Why are lime prices rising in the US ?

An article in the New York Times (March 30, 2014) titled “Is the Lime an Endangered Species” describes many reasons for the rise in lime prices in the US from $25 per 40 pound carton in February to over $100 in late March. Mexico supplies over 95% of US limes, but bad weather in Mexico cut exports to the US by 67%. A bacteria has infected key limes and dropped its yield by 33%. The resulted drop in supply and rise in prices has attracted drug dealers to hijack trucks carrying limes, thus requiring extra security and thus added costs. Are these factors expected to result in a rise in lime prices permanently or should this be expected to be a temporary effect ? Should the small volume grown by California (1% of US consumption) be expected to increase given these high prices ? Or will consumption, which increased from 0.5 lbs annually per capita in the late 70s to over 2.5 lbs currently, drop to solve the supply problem ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Supply Chain Issues and tagged , , , , , , , , , , . Bookmark the permalink.

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