New Economic Reports for Florida Citrus

Tacy CalliesEconomics

citrus crop forecast
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By Ariel Singerman

Four reports summarizing Florida citrus industry survey-collected data during the 2019–2020 season are available at https://crec.ifas.ufl.edu/economics/. The reports include the average cost of production for processed oranges, harvesting charges, custom rate (or caretaking) charges and packing charges. The estimates presented in those reports, as well as those available for previous seasons, document the changes in the industry as it tries to adapt to remain profitable.

The first report includes estimates on the average caretaking and total cost of production for processed oranges in Southwest Florida during 2019–2020, which were $1,722 and $2,095 per acre, respectively; down $125 and $175 per acre compared to last year. The reduction in cost was a rational response to the significant decrease in fruit prices.

Since growers are price takers, their typical response to lower prices is to adjust the level of inputs in their groves. The largest input reductions were in fertilizer and foliar nutrients. An interesting finding was that the spending on insecticides increased by $54 per acre compared to 2018–2019 — when growers had reduced such an expense by a similar amount. Therefore, they have reversed that decision this season.

The second report is on harvesting charges. The estimates are the result of a survey conducted among citrus harvesters whose combined harvested area accounted for 95,800 acres. The average total harvesting charges for fresh and processed oranges were $3.49 and $3.08 per box, respectively. For grapefruit, the average charges were $2.76 and $2.93 per box for fresh and processed fruit, respectively. For fresh and processed specialty fruit, the charges were $4.93 and $5.60 per box, respectively. These estimates are useful for computing on-tree prices and to estimate economic returns to citrus growers.

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The report on citrus custom rate charges presents the results of a survey conducted among Florida citrus caretaking companies. Participants represented 81,785 acres. The report provides estimates for the charges on grove practices that growers may contract out, and includes average charges as well as the minimum and maximum rates reported for each practice for the Central and the combined Indian River and Southwest Florida regions.

The fourth report is on packing charges. As a consequence of the decrease in the state’s supply of fresh citrus, the number of packinghouses has decreased significantly in the last decade. Five packinghouses participated in the survey this season, including operations in both the Ridge and Indian River regions. The total packing charges by citrus variety were $5.92, $6.26, $5.99 and $7.12 per carton for grapefruit, oranges, tangelos and tangerines, respectively. These estimates are useful for computing on-tree prices from delivered-in prices, which in turn are useful for computing growers’ economic returns.

Ariel Singerman is an assistant professor and Extension economist at the University of Florida Institute of Food and Agricultural Sciences Citrus Research and Education Center in Lake Alfred.

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