Governments and Violent, Criminal Enterprises Assault Avocado Market

If you’re a lover of the avocado or one of its many byproducts, chances are you’re experiencing a hard lesson in economics right now. As the demand for the tasty, healthy fruit has risen exponentially, the price has rocketed up while the supply has struggled to keep pace.

The shortage has gotten so bad that in New Zealand, according to Business Insider, thieves have started targeting avocado orchards to abscond with the popular fruit. In the true spirit of invasive government policy, they have further restricted the supply and made everyone worse off.

This string of thefts has created its own black market, complete with the lacking consumer protections that lead to potentially dangerous goods being sold. If “dangerous” and “avocado” don’t seem to be words that normally go together, you’re not alone. However, the nature of these raw avocados has more to it than meets the eye.

Aside from the hard, firm texture and bitter taste, many of these pilfered avocados are coated with deadly pesticides. While the thieves may be making decent profits on their stolen merchandise, even at its reduced price, consumers should be wary before they purchase.

What’s more, a violent Mexican cartel has taken over the industry in the Southwest state of Michoacán, per the Wall Street Journal. Acting like a state in their own right, they have extorted taxes from their producers and have controlled the supply leaving the country. The results seem to speak for themselves.

The article notes that, “despite soaring production, the wholesale price of avocados in Mexico has jumped 22% from a year ago.” It doesn’t take a huge stretch of the imagination to see that this forced monopolization of the avocado industry is no deal for producers or consumers.

In the face of high consumer demand, a cartel took control of the market in the only way a cartel really can: by force. In the face of this, some vigilantes have taken up arms to protect their avocados and repel their tormentors. While the vigilantes have begun to work with the Mexican government, the fight is still ongoing.

In the United States, inept policies pursued by the government itself have contributed to the shortage of avocados and their subsequent price rises. While Mother Jones reports how California supplies roughly 90% of the US avocado harvest, these avocados use up a lot of another precious commodity in California: water.

It takes 74.1 gallons of irrigated water to grow one pound of avocados, almost double the amount needed for the next most demanding fruit (42.1 gallons for peaches). This all being said, you might think it’d make sense for cities like San Diego to make better use of their water than, say, dumping it in a lake.

Unfortunately, this is no joke. While San Diego had begun stockpiling water years ago, anticipating higher demand, they did not foresee a California drought so intense that it would cause Governor Jerry Brown to order less water usage for consumers and businesses.

With more water than it could supply to the public, during a drought no less, San Diego ultimately dumped about 554 million gallons of drinkable water into the Lower Otay Reservoir. One can only imagine what a thirsty fruit like the avocado could’ve done with all of that.

So, from snowballing ham-fisted government policies to outright theft, market forces have been assaulted on all sides to make our guacamole that much more expensive. When producers are hamstrung in their ability to meet local and global demand, problems of restricted supply get that much worse.

If given the chance, we could see entrepreneurs rise to the occasion to innovate and meet this surging demand, as we’ve seen with oil innovation in the past. For this to happen, though, the government needs secure private property and fight off these outright coercive cartels. Ultimately, it’d be a good start to just stop pouring perfectly good water in a lake.