A US ban on Mexican avocados could have a major impact on US fast-food chains

• The US banned avocados from the Mexican state that produces the bulk of imports to the US.
• Experts say that California producers cannot grow enough to keep up with demand.

Avocados are about to get much more expensive as the US limits imports from Mexico.

The US banned importation of avocados from Michoacán, Mexico, which exports about $3 billion of avocados annually, on Friday. The ban started because of a US safety inspector who received a threatening phone call, Bloomberg reported, although details are scarce. It will "remain in place for as long as necessary to ensure the appropriate actions are taken, to secure the safety of APHIS personnel working in Mexico," the Department of Agriculture told The New York Times, referring to the Animal and Plant Health Inspection Service.

Slowing the flow of avocados to the US is bad news for consumers, who are consuming record volumes of avocados and already paying more than 10% more than they were at this time last year.

About 80% of US avocados are imported from Mexico, so even a temporary ban could have wide-reaching affects, reducing availability and spiking prices. Fast-food chains that rely on avocados are adding yet another product to their lists of supply-chain woes.

Experts say California isn't able to produce enough avocados to meet demand. California supplier Eco Farms says wholesale clients are reaching out about securing their supplies, Bloomberg reported. Prices could increase as much as 25%, Eco Farms president Steve Taft said.

At Chipotle, guac is famously extra but beloved by many customers.

"We are working closely with our suppliers to navigate through this challenge. Our sourcing partners currently have several weeks of inventory available, so we'll continue to closely monitor the situation and adjust our plans accordingly," Jack Hartung, chief financial officer, told Insider.

Hartung previously commented on avocado prices during a fourth-quarter earnings call earlier in February, when he noted high avocado prices cut into the margins gained by raising prices. Hartung said that he didn't expect a supply-chain crisis around the fruit, because prices typically jump seasonally. Historically, avocado prices tend to increase in the first quarter, as Hartung previously warned in 2021.

Moe's, another Mexican fast casual chain, declined to comment.

Taco Bell says it is not hurt by the ban. "We import guacamole and not whole avocados, which is not impacted by the current ban," the chain told Insider in an email.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.