and climate as avocado trees. This area also is home to the Monarch butterfly’s Mexican winter habitat, so rapid deforestation could imperil the species’ population and health.

Government efforts to reduce deforestation have struggled. A program of conservation subsidies, for instance, essentially paying farmers not to grow avocados, failed to overcome the problem that the fruit was more profitable than the subsidies, according to a study by the University of Miami Law School. Such programs also are hard to enforce, and illegal plantings, including in protected Monarch butterfly grounds, continue to elude authorities. APEAM also says it has conducted reforestation efforts, planting thousands of pine seedlings.

Deforestation is a significant problem in Mexico’s avocado growing regions. The display above shows NDVI, or normalized difference vegetation index, a satellite-generated measure of live green vegetation. NDVI maps since 2011, when data became available, show decreasing areas with green, or higher levels of vegetation, and increasing areas with orange, or less vegetation.

Conclusion

Growing avocado consumption shows no sign of slowing, and this will continue to drive production, particularly in Mexico, and global trade of the tropical fruit. The trend will continue to put pressure on land use and depleted forests. Mexican officials are aware of the importance of finding a sustainable route for continued growth of the avocado sector. Additional conservation efforts, as well as further research to increase per-hectare yields, may be needed to maintain this important segment of Mexico’s agricultural economy.

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