Grapefruit Economics: The Bad News Continues

grapefruit

ariel singerman

An economic update on the Florida grapefruit industry delivered at the recent Florida Citrus Show indicates that the few grapefruit growers who remain struggle mightily to make a profit. University of Florida Institute of Food and Agricultural Sciences (UF/IFAS) economist Ariel Singerman delivered the report, which he summarizes.

“Production costs are only up marginally on a per-acre basis; only up $60 compared to last year,” Singerman says. “But, more importantly, they are up on a per-box basis by roughly 25 percent, and that is because of the decrease in yield.”

“The cultural cost (of grapefruit production) is about $2,300 per acre and the total cost is $2,800 per acre,” Singerman says. He adds that prices have increased, as would be expected with continually diminishing grapefruit supply in Florida.

“This last year, growers on average were only able to break even, which to some extent is better than what happened in previous seasons in which they lost money,” the economist reports. “But I’m not sure that that is necessarily a sign of improvement; and the reason for that is because the number of growers in the industry is going down. So what that means is that the ones that were on the margin are exiting the industry. So now we have a smaller number of growers, and that is one of the reasons why we are seeing break even, perhaps.”

Singerman says the latest U.S. Department of Agriculture census data for Florida grapefruit growers dates to 2012, when there were approximately 370 growers. “But that number has been coming down since 2002, and it is very sensible to assume that it is quite much lower than that,” he says.

“The other important thing that I discovered while doing the cost of production survey is that, as in other areas of the state, growers are cutting back on insecticides to make room for bactericides,” Singerman reports. “And that has contributed to the increase in ACP (Asian citrus psyllid) populations statewide.” An increase in ACP populations leads to an increase in HLB infections statewide.

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Ernie Neff

Ernie Neff

Senior Correspondent at Large