This Cinco de Mayo, more party hosts may say "hold the guacamole!"
Depending on the variety, avocado prices are up as much as 55% this year, just in time for Friday's celebration of the Mexican holiday.
The average price of an avocado was $1.43 in the most recent U.S. Department of Agriculture weekly retail price report, compared to 92 cents last year. The popular Hass variety, however, is still a relative bargain at $1.38, down from $1.40 a year ago.
Behind the price spike is a perfect storm of issues, including higher demand worldwide, harsh weather during the blooming season, salty soil in California after years of drought and the fickle nature of the trees themselves.
Higher prices are going to put a damper on all those Cinco de Mayo parties. The California Avocado Commission predicts 105 million pounds of avocados will be devoured for the holiday, down from 135 million last year.
"When the fruit is priced higher, it’s priced higher at retail and food service," said commission spokeswoman Jan DeLyser . People are still buying and consuming avocados, but instead of buying multiples, four to six. they’re buying two to three because of the price."
California produces 15% to 20% of the avocados consumed in the U.S. The rest mostly come from Mexico. But this year, supplies are extra tight.
Mexico, which produces most of the avocados Americans eat, is dealing with a crop that's 20% smaller. It is expected to ship 1.6 billion pounds, down from 1.9 billion pounds last year, said Ramon Paz, spokesman for the Mexican Avocado Producers. California growers expect to deliver only half as many avocados as they did in 2016,
"Demand has been growing in the U.S.... and now we come with a temporarily lower supply. That creates tension in prices," said Paz. Even countries like South Africa, Peru and New Zealand which also produce avocados are seeing smaller crops this year.
Wholesale avocado prices are more than double what they were last year, due to limited production both in Mexico and in the U.S. The wholesale price of a 25-pound box of Mexican avocados is $54 now versus $22 in 2016.
California has been seeing similar price increases at wholesale. "We’ve suffered the last several years under drought," said Rick Shade of Shade Farm Management, which oversees about 600 acres in California's Santa Barbara and Ventura counties. "Even though prices are high, we have a much smaller crop. Our production per acre is down, so we may not necessarily be making more money."
So far, fast-food chains that depend on avocados have held the line on prices. Chipotle Mexican Grill, for instance, says it has no new surcharge, although charging extra for avocado is a common practice in the restaurant industry.
"Almost every restaurant you go to, there’s an upcharge for avocado," said Greg Johnson, editor of The Packer, a trade publication for the produce industry. They were already up charging before and making a profit, so maybe it digs into that a little, but they’re still making a profit."
Never mind the prices. Some supermarket chains say they are having trouble getting adequate supplies of avocados. Midwestern chain, Hy-Vee, said it's been dealing with a shortage for the past eight to 10 weeks.
"We’re just beginning to see a rebound in the supply, but prices remain considerably higher than last year," said spokeswoman Tara Deering-Hansen. "At no time were we ever out of avocados, however, the shortage did limit our companywide promotions of the product,"
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