A short-run analysis of the impact of imports of Hass avocados from Mexico on the U.S. avocado industry

Abstract Using data from November 2011 to March 2022, we estimate a vector autoregression model to examine the relationship among Mexican Hass avocado imports, prices received, and volumes of Californian Hass avocados packed by California packers/handlers. We trace the impacts of changes in Mexican imports over a 12-month time horizon. A 1% increase in Mexican imports today leads to increases in pack prices of 0.21% and to decreases in pack volumes of 0.29% on average five months to twelve months later. The cumulative impact of a 1% increase in Mexican imports results in a 1.71% increase in pack prices and a 2.31% decrease in monthly pack volumes, translating to a 0.64% decline in monthly revenue accruing to California packers/handlers. Consequently, the modest rise in pack prices coupled with the modest shrinkage of volumes of Californian Hass avocados packed and the modest loss in revenue accruing to California packers/handlers suggest on the surface that Hass avocado imports from Mexico in the short run do not “seriously injure” the U.S. avocado industry. These findings also suggest that future U.S. avocado grower appeals for relief against imports from Mexico are not likely be upheld by the U.S. International Trade Commission. Our results are short term only and these effects, compounded over time, potentially may become injurious to producers and packers in California.