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Citrus Demand Lessening And Growers Are Hurting

Highlands Today – June 27, 2009

AVON PARK – After the hurricanes of 2004, citrus growers were philosophical. Sure, 175 million boxes of citrus were just 58 percent of what they had produced seven years ago, but if the supply went down, and demand remained the same, prices would go up. Profits would even out.

So, what really happened?

The price of orange juice at the supermarket back then was $2 to $2.50 per gallon, according to the USDA. Today, the advertised price is $6 per gallon at Target.

The price went up so high, people quit buying as much OJ.

“The plants are full,” says John Barben, co-owner of groves in Avon Park. “They’ve got a lot of juice in storage.”

So much juice in storage that the juice processors are telling the Barbens to pick more slowly.

“We’ve picked very little,” Barben said. “This is despite the fact that Cargill and Sun Pure plants closed in the past two years.”

Two big reasons for the oversupply:

•The economy. Moms are deciding which is more important, Barben elaborated, $6 orange juice or $4 milk.

•The citrus industry is spending $20 million less per year on TV commercials and magazine advertising. Instead, growers dedicated the money to research the citrus greening disease. Spread by an insect, greening bacteria destroys fruit and kills trees within a couple of years. Greening has been found in almost all 32 citrus-producing counties.

Orange juice demand is down and the supply is up, so the price processors are paying growers like Barben dropped from $1.30 last year to 85 cents a gallon this year.

What does all that mean to grove owners?

“We’ve got to start making decisions,” Barben said. “The disease is killing us, and we know advertising works. But there are only so many dollars. It’s going to be tough for the next couple of years. “At 85 cents a gallon, we can’t do all the things we need to do to stay in business.”

Many growers have dropped out.

In 1998, 785,900 acres of trees grew 13,600 tons of citrus for Florida. But last year, Florida had 554,400 acres of trees that produced 7,200 tons of citrus.

“If we were to drop to 400,000 acres, would we start losing processing plants?” asked Michael W. Sparks, executive vice president and CEO of Florida Citrus Mutual. The answer may come soon.

There’s little doubt that urban development, hurricanes, cold snaps, canker and greening will continue. More trees will go. Fewer growers will replant.

Florida Orange Estimate Down Again

LAKELAND – On Monday, the U.S. Department of Agriculture reduced its orange crop estimate for the 2008-2009 season by 3 million boxes.

“Hopefully, the reduced production will spur higher prices to growers, because right now they are facing very high input costs associated with disease pressure and fertilizer prices,” said Michael W. Sparks, executive vice president and CEO of Florida Citrus Mutual. “We are in the middle of a very challenging season.”

This is the second time the USDA has revised the citrus projection downwards. In October, government scientists guessed 166 million 85-pound boxes would be picked. The January estimate is 162 million boxes. The USDA maintained that 23 million boxes of grapefruit will be produced in 2008-09.

Last year, Florida Citrus Mutual estimated the Florida citrus industry employs 76,000 people and creates a $9.3 billion annual impact on the economy.

Founded in 1948, representing nearly 8,000 grower members, Florida Citrus Mutual is the state’s largest citrus grower organization. More info: www.flcitrusmutual.com

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