Mexico Tries and Fails to Get Michoacan’s “Green Gold” (Avocados) Back on the Market [Updated]

Is there more to this story than we are being told?

[Update: On early afternoon Friday afternoon, the US Department of Agriculture’s Animal and Plant Health Inspection Service announced that it was resuming its inspection program in Michoacan, Mexico and that avocado exports to the United States could recommence]

The U.S. government’s decision, on February 11, just three days before the Superbowl, to block all imports of avocados from the Mexican state of Michoacan following a threatening phone call to a US Department of Agriculture official has caused serious problems for Mexican growers and traders. More than 25,000 tons of inventory are at risk of being lost if the trade ban continues. Even if the suspension lasts just one week, it would mean the loss of an estimated $70 million in sales.

On the other side of the border avocado prices are expected to rise in the coming days. While avocados that had already been inspected can still be shipped north, there are signs that supplies are beginning to tighten. Wholesalers in the U.S. that import avocados may have to look beyond Mexico, which currently supplies around 80% of U.S. imports of the fruit.

Thousands of Workers Going Hungry

But the real economic pain is being felt in Michoacan, one of Mexico’s poorest states, where thousands of avocado pickers have lost their only source of income. Many have spend the last few days lining a roadside on the outskirts of the city of Uruapan, Michoacan, requesting donations from passing drivers.

“Since last Wednesday we haven’t picked anything,” said one of the workers, who refused to give his name because of the widespread violence in the state. “In the meantime, you die of hunger.”

Although Mexico has expressed optimism that the situation would be resolved promptly, the US responded Thursday that its position has not changed. The Biden administration has said from the beginning that it will not resume imports until the safety of the more than 70 US inspectors who work in Mexican fields is guaranteed. Among the proposals outlined is the creation of an investigation and security unit in Michoacan, which has already received the support of the governor of Michoacán, Alfredo Ramírez Bedolla, the municipal authorities and producers in the region.

Green Gold

For Mexico’s economy, avocados have become so valuable that they are often referred to as “oro verde” (green gold). And Michoacan is ground zero for the industry, employing some 300,000 workers to cultivate, tender, harvest and process the cash crop. Mexico is the world’s largest supplier of avocados. Its avocados account for roughly a third of global sales. Over two-thirds of those avocados are grown in the state of Michoacán.

Michoacán growers are the only suppliers included in the US Department of Agriculture certified export program. This has led to clashes in the past between growers from other regions and those in Michoacan. In 2018 two third’s of Michoacan’s avocado growers shut down their orchards and blocked many of the roads used to transport the produce as the growers accused packing firms of using inferior quality, lower priced produce from other regions to ship to the US market.

Since the turn of this century the total value of Mexico’s global exports of avocado has ballooned from €73 million to over $3 billion today. Between January and November 2021 Mexico exported a total of 1.27 million tons, with a value of 3,049.4 million dollars. The country exports 97% of its production to eight countries: the United States, Canada, Japan, Spain, Honduras, the Netherlands, El Salvador and France.

That industry is now facing a major threat, and all apparently due to one phone call. As Mexico’s Department of Agriculture recounted at the beginning of this week, “U.S. health authorities… made the decision after one of their officials, who was carrying out inspections in Uruapan, Michoacan, received a threatening message on his official cellphone.”

This is apparently not the first time Mexican drug gangs have threatened USDA inspectors. In 2019, members of a criminal organization threatened a USDA team of inspectors in Ziracuaretiro in Michoacan and stole the car they were travelling in. The U.S. agency then wrote a letter warning that if there was another threat to their inspectors in Michoacan, they would suspend the avocado program. Which is exactly what has happened.

However, it is hard to shake the feeling that there may be just be a little more to this story than first meets the eye. For a start, the timing of the ban is suspicious, coming just three days before Superbowl, when millions of Americans sit down for their time-honored bowl of Guacamole and watch the Avocados from Mexico commercial. This is the biggest moment in the calendar year for Mexico’s avocado trade, when American minds and bellies are most focused on the succulent green, buttery fruit.

Michoacan: A Vital Strategic Cog

Another curious aspect of the timing is that Michoacan’s avocado industry has been ruled with bloodthirsty zeal by narcotraficantes for well over a decade yet it’s only now that U.S. authorities are taking action. Michoacan is a vital strategic cog in the narcotics supply chain for two main reasons: the strategically located Pacific-coast port of Lázaro Cárdenas, where much of the cocaine from Colombia and fentanyl from China arrives and which rival gangs have been vying to control for decades; and the region’s extensive opium fields.

But the gangs have been diversifying into other sectors, spreading a thick trail of gory bloodshed and mayhem in the process. Eight years ago, the LA Times reported that the state’s two biggest cartels, the Knights Telmpar and the Familia Michoacana, were sticking “their hand deep in the [avocado] industry’s pockets”:

For each hectare of land used by growers, according to El Economista, they demand a quota of 2,000 pesos (about $152).  Then they extort the fruit sellers – between 1 and 3 pesos (8-23 cents) for each kilo.  If they don’t pay, there’s retribution: last April, two avocado packing plants were burned after the owners refused.

Before the Knight Templars hit the scene, Los Zetas were bossing the business, as the Mexican daily Excelsior reported in 2016 (translation my own):

The narcos have controlled much of this market since 2007, when Los Zetas intimidated, extorted and robbed producers. After violently displacing Los Zetas, the Familia Michoacana and the Knights Templar took over the extortion of growers, who had found in avocado cultivation sufficient reason to stay in Mexico and not emigrate as undocumented immigrants to the northern neighbor of Mexico, as thousands of Michoacanos do. There have been numerous reports corroborating this situation. The Knights have stolen land with entire plantations and killed families who didn’t want to pay the fee—or for other related reasons. The narcos have intervened to raise the prices —in dollars— of avocados. In addition to charging the producer a fee for the land they work, they are said to keep a dollar for each avocado sold.

In other words, Mexican drug gangs have been heavily involved in Mexico’s avocado trade for around 15 years, but it’s only now that the U.S. government has decided to take action against it. So, what gives?

According to some reports, one of the reasons for the abrupt change of policy is that the Knights Templar are growing increasingly sophisticated in their use of violence, using trenches, pillboxes, homemade armored cars, rocket-propelled grenades and drones modified to drop small bombs. In the last month an army vehicle was disabled by an IED planted on a road, injuring a number of soldiers. It was the first known successful use of IEDs against a military target in Mexico.

Another Possible Reason: U.S. Commercial Interests

But there could be another reason why this is happening right now: to counter Mexico’s President Andres Manuel Lopez Obrador’s proposed energy reforms, including his plan to  nationalize Mexico’s reserves of lithium, a vital mineral for the green energy transition the world is supposed to be moving through in the coming years. As I reported last week, Mexico is one of an increasing number of governments in Latin America, including Chile, Brazil and Peru, that are considering taking greater control of their natural resources as their value surges on global markets.

Just a month ago, the U.S. Senate’s Committee on Foreign Relations called on the Biden Administration to “act with force” against AMLO’s plans to favor State energy companies while excluding from Mexico’s energy sector private companies that are committed to renewable sources. Shutting down one of Mexico’s most important and fastest growing export sectors is certainly a forceful way of doing that. And as readers of this site well know, Washington has a long, storied history of using trade as a diplomatic weapon.

AMLO himself has blamed USDA’s decision to ban imports of Michoacan avocado on local U.S. growers wanting to compete with Mexican products, as well as political factors though he hasn’t actually divulged what those factors are.

“In all of this there are also a lot of political interests and… there is competition; they don’t want Mexican avocados to get into the United States, right, because it would dominate in the United States because of its quality,” López Obrador said. “There are other countries that are interested in selling avocados, as in the case of other farm products, so they lobby, they look for senators, professional public (relations) people and agencies, to put up obstacles.”

Big Scandal for AMLO, Partly Paid for by USAID

Washington’s ban on avocado imports from Mexico also coincides with the eruption of a scandal involving AMLO’s two sons and their ties to the U.S. oil field service company Baker Hughes, which has juicy contracts with Mexico’s state-owned oil giant Pemex. It is the biggest corruption scandal AMLO has faced and it was first broken by the organization Mexicans Against Corruption and Impunity, which as I previously reported receives some of its funding from the US Agency for International Development (USAID), an offshoot of the U.S. State Department with a long history of financing opposition groups in Latin America.

It is impossible to know to what extent, if any, Washington’s import ban on Mexican avocados is being driven by its own commercial interests. Even AMLO is not spilling the beans, if indeed there are any to spill. For the moment, it is all just one big fat coincidence. But the damage to Michoacan’s economy is increasing by the day.

As I have previously pointed out, the biggest obstacle AMLO faces in trying to rebalance Mexico’s economic model, by, say, nationalizing lithium, promoting domestic, non-GMO production of staple crops such as corn or prioritizing Mexico’s crude oil for the domestic market, is that it threatens the commercial interests of its number one trading partner. And Mexico’s economy is totally dependent on the deeply unbalanced trading relationship it has with the US, which buys up more than 80% of all its exports while also providing Mexico with a large share of its staple foods, thanks, of course, to NAFTA.

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  1. SET

    This is not in depth, but details some of the head choppings and murders being done by the gangs, to control the trade. a link from NC yesterday, along with a Grub Street article on how this will hit NYC restaurants. The dear old USA can’t hope to supply the nation. Does Biden really want to piss off restaurant owners and the Latino electorate, this close to the midterms? Team Dem is already in trouble! This sounds nuts, but if Biden wanted to be popular with the left and the right, he should help AMLO hire Erik Prince’s Blackwater, Xe, or whatever they’re called now, to wipe out these gangs as an anti-terrorist operation.

    1. ambrit

      As America’s long standing strategy of promoting and backing oligarchial authoritarians shows, the last thing America really wants in Mexico is a strong, competent populist government.
      Back in the Mexican Civil War around 1910, the real Left had a chance with the Brothers Magon and others. American Wobblies, mainly from, I believe, California went South to fight for the Mexican Left. The American government put one Magon brother in jail and actively impeded the Wobblies’ efforts.
      The chaos induced by the Cartels is actually good for American Oligarchs. While the patriotic Mexican elites fight the Cartels, the American business interests sneak in and do some “primitive accumulation” of Mexican resources, with the assistance of Vichy Mexican Elites. Divide and rule at a distance.
      Why else do you think that so many working class Mexicans come to live up North. Because they like the beer? No, They do so because life at home has become dangerous and ‘uncivilized.’
      The biggest thing America could do to help Mexico stem the violence and social disruption caused by the Cartels is to remove their main motivation; the profits from the drugs trade. Legalize “illicit” drugs in America and watch what happens Down South.

      1. Michael Ismoe

        Marijuana was legalized in the USA. It was the cartels’ major cash crop. Since legalization, the cartels have moved to meth and fentanyl. Unintended consequences.

  2. The Rev Kev

    When I heard about this avocado ban right before the Super Bowl when so many of them get processed into a giant Supper Bowl, my first thought too was that this was Biden firing a shot across the bow of Mexico if it dares take back control of their resources. Thing is, if Mexico wants to avoid a second Mexican Revolution down the track, they have no choice but to keep more of the profits in Mexico instead of the bank accounts of some multinationals elsewhere. But is it wise for the US to have 70 American inspectors in Mexico itself? And for nothing more important than avocados? Those drug gangs, I bet, are wondering if any of them are actually serving the DEA so why put them in such a hazardous situation?

    1. lordkoos

      I’m not sure why the US couldn’t place those inspectors in the USA near the Mexican border as an alternative. They wouldn’t be able to inspect the trees but they could still check the produce shipments. This does smell funny to me and if I had to bet, I wager that this is related to Mexico’s lithium policy.

    2. drumlin woodchuckles

      I think Michael Ismoe’s comment just below could be very helpful here. I see no reason for America to play along with the Crime Cartels diverting profit from the actual avocado producers to themselves in return for no benefit to anyone else but the Crime Cartels.

      If inspectors are at the border, all they get to inspect will be cleverly faked paper receipts and stuff, which would be no more reliable than electronically recorded votes in elections. They want to be there because they want to actually see whether these avocadoes are benefiting Mexican humans or Cartel lampreys. And the Cartel lampreys don’t want to be seen and pulled off the Avocado lake trout.

      I heard AMLO’s disgusting diversionary hasbara about how this was about “stopping competition”. It makes me wonder if AMLO is a secret Cartel sympathiser or even a secret Cartel agent. His statement of contempt for Mexican journalists and his indifference to their rolling serial assassinations also makes me wonder if he is a Cartel secret agent.

      As to “competition” from alien avocados, NAFTA should be abolished, all three countries should re-protectionise their agriculture, and alien avocados should be banned from entering America, whether from Mexico, the Caribbean, Israel, or wherever. The American avocado market should belong solely and only to the American avocado grower.

      1. Nick Corbishley Post author

        “If inspectors are at the border, all they get to inspect will be cleverly faked paper receipts and stuff, which would be no more reliable than electronically recorded votes in elections. They want to be there because they want to actually see whether these avocadoes are benefiting Mexican humans or Cartel lampreys. And the Cartel lampreys don’t want to be seen and pulled off the Avocado lake trout.”

        As far as I’m aware, the inspectors are not on the ground in Michoacan to check whether the avocado production is benefiting local farmers or drug traffickers. They are there to make sure the quality of the production lives up to US standards and that there’s no risk of contamination of US avocado crops, as ABC reports:

        In fact, the U.S. grows about half the avocados it consumes and to protect domestic orchards from pests, inspects imported avocados — nearly 90% of which came from Mexico in recent years.

        It was only in 1997 that the U.S. lifted a ban on Mexican avocados that had been in place since 1914 to prevent a range of weevils, scabs and pests from entering U.S. orchards.

        The inspectors work for the U.S. Department of Agriculture’s Animal and Plant Health Inspection Services

        1. drumlin woodchuckles

          If that is the reason, then does it really matter where the avocadoes are inspected? I would suppose when/where the avocadoes are still growing, one could inspect the plants, the fruits still on the trees, etc. After they have all been boxed, crated, packed and stacked into trucks and traincars and stuff, it is much harder to take them all apart, unpack them, and inspect each avocado by hand at that point.

          That is the only plausible reason I could think of for wanting to inspect them where they are grown instead of already packed up on the trucks and trains. I know from reading that a lot of other crops are inspected in the field at the still-growing stage. Would it be the same with avocadoes?

          1. drumlin woodchuckles

            And now that I think about it, why would the Crime Cartels care if there are American inspectors on scene looking at the avocado quality and infestation/no infestation rates? Why do they care? Unless this is now “their” business and the avocado workers are now their “slaves” and they are laundering dirty avocados into the American market and then into wherever else Mexican avocados go.

            If the Cartelers already have that level of “investment” and “interest” in the avocado orchards, then I can see why they wouldn’t want an American inspector or any other inspector on scene snooping around.

            And if AMLO knows it, then he is strictly a friend and supporter of the Cartels if he wants to keep their Slavery Avocadoes reaching the American market. Is that what he wants?

            Just because someone is anti-American does not automatically make him/her an upholder of Truth, Justice and the AntiAmerican Way.

            And given the Cartels’s cavalier, almost “Chinese”, attitude to basic chemical safety or any other safety, one has to wonder if Mexican avocadoes or avocado product are even safe to consume. Maybe they are. I think I will let others be part of the experimental population while I remain within the control population on that one.

  3. Wukchumni

    Regarding ‘green gold’…

    It’s a worst case scenario, for avocados* will soon be priced per troy ounce.

    *FD: Grocery Outlet had 2 pound bags of frozen guacamole last month for $5.99 and I bought a few. I think I can outlast the lack of guacamole, but might have to resort to Herdez bottled guacamole salsa-which isn’t bad

  4. Michael Ismoe

    “This is apparently not the first time Mexican drug gangs have threatened USDA inspectors. In 2019, members of a criminal organization threatened a USDA team of inspectors in Ziracuaretiro in Michoacan and stole the car they were travelling in. The U.S. agency then wrote a letter warning that if there was another threat to their inspectors in Michoacan, they would suspend the avocado program. Which is exactly what has happened.”

    Sometimes it’s just this simple.

  5. David in Santa Cruz

    Mexico is an independent country?

    But seriously, why would this administration jack-up avocado prices at a time when food-price inflation is driving voters away from Team Dem in droves — unless there was more to the story than the usual threats and extortion that are a way of life in the Great State of Michoacan?

    The U.S. government under Orange Foolius amped-up the demonization of Mexico and its citizens, culminating in the October 2020 arrest at L.A. International Airport of Gen. Salvador Cienfuegos, retired chief of the Mexican Army. The general was held in jail for nearly a month, until “diplomatic pressure” forced the administration to drop charges on the promise that the Mexican Justice Department would prosecute. Gen. Cienfuegos was released the minute he stepped off the plane and the investigation dropped with a formal statement of exoneration.

    The Russian Federation has sent tens of millions of doses of the Sputnik Covid vaccine to Mexico and Sputnik has been produced in Mexico since May of last year. Has AMLO decided to become a player in the 21st century version of “The Great Game?” Only time will tell.

  6. Susan the other

    Lots of stuff happening in Mexico lately. AMLO prioritizing Pemex for Mexicans; offering sanctuary to Morales and Maduro; being accused of corruption because his 2 sons work for an American oil rigger (seems Mexico might need some foreign expertise to reallocate Pemex oil domestically so why the defamation? – especially since it is brought to us by USAID which is ominous for AMLO himself); going non-gmo corn; losing Citibank’s (Banamex?) branch recently, abruptly; interesting about Sputnik vaccine as well. But the most striking information is that Michoacan is the only area in Mexico with USDA inspectors and there are 70 of them driving around down there. That seems like a lot. The fact that Michoacan also has opium fields is too coincidental, no? And the Port of Lazaro Cardenas would be a definite point of interest for any would-be lurking American opium enthusiasts, especially if they just had a falling-out with Cienfuegos – that whole incident is telling by its lack of publicity. I’d think the US drug trade is under severe stress for “new product” since quitting Afghanistan. The US drug trade is worth much more than a steady supply of delicious avocados – but the avocados just happen to be in Michoacan.

    1. Susan the other

      So, I’d just like to add this: The most rational and humane solution to the “opiod crisis” is an understanding of the need (especially now) for mood enhancers. But certainly since time began. Opium is a wonderful item. I always get into deep shit with the church lady when I say it should be legalized – but I’m convinced it is the best thing we can do. Legalize it, standardize it, tax it and sell it over the counter. Eliminate the racketeering. The Racketeering is the most harmful thing. I’m very appreciative of drugs that make you just feel amazingly good. I’d almost be willing to get seriously sick and need surgery regularly just for a shot of versed. Why not give ourselves the luxury of that relief on an as-needed basis? We could produce highly refined and almost non-toxic elixir of opium that would make every human on the planet a life-loving star-gazer. But no. We’d rather create a craven underground economy to pay for black ops and elite parties. The solution? Legalize opium. Eradicate fentanyl. It’s fentanyl that is the awful toxin here. By design probably. And of course the underlying reason is that it is so very profitable. Once again. Something we never even discuss.

      1. drumlin woodchuckles

        Well , writing a comment in a blog-thread is a first step towards getting it discussed. The next step is catapulting the discussion beyond the blogosphere to wider extrabloggal circles.

    1. drumlin woodchuckles

      How much of the farming is being conducted outright “for” the Crime Cartels? On nature reserve and national park land illegaly cleared and turned into avocado plantations worked for the Cartels by unwilling slaves?

      And if any avocadoes from Mexico are Cartel Slavery avocadoes, how is anyone to till which are “slave” avocadoes and which are “legit” avocadoes? Does the Mexican avocado sector become a cover for laundering Cartel Slavery avocadoes?

  7. Expat2uruguay

    The Jacobin show interviews John Nichols about his new book covid criminals and pandemic profiteers. The interview also includes a New York nurse, and the show description matches a lot of what I’ve read here in the comments. I apologize for this horrible looking link, I don’t know how to make it better.

  8. Lambert Strether

    > more than 70 US inspectors who work in Mexican fields

    Seems like inspectors on the ground would be a requirement for real Supply Chain Transparency (NGOs and self-certification being weak substitutes).

    Of course, the most transparent links in the supply chain are the ones that aren’t there (i.e., autarchy. It seems to me that the United States needs Mexican avocados in the same way that the rest of the world needs California almonds: Not at all. I would imagine that the no doubt horridly monocropped land could be used for better purposes, too, as well as the water). And I say this as a foodie who knows the origins of globe-spanning plants like hot peppers, potatoes, apples, etc.

  9. tindrum

    “when millions of Americans sit down for their time-honored bowl of Guacamole and watch the Avocados from Mexico commercial”
    Sorry, but really? This is a thing?

    1. drumlin woodchuckles

      Americans may have to get creative with alternatives to guacamole. They ( we) may have to invent . . .
      carrotmole, turnipmole, beetmole, rutabagamole, parsnipmole, potatomole, etc. It will be good for the evolution of American cuisine.

  10. drumlin woodchuckles

    On BBC last night I heard a news story about how the MexiCrime Cartels have quite some time ago established themselves as the takeover-masters of the Michoacan lime growing economy. So I looked for a couple of links about that.

    This subject of the complete Crime Cartel Conquest of Mexico, sector by sector, is worth a longer comment and when I get back from have-to-go-somewhere, I might try to write one. Hopefully others do so as well.

    For now I would just say that I am coming to view Mexico as a genuine country on a genuine territory, with a Crime Cartel oppression layer spreading over the whole country and covering it like the Great Glacier covered Mid-to-Upper North America during the Ice Age. The question would be, then, to put it in non-inflammatory language, how to melt off the ” Ice Cap” and delete the Cartel leadership, cadre-ship, and political-military-diplomatic class “hidden masters and supporters” of the Cartels in Mexico from physical existence.

    Again, with minimally inflammatory language, might I suggest that the Stalin approach is the proper approach in this case. ” If a group of organizations is giving you problems, eliminate the group of organizations to eliminate the problems. No group of organizations, no problem” But who will rid Mexico of this troublesome group of organizations? The solution would have to come from the ” genuine Mexican nation” buried under the Cartel “Ice Cap”. From my purely layman’s perspective from outside the country, I suspect the only effective approach would be strict eliminationism, strictly applied.

    1. drumlin woodchuckles

      ” Strict Eliminationism” would probably require the Genuine Mexican Nation winning a Civil War against the Spanish Settler Elite and its Spanish-identified cultural-mestizo running dog lackeys, flunkies and stooges, and then using the power of that Reconquest to set up a network of “Elimination facilities” to ” physically eliminate” all of the several millions of Cartel-connected and Cartel-sympathetic and Cartel-sheltering-and-protecting cadres and personnel and political and military and judicial leaders and officials within the physical borders of Mexico. For such approach to totally and utterly succeed, Self-Liberated Mexico would need all the Central American states and all the United States to support the Cartel elimination policy by stopping and physically deleting every Cartel cadre and supporter who tried crossing the border and making false claims of asylum.

      It might even require the sending of Sandinista-style problem-solver teams to go to foreign countries where pro-corruptionists shelter in exile, like Carlos Salinas de Gortari in Ireland; and give them the same treatment that a Sandinista problem-solver team gave to Somoza in Paraguay.

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