Our Weekly Economic News Roundup: From Pricing Congestion to Paying for College
April 6, 2019Where Meat Is Never a Free Lunch
April 8, 2019Fresh Direct told us that they eliminated the avocado pits.
But not really. It was April Fools::
However, avocados have been in the news.
This is the story.
Avocado Prices
When President Trump proclaimed that the U.S./Mexican border could close, the Hass avocado people responded logically with importers boosting their inventories. The price of a 25-pound carton soared to $60. During the previous week, it was $42:
Even before the surge, prices were rising because a heatwave delayed the California harvest. Now, Bloomberg tells us that, instead of 90%, this year we could be getting all of our Hass avocados from Mexico:
Our Bottom Line: Demand Determinants
On a supply and demand graph, the demand curve can shift for several reasons. Most typically we have a change in income that alters what consumers are willing and able to buy. Also altering what we buy, it is possible that the price of a substitute or a complementary product can change.
Here though our future expectations were the reason. Concerned about a border closing, wholesalers were increasing demand by stocking up now. As a result, the demand curve shifts to the right and price goes up:
Where are we? Yes, it could be the pits if the border closed.
My sources and more: Bloomberg and Marketwatch had the facts on avocado prices.