Two economists addressing a Gulf Citrus Growers Association economic seminar on Nov. 30 agreed that low-density citrus plantings would likely be hazardous to growers’ financial health in the face of HLB. One also reported that the average grower is not making a profit, and that small growers are exiting the industry faster than larger growers.
“We were looking into different tree densities: 145 trees to the acre, 220 trees to the acre and 303 trees to the acre,” says Ariel Singerman, economist with the University of Florida’s Institute of Food and Agricultural Sciences (UF/IFAS). “We considered different scenarios for yield: low and high, and different scenarios for prices: low, medium and high. And basically what we found is that you don’t make any money when you have 145 trees to the acre and you have a low-yield scenario” which the U.S. Department of Agriculture’s National Agricultural Statistics Service reports is the average in Florida groves. “You need to have at least 15 percent over that (average yield), and even then you have a modest return” with 145 trees per acre, Singerman says.
Even at 220 and 303 trees per acre, it takes a while for growers to break even on their investments, under Singerman’s economic analysis. “Even the best-case scenario takes about 10 years just to break even,” Singerman says. The economist acknowledges that many growers are uncertain they can get 10 years of production out of a tree in the face of HLB.
Economist Tom Spreen, UF/IFAS professor emeritus, agreed with Singerman that growers can’t be profitable planting 145 trees per acre. He said growers likely need to plant more than 200 trees to the acre to be profitable.
Singerman says Florida citrus growers now are losing money, on average. “If we take the average yield for the state and the average price of (oranges) … the grower is not making money currently and has not been making money for the past few seasons,” he says.
Small growers are leaving the citrus business faster than their larger counterparts, Singerman adds. “This whole HLB situation has put more stress on small growers who cannot face the larger costs that a grove now demands,” he says.
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