Cost Reduction

Avocado Imports from Mexico Halted

Last week, a US official avocado inspector located in Michoacán, Mexico, received a threatening call to his official cell phone. Citing the need to ensure inspector safety, avocado imports have been halted by the US Department of Agriculture Animal and Plant Health Inspection Service in Michoacán—starting immediately. 

Employee safety is at the forefront of every stage of the food system, from restaurants to farms and food processors. For major suppliers, changes at the distribution link are creating rippling impacts throughout the supply chain. Since Michoacán is the only state fully authorized to export avocados to the United States, purveyors and restaurants can expect prices to increase dramatically this week. The avocado industry employs over 300,000 employees who will be affected by the import suspension. Given the uncertainty of resuming export, the existing supply of avocados in the United States will be in high demand, with prices passed on to restaurants and retail consumers. 

The avocado industry is now caught within the internal struggle of cartel turf wars and the exploitation of avocado growers. This incident is not the first of its kind; in August 2019, a team of USDA inspectors was threatened by a gang in the town of Ziracuaretiro. At that time, the agency set a precedent for any future occurrences that risked inspector safety: “For future situations that result in a security breach, or demonstrate an imminent physical threat to the well-being of APHIS personnel, we will immediately suspend program activities.”

As supply chain issues have plagued restaurants in the last couple of years due to pandemic-related issues of a worker shortage and unpredictable climate and international policies, owners face the dilemma of whether or not to raise menu prices for customers while dealing with fluctuating costs. Potential solutions include more flexible menu structures that allow for ingredient replacement or communicating price increases transparently to consumers. 

According to Wells Fargo Chief Agricultural Economist Michael Swanson, Michoacán sold 2.26 billion pounds of avocados to the United States in 2021. 

Cost Reduction
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