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ROBERT SIEGEL, HOST:

Margaritas and guacamole became a little more expensive to make in the last few months. You can blame the squeeze on limes. Prices for limes, which are imported almost exclusively from Mexico hit record highs this year. But now production is up so prices are dropping. NPR's Carrie Kahn has this story from one of Mexico's key lime producing states.

(SOUNDBITE OF CROWD CHATTER)

CARRIE KAHN, BYLINE: At an outdoor market in the town of Apatzingan, in the state of Michoacan, dozens of buyers hover around the backs of beat up pickup trucks filled high with crates full of limes, known in these parts as green gold. Lime buyer Geraldo Fernandez scrambles up the back of the crates and peers over the top.

GERALDO FERNANDEZ: (speaks Spanish)

KAHN: Fernandez says the drivers roll in and their limes are selling fast, like hot cakes. While Mexico's other lime producing states were hit hard by bad weather and a fungal outbreak, the orchards here have been flourishing, netting record profits for Michoacan's farmers. But with every boom comes the bust and prices are falling fast. Better weather and a bountiful spring crop have supplies back to normal.

Fernandez thumbs through another box of limes. He tells the driver he'll give him 80 pesos, about six bucks for the whole 40 pound box.

FERNANDEZ: (speaking Spanish)

KAHN: Just a month or two ago he says he was paying these guys as much as $35 a box. Prices in the U.S. are dropping too. Last week the USDA said consumers paid on average 30 cents a lime, compared to 90 a few months ago. But Michoacan farmers aren't complaining about the precipitous price drop.

Most are still enjoying their record profits and the biggest boon. This is the first time in a decade many say they haven't been at the mercy of Mexico's ruthless drug cartels.

(SOUNDBITE OF LIMES BEING UNLOADED)

KAHN: Down the street at a large processing plant workers unload limes into a huge container connected to a narrow conveyor belt. As the limes move down the line...

(SOUNDBITE OF CONVEYOR BELT)

KAHN: ...they get washed and sorted. For more than a decade every part of the lime business was controlled by one drug gang or another - the last few by the Knights Templar cartel, says buyer and farm manager Efrain Hernandez Vazquez.

EFRAIN HERNANDEZ VAZQUEZ: (speaks Spanish)

KAHN: Hernandez says you'd make the money and they would take it. They charged so called taxes, quotas on everything. The drug gang told farmers where and when they could sell their crops and most importantly at what price. Hernandez estimates he paid about $2,000 dollars a week or 10 percent of his sales to the Knights Templar.

But since a federal police crackdown in the state and the emergence of civilian militias, the cartel has been on the run. Several top leaders have either been killed or arrested and three mayors and a former governor of Michoacan have been arrested on charges of colluded with organized crime.

VAZQUEZ: (speaks Spanish)

KAHN: Hernandez says now it's just pure happiness.

(SOUNDBITE OF BULLDOZER)

KAHN: In fact, he just bought 30 more acres and workers are clearing the land for even more limes. Hernandez tells me to take in a deep breath and smell the sweetness. They smell so good. (speaks Spanish)

VAZQUEZ: (speaks Spanish)

KAHN: The best, he says, then he turns away from my mike and laughs - they smell just like dollars, don't they? Carrie Kahn, NPR News.

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