Grapefruit production costs

Grapefruit Production Costs Drop; Profitability Is Elusive

Ernie Neff Bactericides, Economics, Grapefruit

Grapefruit production costs

Ariel Singerman

A decrease in grapefruit production costs among Indian River growers allowed the average grower to approach the break-even point in the 2015-16 season, a University of Florida economist reports. Ariel Singerman made his report at the recent Florida Citrus Show in Fort Pierce. The report was based on a July 2016 survey of 70 growers representing a majority of grapefruit acres in the Indian River area.

According to Singerman, per-acre production costs dropped to $2,236 in the 2015-16 season, from more than $2,400 the previous season. He explains the cuts: “Growers simply cannot keep up with that level of expense, so they are cutting back on their programs.” He says that the single biggest cut came in tree replacement costs. “They (growers) had replaced six trees per acre per year in the previous season, and in 2015-16 they replaced only two trees per acre per year,” Singerman says.

Since the early 2000s, the cost of production on a per box basis has soared from about $2 per box to $7 per box. “As a consequence of the overall increase in the cost of production and the decrease in yield, particularly in the last few seasons, the cost of production per box has increased more (on a percentage basis) than the cost per acre,” Singerman says. Grapefruit production and yields per acre have plunged over the past 12 seasons, largely as a result of HLB. Canker and the hurricanes of the early 2000s have also taken a toll on production levels in the region.

Singerman reports that grower costs in the two seasons before 2015-16 exceeded revenues, leading to operating losses for the average grower. “But this past season (2015-16), since the cost of production decreased and revenues increased, they were closer to that break-even level,” he says.

Singerman says growers wonder if the cost of production will increase in the current season because of the addition of antibacterials. “And the second (question) is, what will be the effects of antibacterials on yield?”

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About the Author

Ernie Neff

Senior Correspondent at Large