Observations on the 2019 Brazilian Citrus Industry

Daniel CooperBrazil

Orange crop harvest in Brazil

By Thomas Stopyra, Certified Crop Advisor

Note: The following report is based on data gathered from a variety of sources and reflects the personal opinion of the author. It should not be used as a basis for buying, selling or speculating futures or any other business decisions regarding agricultural enterprises or commodities.

The recent estimate published by Fundecitrus for the round orange crop in the states of São Paulo and Minas Gerais of 388 million boxes may fall short by 5 to 7 percent due to a lack of size in some areas. There was an extended period of drought in January when the fruit was sizing, and many growers were unable to irrigate. 

The main variety, Pêra, which accounts for more than 36 percent of the 170 million producing trees (±750,000 acres) is now being harvested. Planting this somewhat productive variety on Rangpur lime rootstock had been a mainstay on non-irrigated land for 40+ years until the recent introduction of Swingle citrumelo. Due to an unexpected incompatibility between Pêra orange and Swingle, nurseries in São Paulo must produce interstock combinations of Swingle–Valencia–Pêra, which grow quite well, although irrigation is recommended. Estimated cost for a normal (single-budded) young tree is $2.25; an upcharge of 50¢ is collected for the interstock (double-budded) tree. São Paulo today has an estimated 250 citrus nurseries that produce approximately 10 million young trees annually.

The overall mood among citrus growers is very positive, even though HLB has reached epidemic proportions (more than 50 percent infection) in the center of the state. Some of the more diligent growers have been able to produce islands of productive groves within a region that is highly infected.

Over time, the Brazilian Citrus Foundation, Fundecitrus, has developed the “Ten Commandments of HLB Control,” which include scouting for psyllids and infected trees, removal of the inoculum coupled with rigorous psyllid control, and replanting with clean material. The importance of having a good neighbor becomes absolutely essential to the success of the operation. Growers that were able to reduce the initial infection to acceptable levels (± 1 percent) have been required to scout for infected citrus trees up to 1.5 miles beyond their border.

Due to the extremely low frozen concentrated orange juice inventories in May, the price for round oranges has not suffered a significant reduction. Spot market prices for early and mid-season oranges has maintained steady at $4.00 to $4.50, and many growers have continued to reset groves. Long-term contracts vary from $4.50 to $6.25 per 90-pound box, depending on the age and volume of the negotiation. Currently, the Brazilian citrus industry enjoys a period of prosperity, due to a number of factors:

  1. Wholesale elimination of trees with HLB symptoms immediately after the initial finds in 2004.
  2. Implementation of effective integrated pest management programs due to less pressure from Diaphorina citri, which has had a presence in São Paulo since 1949.
  3. The existence of economically viable alternative crops such as sugar cane, soybeans, rubber and peanuts that gave smaller landowners an option once the incidence of citrus greening reached epidemic proportions.
  4. Growers that were unwilling to remove infected trees were forced to do so under Brazilian law IN-53, which states that any citrus plant with symptoms must be eradicated at the owner’s expense.
  5. Some growers were able to move to new production areas in the state: a) in the north, where elevated temperatures kept the disease at bay, and b) in the south where cooler temperatures create ideal conditions for many varieties. These newer large-scale plantings were designed to eliminate the bad neighbor, making psyllid control more manageable.
  6. The research organization with the responsibility to investigate and combat infection from devastating pests and diseases, Fundecitrus, was in place when citrus greening was first discovered in São Paulo and its initial focus was psyllid control.
  7. The variety of insecticides currently labeled for citrus applications in Brazil is really quite extensive. The list includes six modes of action and some products, such as Talstar (bifenthrin), Carzol (formetanate), and Applaud (buprofezin), that no longer have foliar registrations in Florida. This has allowed growers to apply insecticides on the borders every seven days and within the grove every two weeks, in addition to the quarterly drenches with neonicotinoids.

Greening has been creeping into the more productive areas of São Paulo and has reached epidemic proportions in the center part of the state. This increase, in spite of all the known precautions, has growers, researchers and industrialists worried that the disease may spread to outlying areas where the incidence of infection is extremely low. The map below shows the regions of Limeira (48 percent), Brotas (55 percent) and Duartina (32 percent) with excessively high levels of infection.

São Paulo and Minas Gerais have no immediate competitors anywhere in the world in producing round oranges for juice and citrus byproducts. In fact, the recent imports by Tropicana and Cutrale send a clear message that outside sources of juice can easily supplement or replace the lost production and poor quality now being grown in Florida. If Brazil can maintain its production levels at 300 million plus boxes and the demand for orange juice continues to soften, Florida growers may experience a further decline in spot market prices. The long-term contracts offered just a few years ago with a $2.00 floor per pound solids will quickly fade away.  Florida growers will need to find ways to reduce caretaking costs while increasing production and quality, which has been a monumental challenge the last few years.

Source: International Agribusiness Consultants, LLC