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Lime price surge has margarita drinkers seeing double

For margarita lovers, it's tough news to swallow.

Lime prices are surging, putting pressure on restaurants, bars and grocery stores.

"This is uncharted water," said Raul Millan, executive vice president at Vision Import Group. "We've never been at these prices. I've been in this business for 15 years."

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At major retail supermarkets, the weighted average price for a lime has shot up to 53 cents, up from 21 cents in the year-ago period, according to data from the USDA Agricultural Marketing Service tracking ad prices for March 15 to March 27.

Millan, who imports around 1 million boxes of limes per year, typically pays about $20 to $30 per 40-pound box during this time of year. Right now, he's forking over around $90.

Meanwhile, Rosa Mexicano has been feeling the pinch for about four weeks, said Christian Plotczyk, the restaurant chain's corporate chef. The price he pays for limes has roughly doubled since then.

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"There's not really much I can do about it," Plotczyk said. "We're a Mexican restaurant so we use a lot of fresh-squeezed lime juice behind the bar and in the kitchen, and we've really had to eat the cost because you can't substitute anything else for fresh."

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So far, his company hasn't cut its lime usage but has cautioned workers against wasting the tart juice.

"If the price continues to increase, we'll probably have to pull limes off some dishes where it's not necessary," Plotczyk added.

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Various factors are to blame, including bad weather in Mexico, where the vast majority of limes consumed in the U.S. are produced, and a citrus disease that's hit crop production, said Colin Fain, the CEO of Agronometrics, a firm that analyzes agricultural data.

"The retailers and restaurants have to pay a bit more," said Lance Jungmeyer, president of the Fresh Produce Association of the Americas, a trade group representing businesses that are involved in the Mexican produce supply chain. "As a retailer, you consider how much space you're going to devote to limes."

Restaurants may also be scaling back the amount of lime they give customers in the wake of falling profit margins, Jungmeyer added.

Sky-high prices have also led to harvests of smaller limes, said Vision Import's Millan.

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"What's elongating this issue is the Mexican growers are going into their groves and picking limes that are very small because they are getting such a high price and high demand," he said. "They're not giving the trees a chance to reboot themselves."

Millan doesn't expect the market to stabilize until mid-June.

Jungmeyer is a little more optimistic.

"By May, we should be back to pretty much normal prices," he said. "In April, we should see lime supply increasing."

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