Avocado Price Spike Foreshadows Impact of Mexico Border Closing

Jorge I. Dominguez, PhD, is a retired Harvard University professor who has an extensive background as a Latin American scholar. As Antonio Madero Professor for the Study of Mexico, Dr. Jorge I. Dominguez has brought particular attention to the social and political issues impacting life in an emerging economy.

A recent MarketWatch article drew attention to the dangers inherent in President Donald Trump’s recent threats to close the US border with Mexico due to a surge in migrants from Central America.

A specific example is the popular Haas avocado, which jumped in price by more than 50 percent after the possibility of a complete border close became likely. Based on US Agricultural Department data, the wholesale prices of a carton of standard-sized avocados entering through Texas spiked to $44 in early April, from under $30. With the US importing some 90 percent of avocados from Mexico, the reliance on imports this year has been particularly acute, given a smaller-than-expected yield from Californian avocado crops.

Unfortunately for border protectionists, avocados are far from the most significant product entering the United States. The US auto industry is heavily reliant on parts made in Mexico for assembling vehicles, and many packaged food manufacturers source ingredients from Mexico. Other sectors with supply chains that would be adversely impacted by a border closure include technology, health care, and energy.

The bottom line is that many US business groups, facing what would be a major economic disruption, are arraying against a border closure that would impact commercial trade.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s