Ryan Kruger and Mike Catalano

The Super Bowl will be played in Florida on Sunday, and among other indulgences Americans will celebrate by slicing approximately 50 million pounds of avocados. Fans of the game of capitalism and free trade will celebrate three days early. As of February 1st Mexican avocados can be imported into Florida for the first time in 94 years, just in time for kickoff.

The remarkable story of this fruit most likely began in central Mexico around 500 B.C. Archaeologists in Peru found domesticated avocado seeds buried with Incan mummies dating back to 750 B.C. Originally believed to be a sexual stimulant, Aztec families would lock up their virgin daughters during harvesting season and they were not allowed outside.

For the past century, the avocado has been on the center of the table of a historic struggle between protection and free trade, between the United States and Mexico, in a fight that should have ended long ago. The fact that it raged on so long offers clues to our future (I fear) as we struggle to leave the past and refuse to obey a simple law of economics. As a money manager, I believe there is a bumper crop of trades nearby, but as you’ll see – I have a severe bias which I will disclose below.

Seeds of Discontent

According to several records, in 1871, Judge R.B. Ord of Santa Barbara secured a number of avocado trees from Mexico and successfully transplanted them, starting the first commercial production of avocados in California.

Around the turn of the century it is said that Carl Schmidt was sent from California to Atlixco, Mexico in search of avocado varieties of the highest quality. He found what he was looking for, and smuggled several seeds back home where he planted them.

In 1913, a great freeze struck California farmers. Few avocado trees survived, including the trees Schmidt brought back from Mexico. It is reported that there was one exception, the surviving variety was called “Fuerte” - Spanish for vigorous and came from Schmidt’s seeds taken from Mexico which provided California a tree that could survive the local climate and an industry was born.

Fruit Flies and Cute Lies

In 1914 the U.S. banned all avocado imports from Mexico, claiming a fruit fly was a risk to California crops. Just a hunch, but I’m guessing the real risk was better avocados at lower prices. It has been alleged that the only place this strain of fly did any damage was in a laboratory.

Ryan Kruger and Mike Catalano

Ryan Krueger is a money manager and co-founder of Krueger & Catalano Capital Partners, LLC in Houston, Texas. Krueger writes daily for Minyanville.com, where he is a featured market columnist. Krueger & Catalano host a radio show for a Salem Communications’ station in Texas (1070 AM KNTH), and a podcast series called “The Other Side” that can be found at www.kcotherside.com.

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