Avocado Industry Faces Challenges Amid Election Season

The avocado industry in Mexico faces uncertain times as experts warn of potential impacts from the current political climate in both Mexico and the United States. Additionally, recent revelations about illegal avocado orchards in Michoacan, highlight the need for heightened vigilance in the trade of this valuable produce.

Fernando Cruz, Consulting Partner, Agricultural Markets Consulting Group (GCMA), underscored that export products such as tomatoes and avocados will face challenges due to being targets of campaign promises for the US presidential elections. According to the specialist, the influx of Mexican products into the northern country leads to price decreases for consumers due to increasing competition, causing conflicts with local farmers.

“This year, with the US elections underway, our producers will likely feel the impact of Californian producers, who will undoubtedly lobby their representatives to curb the entry of Mexican products,” Cruz emphasized.

Turenna Ramírez, Lead Partner in International Trade, Holland and Knight, a global law firm, emphasized the significant influence of the impending presidential elections on the trade agendas of both countries for the coming decade. Additionally, she pointed out that this year lays the groundwork for the first review of USMCA in 2026, which could either bolster or hinder the region's position as a global trade hub.

Ramírez also urged Mexican presidential candidates to prioritize trade issues in their campaigns. "It is crucial that the agendas of candidates in Mexico and the United States align, so that whoever assumes the presidency understands the urgency of addressing foreign trade matters," she stressed.

In a recent meeting with Alfredo Ramírez, Governor of Michoacan, Ken Salazar, US Ambassador to Mexico, assured that Mexican avocados harvested under irregular conditions by organized crime will not be allowed to be commercialized in the United States. The US diplomat revealed that 817 illegal orchards have been detected through satellite surveillance in the forests of Michoacan.

Salazar reaffirmed his support for the Forest Guardian surveillance system, describing it as a key program for environmental protection. Additionally, he mentioned that laws implemented to combat extortion, such as reforms to the State Penal Code, should be followed up on.

In response, Cruz criticized the ambassador's remarks, arguing they demonstrate a lack of understanding of international trade dynamics. "Avocado exports account for 1.5Mt, with nearly two-thirds destined for the United States," Cruz pointed out.

Luciano Escobedo, Director, Infotrade Consulting, highlighted the fact that Avocados from Mexico did not feature their traditional Super Bowl advertisement last February. Escobedo suggested this decision might reflect a more cautious approach amid declining sales in the United States. Data from the Ministry of Agriculture and Rural Development (SADER) indicated a trade surplus of US$3.03 billion for avocados at the end of last year, representing a decrease in sales compared to the US$3.55 billion gathered in 2022. “Rising inflation and increased operating costs are squeezing profit margins for exporters, compounded by an unfavorable exchange rate,” Escobedo said.