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Lime Shortage



Limes are usually cheap, and that is the reason they are used formany purposes from drinks in the bar to plates in restaurants. However, that is not the case at the moment. Limes are now being usedonly on demand by the clients or in foods and drinks that require theuse of limes. A shortage in the supply of limes has caused the marketprices to shoot up. In the case of Joe Zuber, who owns a Mexicanrestaurant, a package of 175 limes would go for $50 to $75 in normalcircumstances. Now, he spent $109 for the same package afterbargaining from the quoted price of $175. A dry spell and freezingweather have paralyzed production, resulting in a scarcity of limesand fresh farm products. These increased costs show how freshagricultural commodities are predisposed to substantial variations inprices as they cannot be stored for long periods. They are requiredto be sold as soon as they are harvested because they are perishable.Therefore, when a shortage hits the markets, the prices are absurd.Prices are forecasted to shoot as a dry spell in California is set toaffect the market prices of fresh produce. The U.S Department ofAgriculture Economic Research Service speculates that the prices offruits and vegetables will rise between 3.5 percent and 4.5 percentnationwide.

Thepoor weather and climatic conditions caused a scarcity in the supplyof limes which subsequently caused prices to rise, and quantity oflimes sold decreased. The shortage resulted in the demand for limesto outnumber the supply. Another reason for the price increment isthat whenever amount demanded is more than the quantity supplied, theprices will shoot as suppliers want to make more profit out of thesituation. The equilibrium price is the point on the demand andsupply curve where supply and demand intersect (R. Glenn Hubbard,2014). The decrease in supply caused an upward shift in the balance,which means that the point of intersection of the rises as the supplycurve shifts to the left due to the shortage in supply of limes.

If thedemand for the lime stayed the same as the supply decreased, theequilibrium quantity falls, and the equilibrium prices rise (R. GlennHubbard, 2014). It is the case of the lime market as only the amountof supply was affected by the weather while the demand remained thesame. Many restaurants and bars reduced the use of lime by ensuringthey only offered it when requested upon by the customers. As the useof lime decreased, it would subsequently lead to a decline in demandfor the same given the forecast by the Department of AgricultureEconomic Research Service. If the demand eventually drops, the pointwhere the quantity supplied and quantity demanded intersect willfall. This fall will lower the equilibrium price which means theprices of lime will go down.

Forthe country to counter the effects of increased prices due to thelime shortage, a proper plan has to be effected. Besides the effortsmade by restaurants and bars to minimize the use of limes in theirpreparations, all individuals should do the same. They shouldreconsider the use of lime so as to curb the shortage. Thisconsideration will reduce the quantity of demand hence causing areasonable fall in prices regardless of the current deficit. Anotherway to help counter the scarcity is for the consumers to employ theuse of substitute products like the other fruits in the citrusfamily. By doing this, the demand of lime will drop dramatically. Itwill consequently shift the equilibrium price to a lower point thanit is currently.


R. Glenn Hubbard, A. M. (2014). Macroeconomics. Chicago: Pearson Australia.

The Article

Lime shortage puts squeezeon businesses

NicholeDobo, The (Wilmington, Del.) News Journal 1:36 p.m. EDT May 3, 2014

(Photo: Jennifer Corbett, The (Wilmington, Del.) News Journal)

WILMINGTON, Del. — In 30 years of managing restaurants, Joe Zuberhas never given so much time and attention to bargain shopping forlimes.

&quotLimes typically are cheap,&quot said Zuber, who owns Dos LocosFajita &ampStonegrill Mexican Restaurant in Rehoboth Beach.

The wedges of green used to be tossed on plates and smashed on theside of glasses with little thought, but many businesses havereconsidered how they use the fruit in recent weeks. Droughts andcold weather have crippled production, creating a shortage of limesand other fresh produce.

A case of 175 of the green citrus fruit typically would cost Zuber$50 to $75. Last week he was quoted a price of $175. He was relievedto get a case at $109 this week.

&quotWhich is still absolutely crazy, and it`s not like they areeven high-quality limes,&quot Zuber said. &quotYou get what youget. They are much smaller.&quot

Zuber has limited the fruit to those who request it. But it`s not anitem the restaurant can forgo. On a normal weekend, Zuber plans fortwo to four cases of limes. This weekend, leading up to Cinco deMayo, he stocked six.

To help save the limes for businesses that need them, the city ofWilmington`s Cinco de Mayo celebration does not plan to use a lot ofthem. They are hopeful the frozen margaritas they offer will have thezing of lime without the addition of a fresh slice of fruit.

But, said Ken Briscoe, the city`s director of cultural affairs,&quotCinco de Mayo is nothing without limes, and margaritas arenothing without limes.&quot

A touchy market

The high cost of limes serves as an example of how fresh produce is acommodity that is especially susceptible to dramatic price changes. Acold winter in Florida harmed citrus production, and droughtconditions in California have further exasperated the problem.

&quotIt`s really a function of supply and demand,&quot said Ed Kee,Delaware`s secretary of agriculture.

When weather harms production, there`s not a fast way to make more,so prices run high. When the market is flooded with the product, theprice is low, so it moves off the shelf before it spoils. Unlike cornor wheat, fresh produce can`t be stored for future use, which wouldsmooth spikes in price.

&quotThey are all perishable commodities, so there is a tremendouspressure to sell them as soon as possible,&quot Kee said.

And as prices go up, businesses like restaurants need to find ways toadapt. That means raising prices or changing what is offered.

When Jose Garcilazo picked up a bag of limes on Friday, it was lessthan he might typically buy. At Garcilazo`s Mexican restaurant,Healthy Organic Planet, limes are now an on-demand item, rather thanan automatic, for many dishes and drinks.

&quotIt is how I can keep low prices for my customer,&quot he said.

At Klondike Kate`s in Newark, limes remain on drinks that require alime – such as a gin and tonic – but they are not being used onevery rum and coke.

A high-end garnish

A grocer in the Hockessin area was selling them three for $5. At theNewark Farmers Market, which used to sell them five or six for $1,the fruit is now priced at two for $1. In other words, a guest who isserved a drink with a lime should thank the host for her generosity.

Nationally, the cost of all fresh fruits and vegetables is expectedto increase between 3.5 percent and 4.5 percent, according to aforecast released last month by the U.S. Department of AgricultureEconomic Research Service. A drought in California is expected tohave such a big impact on prices of many items, including milk, thatthe federal agriculture department has devoted a section of itswebsite to the issue.

In Delaware, it`s not all bad new

s. Although there was some fear that cold nights harmed blooms onpeach and apple trees, they appear to have made it through undamaged.

&quotI think we can look forward to a decent peach and apple crop,&quotKee said.