The average blended price per pound solid (PPS) for juice oranges grown by Alico, Inc. fell from $2.42 in the prior fiscal year to $1.86 in the current fiscal year. That was largely due to the Florida citrus crop being greater than expected in the 2018-19 harvest season, leading to excess inventory levels at Florida citrus juice processors, the company stated. It added that “the price reduction was also impacted by the continued inflow of imported orange juice, though at lower levels than the prior year.”
“Because of increased consumption of not-from-concentrate orange juice by retail consumers since February 2020 … inventory levels at the Florida citrus juice processors have been decreasing,” Alico reported. “The company expects this inventory trend will lead to improved market pricing in the next harvest season.”
“With the recent execution of two new citrus supply agreements, the company now has contracts in place that provide for prices per pound solid over the next several years, which will be greater than the current year’s prices per pound solid,” Alico added.
“The company’s harvesting activities were not impacted by the coronavirus pandemic, and there were no disruptions in delivering fruit to the processors,” Alico stated. “Additionally, to date, the company has not experienced any material challenges to its operations from COVID-19.”
The statements were part of Alico’s report on financial results for the third quarter of fiscal year 2020 and the nine months ended June 30. For the nine months, Alico earned net income attributable to Alico common stockholders of approximately $6.5 million, compared to approximately $21.3 million for the nine months ended a year earlier.
“These financial results reflect the seasonal nature of the company’s business,” Alico stated. “The majority of the company’s citrus crop is harvested in the second and third quarters of the fiscal year.” Consequently, most of the company’s profit and cash flows from operating activities are typically recognized in those two quarters, it added.
See the full Alico report here.
Source: Alico, Inc.
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