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Austin reels as avocado prices soar

Restaurants, grocers scramble and customers fume as demand exceeds supply

Matthew Odam
A sign on the front door of the Omelettry on Airport Boulevard gives customers the news about the lack of avocado on offer right now. [ELI IMADALI/AMERICAN-STATESMAN]

Do you love avocados in your tacos, fanned across a sandwich or salad, or coloring a dish of raw fish? The price of your affection might be going up at restaurants around town.

Wholesale prices for avocados imported from Mexico have more than doubled in the past month, according to Austin restaurant owners, leaving restaurateurs scrambling for ways to respond. Consumers are also seeing higher prices at grocery stores. The increases are caused by where we are in the growing season and a tightened supply, which is controlled by producers, according to industry experts.

Some restaurant operators have raised the prices of dishes, others have swallowed the extra cost at the expense of profits, and some have removed the fruit from their menu altogether.

At taco truck and taqueria Pueblo Viejo, the addition of sliced avocado to a taco has risen from about $1 to $2.50. The price increase started about a month ago, according to an employee at the truck at Cosmic Coffee in South Austin. The price hike aggravated some customers, leading the truck owners to post a sign in the window explaining the cost increase as a response to wholesale prices. An order of guacamole went from $7.50 to abut $9.

Just up South Congress Avenue from Pueblo Viejo, raw fish specialists Poke Poke have raised prices on dishes with avocado by $1.

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Product Services of Los Angeles, a large national distributor of avocados, wrote in a recent newsletter that extremely low production in Mexico and demand exceeding supply have led to the higher prices.

From February to April, generally more than 50 million pounds of avocados were produced each week in Mexico, according to the Haas Avocado Board. That number crested to 60 million the second week of April before crashing to 30 million the next week. The numbers continued to fall in subsequent weeks, bottoming out at 8.6 million the last week of June — a third of what Mexican farmers shipped the same week a year before.

Mexican yields have bounced back, however, and analysts expect growers to produce about 30 million pounds a week until fall.

Tony Stachurski, a division president at Dallas-based Hardie’s Fresh Foods, which sells produce to restaurants, grocers, schools and more, said that while transitions in growing regions have led to the temporary hike in prices, the main reason behind the output and price change is the small group of farmers and ranchers who control production coming out of Mexico.

“At the end of the day, Mexico has the amount of fruit that we need,” Stachurski said. “It’s extremely volatile, the avocado market. It is a high-demand, high-cost item controlled by very few farmers and ranchers.”

Instability in Mexico has also interrupted the normal flow of the exported fruit. According to the nonprofit Organized Crime and Corruptions Reporting Project, Mexican farmers claim that “each day about 48 tons — four truckloads worth of avocados — are stolen by gangs that hijack their shipments on state highways in Michohocán.”

Mexico accounts for 80% of the avocados consumed in the United States, which is why the shortage has been acutely felt here. California growers had the worst season they’ve had in 10 years, with yields topping out at about 10 million a week, as opposed to the 13 million a week they typically average, a 30% decline. The California season is coming to an end and will pick back up next spring.

The average American consumed 7.7 pounds of avocados in 2018, nearly four times the average in 2000. Avocados appear on more than half of U.S. menus, according to Bloomberg, a number that is probably higher in Central Texas.

While some area restaurants have raised prices or stopped purchasing avocados completely, others have chosen to swallow the cost and have continued to serve menu items at pre-hike prices. The many locations of Tacodeli, Veracruz All Natural and Jack Allen’s Kitchen have not raised prices on any of their dishes that contain avocados.

“We have decided not to raise taco prices or change how we use avocados in our recipes — and we use avocado a lot — so our margin of revenue is a lot smaller right now,” Ryan Myers of Veracruz All Natural said.

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But the Omelettry has completely stopped selling sliced or whole avocado. A BYA (Bring Your own Avocado) sign at the Airport Boulevard diner is a tongue-in-cheek warning about the new policy. Owner Jesse Carpenter said he was paying as low as $36 for a 48-count case about a month ago but that the price has almost tripled.

Carpenter said that when prices have spiked in years past, he has absorbed the cost, even paying up to $90 for a case at one point without raising menu prices. But when his delivery suppliers recently quoted a price of $106.95 a case, he decided to stop purchasing whole avocados until prices go down. The restaurant still serves mashed avocado, purchased in bags, in items such as omelettes.

While the restaurants dependent on imported avocados are adjusting to new economic realities, some who source closer to home have been able until just this week to avoid the higher prices for Mexican avocados.

Jesse Griffiths sources avocados directly from a farmer in South Texas for his Dai Due and Dai Taqueria, where he goes through about two or three cases a week. Griffiths said his restaurants had been “pretty insulated from market variations.”

But that protection came to an end this week: Griffiths said Monday he had purchased the last half case from his Texas farmer. Once it uses up that supply, Dai Due will take avocados off its menu until the Texas supply returns in mid-August, while Dai Due Taqueria will make the temporary shift to Mexican avocados. The prices for the tacos, however, will remain the same.

At local supermarkets, avocado prices have increased by about 40% since March, hitting close to $2 per large avocado in early July. At Whole Foods, a large avocado from California costs $1.99. At H-E-B, prices have dropped slightly to around $1.88 each, but that’s more than 50 cents more than they cost five months ago.

An H-E-B spokesperson confirmed that the price increase right now is due to the seasonal transition of growing regions, which tightens supply.

While many restaurants and grocery shoppers might be feeling the pinch from increased pricing and a limited supply, Stachurski said the pain should be temporary.

“Seeing fruit at this price is not really shocking,” Stachurski said. “We’ll see the supply chain react and correct itself."

American-Statesman writer Addie Broyles contributed to this report.