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Citrus Growers Seeing Record Season for Farm Prices

The Ledger – July 28, 2012

HAINES CITY | Despite the ongoing battle with major issues, such as citrus greening and declining U.S. orange juice sales, plus many more smaller difficulties, growing citrus in Florida proved very profitable in the recently completed 2011-12 season.

“It’s going to turn out to be the best or second best year on record” for farm prices on oranges, said Tom Spreen, a University of Florida economist who follows the global citrus industry. Official U.S. Department of Agriculture figures won’t be released until next month.

While greening and falling OJ sales remain significant industry problems for the long term, they helped send 2011-12 farm prices toward record levels, he added.

Those levels include an average farm price of $2.075 per pound solids for Valencia oranges, harvested from March to June, and $1.93 for early and mid-season oranges, picked from October to March, according to Florida Citrus Mutual in Lakeland, which tracks farm prices throughout the season. That came on a 2011-12 harvest of 146.5 million boxes, about 95 percent of which went to juice.

Grapefruit growers did less well but still got good returns, averaging $1.52 per pound solids for white varieties and $1.54 for colored grapefruit, Citrus Mutual reported. About 60 percent of Florida’s 18.8-million-box grapefruit crop was processed for juice.

“These were some of the highest average prices on record,” said Bob Norberg, deputy executive director at the Florida Department of Citrus in Bartow and an economist.

Pound solids is a standard industry measure of the amount of juice squeezed from citrus fruit.

Farm prices for 2011-2012 early-mid oranges started high because Florida’s juice processors entered the season with low inventories, about 18 weeks supply, Norberg said.

The shortage came after several seasons of low orange harvests as Florida growers struggled with greening, a bacterial disease that makes the fruit inedible and eventually kills trees, said Mark Wheeler, a grower and president of Citrus Mutual, the state’s largest growers’ representative.

Then came the “carbendazim scare” in January, which pushed prices even higher, particularly for the Valencia oranges yet to be picked, Norberg and Wheeler said.

“Processors acted on the belief imports would be interrupted for a considerable period of time,” Wheeler said.

On Jan. 9, the U.S. Food and Drug Administration announced it would be testing all U.S. orange juice imports for carbendazim, an illegal fungicide in this country but widely used in Brazil, which normally accounts for about half of all OJ imports. The testing started after the FDA confirmed traces of carbendazim in U.S. products containing Brazilian OJ.

“The prices went so high solely on carbendazim,” said Bruce Nearon, a Lake Wales grower. “We didn’t make a killing, but we made a fair return on our investment.”

U.S. orange juice sales had been declining for nine of the past 10 seasons entering 2011-12, and they’re expected to decline again after sales dropped more than 10 percent in the months following the widely publicized carbendazim controversy.

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