Tue March 25, 2014
No More Cheap Margaritas? Why Lime Prices Are On the Rise
These days restaurants are spending obscene amounts of money on limes. Think about what that means for Mexican food alone: limes are used in practically everything, from margaritas to ceviche to guacamole.
Last week, the rising price of limes became personal for this reporter.
I stopped by La Moreliana, a small eatery in southeast Austin that serves up authentic tacos. The food was great – but the tacos were missing the citrusy, acidic bite only lime juice can add.
It turns out La Moreliana recently stopped garnishing its tacos with limes. "They’re too expensive," said the server Araceli. "My boss jokes the limes are more expensive now than the tacos themselves."
Even Fonda San Miguel – one of the fanciest Mexican restaurants in Austin – is hurting with the price increase. Fonda San Miguel general manager Danny Herrera buys limes by the case. He goes through at least one case of 100 limes a day.
Herrera says in November he was buying cases for about $14 each. Then they went up to $20. Now, "as of last week, [each case] was up to 99 dollars."
So why has the price skyrocketed? The answers are international.
I contacted some lime producers in Michoacan, Mexico, where many of the limes we consume in Texas come from. Michoacan is the state that’s now plagued with turmoil between the drug cartels and the citizen-led militias – and that unrest is part of the story.
Carlos, a lime producer who fears talking about the cartels could jeopardize his safety, says his family has grown limes for generations. He’s heard people complain about the current prices, but Carlos says they've pretty much held steady for a long time.
At the time we talked, Carlos didn’t know that restaurants in Austin are paying around $100 dollars for each lime case. "That’s a gross exaggeration [in the price]," he said. Carlos has been selling his limes for about 75 cents per pound.
Other lime producers told me growers in Michoacan often burn their crops, instead of being paid a pittance by the cartels. But Carlos didn't want to talk that. Instead, he said the increase in price might have something to do with recent floods that have destroyed the crops of neighboring states. There’s also been a series of crop plagues that have cut Mexican citrus production in half.
Dr. Eric P. Thor with Arizona State University's Agribusiness School says besides floods, plagues and cartel pressure, a more global phenomenon is also influencing the price of produce: millions more people are now demanding limes while fewer limes are being produced.
"It’s very simple," Thor says. "As the world population expands and supply chains become longer and more complex, we find ourselves in a position where [the place] where [produce] is produced and where it’s consumed is changing very rapidly."
Thor notes that high demand from China is increasing the price of everything, from cherries to limes.
So here in the heart of Texas, why are we paying for what consumers in China want? Thor says that basically, it’s because we’re still willing to pay for it. He also believes "prices will come down, eventually." But the days of cheap happy hour margaritas may be short-lived.