The price of avocados rose dramatically between January 2021 and July 2022. High avocado prices are affecting the consumption of an important ingredient in American restaurant dishes. Avocado is the main ingredient in guacamole and other popular Mexican dishes in the United States. Beyond Mexican food, avocado has become an important part of other cuisines.
The US avocado market was a $15.4 billion business in 2022 and some consumption forecasts expect this figure to reach $26.2 billion by 2028 (GVR 2022), increasing the value of consumption by 70% in just six years. Given the size of the market, fluctuations in avocado prices have a significant impact on American food retailers, restaurants, and consumers.
The rise in prices is one of the main causes of the decline in avocado consumption in the US. Prices have risen steadily over the past 18 months, peaking in June 2022. As a result of these month-to-month increases, avocado prices in June 2022 were 60% higher than in January 2021. Since June, prices have fallen by 25%, so they are now similar to the level they had in early 2021.
Changes in commodity prices are often due to supply shocks that affect the availability of products.
Starting in June 2021, the quantity supplied decreased below the average of the last three years. This deficit persisted and increased in the first half of 2022. The drop was so large that the difference in quantity supplied between 2022 and 2021 averaged 10 million pounds a month from January to June.