Mexico is currently the world's top producer of avocados. Americans have embraced avocados as a trendy, healthy diet staple, and their popularity has boomed accordingly. Approximately 1.9 billion pounds of Hass avocados were sold in 2017, roughly twice the amount of avocados consumed in 2005, and nearly four times as much as were sold in 2000. In under two decades, avocados have gone from relatively unknown to a mainstream. Popular chain restaurants like Burger King, Au Bon Pain, and Panera Bread (NASDAQ: PNRA) all use avocados as featured ingredients. The mention of avocado serves as a draw for food-conscious millenials, and oftentimes featuring it as an ingredient will drive up traffic to a particular store. In 2013, Los Angeles and New York were the top consumers of avocados, with roughly 300 and 100 million avocados consumed, respectively.
Mexico produces roughly a third of all avocados in the world, with Michoacan as one of the prime producing centrals. Recent unrest involving cartels has not slowed the industry, and in 2017 Mexico exported over 1.7 billion pounds of Hass avocados to America alone. The Mexican avocado trade has benefited greatly from the 2007 removal of import restrictions which once banned avocado shipments from Mexico.
The avocado trade was relatively unsuccessful until the late twentieth century and early twenty-first century. The trendiness and celebrity endorsements that avocados received helped its popularity skyrocket with incredible speed. Steve Barnard, the owner of a packing plant in Michoacan run by the world's largest distributor of avocados, estimates that his own corner of the industry grows at 10 to 15% annually. Keeping up with this rapid expansion is an immense struggle.
The North American Foreign Trade Agreement has removed tariffs across trade between Canada, the United States and Mexico. One huge benefit can be seen in the immense boost it has given to the Mexican avocado industry, which floods the United States with avocados year round. It has created approximately 19,000 jobs, and boosted the gross national product by over $2.2 billion. As for the American side of things, Nafta has helped U.S. exports to Mexico, which mostly consist of corn, soybeans, and dairy products, multiply by roughly five. But it's not all positive. The avocado craze has strained Michoacan's pine forests due to the pressing demand for more avocado orchards.
The global avocado craze gives no sign of letting up anytime soon. As long as demand grows, the avocado industry will continue to develop. If Trump puts an end to Nafta, it would cut off Mexican avocado imports, and the United States would be unable to cater to its population's avocado demands by tapping another market to replace its Mexican imports, as currently no other market has enough producing power to fill this gap.
China is the lone country with the potential to someday overtake Mexico as the world's leading producer of avocados, but as of now, it is not comparable in size. Chinese avocado growers seek to remediate this, by developing avocado plantations in Guangxi, and searching for a more affordable alternative to the sought-after Latin American kinds.