When the price of a commodity like limes goes sour, local businesses say they just have to eat it.
A lime shortage across the U.S. has pushed up prices for the green citrus fruit so often paired with summertime alcoholic beverages. Nationally, a case of 200 limes fetches between $80 and $130, up from about $15 last year.
John Antonucci Sr., the owner of Antonucci’s Wholesale Produce & Seafood in Gloversville, said the price of limes is the highest he’s seen in over 30 years in the wholesale produce business. He said a case of 48 limes cost Antonucci’s about $35, up from as low as $5.
“I’ve never seen limes this high,” he said.
Antonucci’s has responded to the price spike, which started in March, by keeping the company’s inventory of limes tight, ordering only enough to fill expected orders.
“We have serious juice in the industry, even being in Gloversville here, we’re connected directly with a lime company, so we’ve never been short of limes, even while prices have escalated,” he said. “The price going up can slow down the demand a little bit, but our sales were not hindered at all. We’ve kept our inventories tight, so we’re basically right out of limes when the next shipment comes.”
Antonucci said some larger food wholesalers make more money when the price of a food commodity spikes, because they take a percentage of the total price of the product, while his company takes the same mark-up on any produce without respect to its underlying price.
“We make less money [during a price spike like this] because we don’t run on percentage,” he said. “When limes cost $5 a case, we’re making $3 a case, and when they’re $35, we’re making $3 a case.”
Reasons for the spike
The cause of the lime price spike is an almost perfect storm of circumstances from citrus disease that struck Florida in 2001 and wiped out most lime groves to flooding to the efforts of drug cartels to disrupt supplies in Mexico, the biggest U.S. supplier.
Limes don’t really grow well enough in most of the U.S. to be produced commercially, says Jonathan Crane, a tropical fruit crop specialist at the University of Florida’s horticultural sciences department.
Until 2001, Crane said, Florida produced half of all the limes consumed in the United States. But then a devastating citrus canker outbreak led officials to order almost all of Florida’s lime groves destroyed and the industry never recovered.
Mexico began producing more than 90 percent of the limes now consumed in the United States.
In most of California, the weather isn’t warm or humid enough to produce commercial quality limes, and the state has only a few hundred acres in production near the Mexican border.
Mexico’s crop, meanwhile, was hit by a myriad of problems this year, including unusually heavy rains and citrus disease in some areas. The Knights Templar drug cartel used to jack up lime prices by disrupting deliveries and shaking down farmers in western Michoacan state, but that problem has declined in importance following an offensive this year by federal forces and vigilantes who took up arms against the cartel.
Like American mobsters, the drug cartel that controls much of the Mexican state of Michoacan where both limes and marijuana grow in abundance, has been muscling in on legitimate businesses.
A Mexican official told The Associated Press last month the cartel extorts as much as $1.4 million a week from legitimate businesses, mainly lime and avocado growers. In some instances, he said, the cartel is now running some of the state’s wholesale lime distribution centers where prices are set.
Last winter’s storms, which triggered major floods across western Mexico, also destroyed crops, and a plant disease that struck the Mexican state of Colima damaged still more.
The result, the price of limes has shot up dramatically in both Mexico and the U.S. Restaurants in Seattle and New York have reported paying as much as $130 a case for them.
Impact to bar
The cost might not seem like that big of a deal until one realizes that it’s lime juice that’s squeezed into every margarita, mojito or mai tai. It’s also lime that’s chopped up and mixed with fresh fish to create ceviche. It’s lime, mixed with avocado, that makes up guacamole – a mainstay at every Mexican restaurant.
Aaron Brooks, who operates Aaron’s Irish Pub in Gloversville, said he and his staff made sure to get enough limes for the Cinco De Mayo bar crowd, despite the cost increase, because he believes his customers expect limes to be available for their drinks.
“The cost is through the roof. If you go to a supermarket the limes are very small and they are very expensive right now,” he said. “It cuts into the profits of the business, but you can’t justify raising the price of fruit to the customer, because you’ll lose a customer that way.”
So far, the price spike doesn’t seem to have been passed on widely to consumers, according to industry officials.
Josh Rhodes the owner of the Railyard in Gloversville, said he doesn’t buy enough limes for the price increase to have hurt his business. He said when something customers are used to receiving for free goes up in price, businesses usually have to take the hit.
“You just have to eat it. You can’t charge for something like that; it would be like charging for a napkin,” he said. “But when everybody around here figures in what a beer should cost, about $3.50, that price is going to figure in the price of an eighth of a slice of a lime.”
Some businesses have stopped using limes altogether.
Alaska Airlines stopped putting limes in in-flight beverages a couple of weeks ago.
At a recent luncheon meeting of the California Restaurant Association’s board of directors, association spokeswoman Angie Pappas said limes were noticeably absent from the buffet bar, which featured Mexican food.
Luigi Lanzi, whose family operates four restaurants in Fulton County, said he buya limes by the case, but he’s going to stop if the prices don’t drop.
“They went crazy, so we’ll start using lemons or an orange. Oranges are good because you can put them in a Blue Moon. It’s just stuff to camouflage beer,” he said. “When things go crazy like that, I’ll usually stop ordering them. If you’re using them and the demand is there, the price never comes down, but when you stop, you’re helping to bring it down.”
The Associated Press contributed to this story.