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cbviajero

Jul 16, 2011, 12:23 PM

Post #1 of 22 (1874 views)

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familia michoacana and the price of avocados

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I live in GDL, recently there has been a significant increase in the price of avocados up to 75 pesos a kilo in soriana and 60 pesos in the tianguis in my colonia.I asked the avocado guy I have been buying from for years what the deal was he told me that the growers in michoacan were being extorted and threatened by the familia michoacana and that many had abandoned their orchards or raised their prices to compensate,this might be pure conjecture on the part of the avocado seller but if i'ts true the government should really think about cracking down on these thugs,my wife misses her guacamole and so do I.
Chris

chinagringo

Jul 16, 2011, 1:05 PM

Post #2 of 22 (1858 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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Chris:

There have been numerous articles in both the Mexican Press and the NOB Press about the cartels collecting fees (extortion) on every truckload of various products. Your avocado seller wasn't jerking your chain!
Regards,
Neil
Albuquerque, NM

tonyburton

Jul 16, 2011, 1:07 PM

Post #3 of 22 (1854 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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Most likely it is true - see "The Price of Limes" in More impacts of Mexico's war against drug cartels

mazbook1

Jul 16, 2011, 1:35 PM

Post #4 of 22 (1847 views)

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Re: [tonyburton] familia michoacana and the price of avocados

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Good article, Tony, and surprisingly still (more than a year later) pretty accurate. I say surprisingly because your source usually blows things completely out of proportion.

One method of "washing" those drug funds was ignored, but in my opinion we are seeing more and more of the backlash from it. As with the Mafia in the U.S., the drug cartels also wash their illegal gains by "loan sharking". Many small businessmen in México have gone to this source for funds, as bank loans are so difficult here. Now, with the economy down, particularly the tourist economy, these small businessmen find themselves unable to repay the loans or even keep current on the interest due (known as the "vig" in the U.S.), so more and more of what is reported as "extortion" is just the loan sharks' "collectors" making those same small businessmen aware of who the boss truly is. At least that's the way it looks to me.

As an example: Here in Mazatlán a small, very well thought of and popular seafood restaurant suddenly, about 4 years ago, very suddenly expanded to 3 larger locations. Early this year, the bill came due (IMHO) and the one most popular (with locals, expats and some tourists) was thoroughly shot up after hours. The next day all three closed and the owner fled Mazatlán with his family. Now that most popular one has just reopened under completely new management/ownership (but not the other two) with everything right down to the silverware the same, yet they don't seem to be afraid of something similar happening to them…hmmmmmm!

(This post was edited by mazbook1 on Jul 16, 2011, 2:15 PM)

cbviajero

Jul 16, 2011, 2:09 PM

Post #5 of 22 (1833 views)

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Re: [tonyburton] familia michoacana and the price of avocados

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I also believe it's true and I remember my wife complaining about the price of limes a couple of months back.My post was somewhat tongue in cheek but not totally,can you imagine if they tried that with tortilla producers,the pueblo would rise up in arms and then you would see some action.I remember reading that when Porfirio Diaz was encouraging foreign investment the investers balked because of the lack of security ie:bandits,he solved that by giving rural policia funding and the go ahead to shoot bad guys on sight,result lot's of abuses but no more significant banditry.It's tough situation and I certainly don't have the answer,but I wish my wife,son and i could go back to exploring the backroads of Michoacan, Zacatecas,Jalisco etc like we use to without worrying about these beyond the pale bad guys.
Chris

whynotwrite

Jul 16, 2011, 2:37 PM

Post #6 of 22 (1821 views)

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Re: [tonyburton] familia michoacana and the price of avocados

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I am having a hard time with this whole "cartel is the reason" answer in a numbers sort of way.
Sticking with limes for the time being. The drivers are extorted say 800 pesos for a truck load of limes, how much is a truck load I ask my self. Well, a pick up truck load normally would be more than 800 kilos, especially in Mexico. But say it is 800 pesos for 800 kilos of limes, that is 1 peso per kilo increase. That can not be the reason for a 4 X increase of the cost of limes.
Thefts of fully-laden trucks increase 50%, lets say the total now is 70% of the truck loads of limes are stolen. What do they do with those thousands of kilos of limes? Why they sell them, of course. Do they sell them for 3 to 4 times the going rate? Of course not. The principal of buying hot (stolen) goods is the cheap price. Limes would need to be moved pretty fast to keep their value. Could the bad guys studied marketing and know they could demand more? Doubtful, and there is another truckload coming in 2 days with more stolen limes. I don´t see stolen lime trucks being the reason for a 4X increase in price.
That leaves production. 50% of the growers walk away, 50% of what is left is stolen. Now you are working toward a 4X increase in the cost of limes. But still you need to discount the stolen limes selling at a bargain. So maybe 75% of the growers quit and joined the cartels!
Or just amybe there are other factors beside the ever popular cartels that has caused the increase in costs. I saw none of that discussed or even considered.

cbviajero

Jul 16, 2011, 2:39 PM

Post #7 of 22 (1821 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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Before I get skewered let me just say that IMO P Diaz was a very very bad person and so were the foreign investers he was encouraging, but at least the trains ran on time well probably not, but there were trains.
Chris

cbviajero

Jul 16, 2011, 2:56 PM

Post #8 of 22 (1813 views)

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Re: [whynotwrite] familia michoacana and the price of avocados

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I honestly don't know why limes increased 8 fold in price while another citrus crop oranges remained virtually unchanged or why avocados went through the roof when the weather doesn't seem to have been a factor,I'm just relating something I heard from a long time avocado seller at my local tianguis.
Chris

tonyburton

Jul 16, 2011, 3:13 PM

Post #9 of 22 (1807 views)

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Re: [mazbook1] familia michoacana and the price of avocados

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Thanks! As you realize the blog post wasn't intended to be comprehensive, and there are indeed numerous other ways in which drug money is laundered, including hotels and bus companies. Your restaurant account struck a chord, since it brought back a memory of a similar series of events elsewhere in the 1980s - some things haven't changed!

(This post was edited by tonyburton on Sep 25, 2011, 5:15 PM)

playaboy

Jul 16, 2011, 3:14 PM

Post #10 of 22 (1802 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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I have a very close friend that lives between Los Reyes and Zamora. He has 1 hectare of avocados. He received a couple of phone calls telling him the cost he would pay to harvest the crop. He also got an "in person visit". They wanted so much money that he decided not to harvest anything. When he checked his orchard at harvest time he found that the whole crop was stolen. Luckily his family doesn't depend on farming for their income.

tonyburton

Jul 16, 2011, 3:27 PM

Post #11 of 22 (1802 views)

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Re: [whynotwrite] familia michoacana and the price of avocados

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I appreciate your mathematical analysis, and entirely agree that many other factors are in play in any situation like the cartel/limes one.
Even in normal times, the prices of fresh produce vary greatly, and not always in direct correlation to the weather or other obvious factors.
Perhaps, in the case of limes, and assuming that the lime "retailers" in Mexico City perceived the changes going on in their supply chain, the retailers decided to add on an extra protective "margin" to offset the risk that their supply was completely cut off?

Incidentally, FWIW, Mexico is one of the world's major exports of limes (and related lemons etc, but excluding oranges and other citrus). Total lime exports in 2010 were 1.857 million metric tons, worth 191.306 million dollars. Lime/lemon exports were up 52.5% in the first four months of 2011 (compared to same period in 2010). [all figures from Mex. gov. sources]
So... maybe they sent too many limes abroad and had too few left for the domestic market?

(This post was edited by tonyburton on Jul 16, 2011, 3:39 PM)

chinagringo

Jul 16, 2011, 3:42 PM

Post #12 of 22 (1790 views)

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Re: [whynotwrite] familia michoacana and the price of avocados

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Part of the problem with your math appears to be that you seem to be assuming that the farmer is selling direct to the seller. For the most part, distribution chains don't typically work that way as there are usually numerous levels in between. At each level the price increase to account for the extortion fees and begin compounding.
Regards,
Neil
Albuquerque, NM

whynotwrite

Jul 16, 2011, 5:04 PM

Post #13 of 22 (1768 views)

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Re: [chinagringo] familia michoacana and the price of avocados

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There are a number of things about my numbers that may not make sense. I thought of a couple errors I made, guess you did not catch them. The point that extortion is the cause of a 4x increase still does not add up. Even using your ideas it would be hard to come up with a 2X increase, in my mind.
The point is that it is far to easy to blame everything bad on cartel operations. In this case, and likely the avocados, there are other factors that need to be included such as exports, weather and inflation. To generalize the cartels are manipulating market prices is just plain wrong and a bad way to present Mexico. If you care.

esperanza

Jul 16, 2011, 6:00 PM

Post #14 of 22 (1751 views)

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Re: [whynotwrite] familia michoacana and the price of avocados

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Part of the price increase is normal. This is not the time of year when avocados are 'in season', although they are still harvested. Their price has always increased in the summer months.

However, this current price increase is ridiculous. At my neighborhood tianguis, the price yesterday was 70 pesos a kilo. I have no first-hand (or even second-hand) knowledge of the current situation around Uruapan, where avocados are grown, but the cartel extortion theory for the insane price increase certainly is plausible.

I wouldn't blame it all on La Familia Michoacana, either. There are other cárteles operating in Michoacán, too, including the Caballeros Templarios. Everybody wants a piece of the action, and there is plenty of action in Michoacán.

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richmx2

Jul 16, 2011, 6:19 PM

Post #15 of 22 (1744 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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The only problem I have with this theory is that I went broke working with some other people trying to swing a deal selling Michoacan avocados to European distributors. That was several years ago, and we accepted that there were "irregular fees" on trucks back then. The problem we ran into was that when the U.S. opened its market to Mexican avocados (which was closed for a time under the ridiculous pretext that it was to keep out Mediterranean Fruit Flies... which can´t survive at the altitudes where Michoacan avocados are raised), the way the rules were designed limited the exporters to a very select group, mostly connected with the California Avocado Growers Association.

Growers were locked into multi-year contracts and limited production. Their contracts should be expiring about now, which means, a lot of growers who would have been going out of business about now have, regardless of any threat from gangsters.

"The truth is seldom plain and never simple," as Oscar Wilde put it.

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http://voiceofmexico.com
http://editorialmazatlan.com

cbviajero

Jul 16, 2011, 6:35 PM

Post #16 of 22 (1735 views)

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Re: [whynotwrite] familia michoacana and the price of avocados

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I think playaboy's reply is right on the money,the growers feel threatened most of them have made plenty of money and can afford to let the fruit rot on the ground or be stolen until things get better.A neighbor and friend of mine who has a successful business in the mercado de abastos in GDL told me that avacado orchards in Michoacan are for sale cheap right now,any takers?
Chris

rockydog85251

Jul 17, 2011, 7:35 AM

Post #17 of 22 (1662 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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The Hass avacados around Colima and Comala have been in the $70 plus range. But Thurs. I purchased the smooth skinned kind -don't know what they are called.....for $25 per kg.!! They are just today ripe so will give them a try this afternoon.
Willie

jrpierce

Jul 17, 2011, 7:49 AM

Post #18 of 22 (1653 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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Whether or not the price of avocados (or limes) is directly or largely impacted by the cartels, I think it is a good reminder of the many ways, not always obvious, where corruption in Mexico adversely affects everyone. It is one more illustration of the importance of rooting the corruption out and ending it.

Jim

Bennie García

Jul 17, 2011, 8:41 AM

Post #19 of 22 (1633 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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In Reply To

The problem I have with that scenario, or better yet chisme, is that the cartels all invest heavily in legitimate businesses. Avocados are very lucrative. Why wouldn't they be snapping them up?

cbviajero

Jul 17, 2011, 10:35 AM

Post #20 of 22 (1608 views)

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Re: [Bennie García] familia michoacana and the price of avocados

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Sometimes the chisme can be more informative than the traditional news sources IMO.As to why the cartels aren't buying the orchards who knows,maybe they are in such dissaray they don't have the time to actually work the business,only extort from it.
Chris

Bennie García

Jul 17, 2011, 11:49 AM

Post #21 of 22 (1586 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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In Reply To

Sometimes the chisme can be more informative than the traditional news sources IMO.

Sometimes, I suppose. A broken clock is correct sometimes too. I've heard too many chismes throughout the years to put much stock in them. It shouldn't be hard to verify the veracity.

It has already been posted but there are many reasons for the record high prices. Once they start harvesting the new crop next month we shall see if the current prices reflect market realities, i.e. supply and demand or the anecdotal evidence of stories heard in the local tianguis.

playaboy

Jul 17, 2011, 3:35 PM

Post #22 of 22 (1548 views)

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Re: [cbviajero] familia michoacana and the price of avocados

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Actually, most of the growers around my friends land are small time orchards. They are 1-5 acres in size. They sell to the main packing house/distributor. These are not wealthy growers. It is the packing house/distributor that is the wealthy one.

My friend and a lot of his neighbors go to the USA for seasonal, non farming, work with visas in hand. The orchards were supplemental income and allowed them some of the nicer things in life. Now that has been taken away by the crooks.