How America's love of avocados boosts economic growth

(BPT) – Last year, record-breaking imports of Avocados From Mexico contributed a whopping $4 billion to the U.S. gross domestic product (GDP), generating $6.5 billion in U.S. economic output.

According to a new report from Texas A&M University[1], imports of Mexican Hass avocados made substantial contributions to the U.S. economy during the 2019-2020 growing season. Over 2.1 billion pounds of avocados were imported into the U.S. from the Mexican state of Michoacán during that time, fueling consumers’ love of the healthy fruit while also positively benefiting and growing national and state economies in the United States.

Economic impacts of Mexican avocados

The economic analysis[2] summarizes significant contributions from U.S. imports of Mexican Hass avocados to the U.S. economy, including:

  • $6.5 billion in output or spending
  • $4.0 billion to the U.S. GDP (value-added)
  • 33,051 jobs for American workers
  • $2.2 billion in labor income
  • $1.1 billion in taxes

Comparing the results of this report to previous years reveals the increasing importance of Mexican avocados to the U.S. economy. The contribution of avocado imports to total U.S. output increased 273% — from $1.7 billion in 2012 to $6.5 billion in fiscal year 2019-20.

At the same time, the contribution of those imports to the U.S. GDP (value added) has increased by nearly 230%, from $1.2 billion to $3.99 billion. The contributions to U.S. labor income, tax revenues and employment have also registered dramatic increases (219%, 558% and 194%, respectively).

The report also showed that, as a result of the growing demand for avocados, domestic U.S. growers have benefited from higher price points and a larger market for their products.

This economic benefit also has a positive impact south of the border. Avocado farming continues to be a viable and sustainable business venture in Mexico. The Mexican avocado industry creates approximately 78,000 direct and permanent jobs, plus 310,000 indirect and seasonal jobs — providing a productive living in a region that was once one of the largest sources of migrant workers in the U.S.

“The numbers of the report show the expansive growth in economic benefits that avocado imports from Mexico have provided to the U.S.,” said Alvaro Luque, CEO of Avocados From Mexico. “Through our win-win partnership between the U.S. and Mexico, Avocados From Mexico has become an economic engine that supplies the growing demand for avocados in the U.S. and benefits the wholesale, retail and foodservice industries at both state and national levels. Despite the challenges rocking the foodservice industry this year, the avocado category has continued to grow in volume and economic value.”

Growing demand for the Mexican fruit

The record-breaking volume year for avocado imports is driven by the skyrocketing demand for avocados. Consumption of the fruit has grown over 600% between 1989-90 and 2019-20, an impressive 10% average annual growth rate over that period[1]. The unique microclimate, volcanic soil and timely rainfall of Michoacán, Mexico, allows avocados to be grown year-round, which is why its orchards supply nearly 82% of U.S. avocado imports.

Avocados From Mexico (AFM) represents a unique collaboration between the two countries: AFM is a nonprofit marketing organization that brings together the Mexican Hass Avocado Importers Association (MHAIA) and the Mexican Avocado Producers and Packers (APEAM) to promote the consumption of Mexican avocados in the U.S. This partnership has helped fuel the United States’ love for avocados and builds a bond that benefits both countries economically — not to mention increasing awareness of the health attributes avocados provide to consumers.

For more information, the full report can be found at The Avocado Institute, a resource hub with facts, news and education on the avocado industry in Mexico.

[2] This analysis utilizes the Impact Analysis and Planning Model (IMPLAN) to measure the jobs, revenues, wages and taxes generated by the imports along the value chain on the national and state economies. IMPLAN is an input-output model of the entire U.S. economy that captures the relationships between industries and estimates the economic effects (direct, indirect and induced). The IMPLAN model reports on four specifics types of economic effects: employment contribution, labor income, value-added and output or gross sales contribution.