Mexican avocados give big boost to U.S. economy

There is a significant economic benefit on both sides of the border derived from the imports of Hass avocados from Mexico into the U.S. markets.

Those were the findings released this week in a study conducted by two researchers at Texas A&M University for the Mexican Hass Avocado Import Association and Asociación de Productores y Empacadores Exportadores de Aguacate de México. The economic analysis of 2021-22 crop year updates several previous analyses on the same subject.

Ana Ambrosi, director of corporate communications and public relations for Avocados From Mexico, gave the press a preview of the report via an internet briefing on Tuesday, Sept. 27. 

During the briefing Ambrosi called the economic impact a “win-win-win” referring to the U.S. and Mexico’s economy and U.S. consumers, who she said have received the benefit of year-round access to high quality avocados. That access has greatly increased U.S. per capita consumption of avocados by more than 600 percent over the last three decades, with an annual growth rate of 9.6 percent. Per capita consumption has risen from 1.07 pounds in 1989/90 to more than 9 pounds per person during the 2021/22 crop year.

In the last decade, total avocado imports have tripled and in just the past seven years, Mexico has doubled its avocado imports into the United States going from 1.2 billion pounds in the 2016/2017 season to 2.4 billion this past season.

These record imports have resulted in a substantial increase in the economic impact in the United States, according to the study. In FY 2021/22, U.S. imports of Mexican Hass avocados contributed $11.2 billion in output or spending compared to $6.5 billion just two years earlier. The researchers estimated a $6.1 billion contribution to the U.S. GDP , and the creation of 58,299 jobs compared to 33,051 jobs in the 2019/20 season. They also estimated that the imports generated $1.3 billion in U.S. taxes.

Mexico also received significant economic benefit. The researchers noted that there are 30,000 avocado growers and 74 packing houses in Mexico participating in the cross-border trade. The trading is credited with directly generating 78,000 jobs and indirectly adding 300,000 jobs in Mexico.

The researchers articulated several factors leading to “the rather sudden and rapid growth rate of avocado consumption in the United States,” including an expanding U.S. Hispanic and Caribbean population; increased inclusion of avocados in the U.S. food offerings at both fast-food and white table cloth restaurants; and U.S. consumer trends elevating healthy and ethnic eating while there has been growing consumer awareness of the health benefits of avocados.  The researchers also credited what they called “the highly effective avocado promotion efforts under the Hass Avocado Promotion, Research and Information Order established in 2002.”

The researchers took note of the recent opening of the state of Jalisco to export avocados to the United States. Expanding beyond the state of Michoacán, which has been the sole Mexican state allowed to export avocados to the U.S. market “provides increased diversity in sourcing for U.S. buyers and enhances the ability of the Mexican industry to meet the growing year-round demand for avocados by U.S. consumers,” the report said. 

To analyze the extent of the economic stimulus created by the avocado imports, the researchers revealed that they employed a methodology referred to as “economic contribution analysis.” The analysis is based on the idea that a dollar spent in one sector of an economy stimulates additional economic activity as it circulates through the economy.

The report states: “Thus, every dollar of Mexican Hass avocado imports in FY 2021/22 generated $2.79 dollars in output, $1.51 in U.S. GDP, and $0.98 in labor income.”

In their executive summary, the two authors -- Emeritus Professor Dr. Gary W. Williams and Extension Program Associate Dan Hanselka — noted:  “Once again, the primary implication of this update study is clear and straight forward: Imports of Mexican Hass avocados are pro-growth for the U.S. economy. Given the likely continuing, positive growth path of imports of Mexican Hass avocados, their current contribution to the U.S. economy will only intensify over the years.”

They further concluded: “…any trade policy or other restrictions on the level of U.S. Mexican Hass avocado imports would have a substantial and growing negative impact on the U.S. economy.”