As Avocados Get Pricier, the Premium for Organic Is Falling

(Bloomberg) -- Here’s another ripple from President Donald Trump’s threat to close the U.S.-Mexico border: the extra price paid for organic avocados is falling.

Prices for avocados moving from top producer Mexico into Texas are up more than 40 percent in the past week, with a 25-pound carton of conventional fruit reaching about $60, according to the U.S. Department of Agriculture. A carton of organic avocado is fetching just $2 more, down from a $3 a week ago and $8 a month ago, according to David Magana, a senior analyst at Rabobank.

“Prices were probably rising too fast that consumers were not willing to pay the extra price, so they switched to the less-expensive option," Magana said.

Prices paid in Mexico City for Hass avocados from the top-producing state of Michoacan are up 34 percent this week to 390 pesos ($20.43) for a 10-kilogram (22-pound) box. Domestic prices in Mexico are typically lower as shippers choose higher quality fruit for more lucrative export markets

In the U.S., avocados are commonly traded in 25-pound cartons with as many as 84 units and as few as 32, depending on the size. Rabobank tracks 48-piece cartons that contain medium-size fruit.

Mexican avocados account for as much as 80 percent U.S. consumption. Known as a super-food thanks to heart-healthy monounsaturated fats, avocados are now on about half of menus at U.S. restaurants, according to Datassential.

Prices, which have stabilized after the surge earlier this week, had moved up even before the border threats, partly because of a late California harvest.

--With assistance from Carlos Manuel Rodriguez.

To contact the reporter on this story: Michael Hirtzer in Chicago at mhirtzer@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Joe Ryan

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