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Wednesday, November 16, 2016

The Avocado

Have you noticed that if you add avocado to anything people will want it more? So let's try talking about Trump's trade policy but focus it on the avocado.  A recent CNBC report highlights the recent increase in avocado supply which is good news for you guac-lovers out there.  The CEO of Del Monte, Mohammad Abu-Ghazaleh noted that the high price had been unsustainable because "And that was actually by design of the [Mexican] growers, that they stopped picking fruit and stopped picking the avocados, which made a huge shortage in the pipeline. And that pushed the prices up to $70, $80 a box, which is really absurd."

Stop and think about that for a moment. How does that affect you personally? At $80 a box, the average retail price for a single avocado approaches $3. But what if we begin to restrict trade with Mexico? What if we impose a tariff on Mexican produce? The global average tariff on produce according to the USDA Economic Research Service is about 50%. Suddenly that $3 avocado is now $4.50. And in the winter, when almost all of our avocados are imported, that probably means fewer stores will stock avocados because that is a lot of money to spend on fruits that probably will not sell very well at retail given its exorbitant price.  

Just the first of many examples of micro-level impacts of Republicanism on our economy.

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