Record Avocado Prices: Any Relief Coming?
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This is Your Money Matters from The Wall Street Journal. If you've been to the grocery store recently, you'll notice the price of avocados has gone up. Not just up, way up to record highs. So what's the story behind the price increases and can we expect prices to come down? Joining us to discuss is Wall Street Journal reporter Ben Parkin. So Ben, avocado prices have risen to, in some cases, record highs. What has caused the spike in prices?
Well, it's been a number of factors.
Why have avocado prices jumped to record highs?
The first thing is that... Avocado farming is quite unpredictable, and often a large crop one year is followed by a small crop the next. And California last year, it was too hot, if I'm not mistaken, and dry. And that set this year's crop off to a bad start, as it were. This year in particular, rather this summer, California had a harvest that was almost half of last year's. and that's coincided with a shortage coming out of Mexico, which is the world's largest producer. So the two together has just created a kind of a double whammy.
Now, the average price of an avocado is up 35% in the first half of this year to $1.21 per avocado. Is there any hope down the line for consumers?
The good news is that next year's California crop has got off to a good start, apparently, with plenty of rain and whatnot, so... So they're expecting a bigger crop next year.
And U.S. consumption of avocados has quadrupled since 2000. Consumers are drawn to the health benefits of avocados?
Yeah, it gets a lot of good publicity, you know, with sort of healthy fat content and nutrients. So, you know, at a time when people are increasingly turning against, you know, A lot of things that have been staples in the past and processed foods and whatnot, avocados have been able to kind of ride this superfood and natural food wave. And that's made them very desirable to a lot of people.
I'm speaking with Wall Street Journal reporter Ben Parkin, and you're listening to Your Money Matters. Thanks for listening, everybody. Now, Ben, for restaurant chains like Chipotle that use large volumes of avocados for guacamole, for example, the price hike could really hurt them in the balance sheet.
Prices are very volatile. They swing up and down.
What weather and crop factors caused shortages in California and Mexico?
We may well be at the peak of a huge spike, which would mean that they might get some relief in the months to come. But a company like Chipotle just has to weather these kinds of storms. There aren't many ways for them to And how is the farming industry hoping to take on the idea of having a bumper crop season one year and a less than robust season the next? One of the ways in which people are trying to prepare themselves, you know, for a rather buttress, you know, there's a business against these big swings in prices is through developing strains of avocado trees and fruit that don't have this phenomenon of, you know, big years followed by small years. So that's something, you know, scientists and trying to develop ways to grow avocados that will be more consistent from year to year and, you know, hopefully more reliable in that respect in terms of prices and in terms of supply.
All right. Ben Parkin of The Wall Street Journal, thanks for joining us. Thanks very much.
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