California Avocados Delicate Relationship With NAFTA

Brian GermanFruits & Vegetables, Trade

Some industry groups claim the North American Free Trade Agreement (NAFTA) has hurt California growers because of unfair competition from Mexico.  That is not the case for the avocado industry, which has a unique relationship with Mexican imports.

“I would take exception with the thought that the California avocado industry is a ‘posterchild’ if you will, of the harm of NAFTA on the sector,” said Vice President of Industry Affairs for the California Avocado Commission (CAC) Ken Melban.

naftaAmerican avocado consumption has grown tremendously, partially due to the promotion of their nutritional value.  “U.S. consumption, per capita, increased an average of 10 percent over the last 10, 12, 15 years,” said Melban.

With an increasing demand for avocados from either country, it puts added pressure on the overall supply.  Melban noted that a stable market hinges on a stable supply, “we are dependent upon offshore production to fill those gaps.”

Mexico supplies over 75 percent of all the avocados in the U.S. market when California avocados are out of season and not available.  Melban described NAFTA as a “very delicate partnership” that ensures a steady supply that ends up benefitting the industries in both countries.

There are significant concerns that if the U.S. completely backs out of NAFTA and tariffs are put back in place; it would cause a considerable shift in the market.  Melban explained that “consumers, their demand could begin to wane because either it’s so high in price, the limited supply, or there’s uncertainty in being able to buy them, so they don’t try.”

CAC shares the attitude toward NAFTA held by the USDA’s Agricultural Technical Advisory Committee for Trade in Fruits and Vegetables, which Melban is a member of.  “In the renegotiation of NAFTA, to not harm the produce sector,” Melban said, “we’re not saying it’s perfect and there’s not opportunity for some tweaking and improvement, but to not just blow it up.”