Alico, Inc. received significantly higher prices for its citrus fruit in the 2020-21 harvest season, but had reduced box production and reduced average pound solids per box of fruit.
The company’s average blended price for fruit was $2.45 per pound solids (PPS), up 31.7% from the $1.86 PPS it received the prior year. Alico cited “favorable industry supply dynamics” as the reason for the increased fruit price. It said the increase was largely due to greater consumption of not-from-concentrate orange juice by retail consumers since March 2020. The company said the increased consumption resulted in decreased inventory supply levels at Florida juice processors.
For the nine months ended June 30, the company harvested approximately 6.4 million boxes of fruit, a decrease of 15.9% from the same period a year earlier. It said the decrease was principally related to there being fewer pieces of fruit available on the trees, as well as greater fruit drop this season than last.
The company experienced an overall decrease in the blended average PPS per box, which was 5.66 for the recent nine months vs. 5.96 for the same nine months a year earlier.
In June, Alico entered into new citrus supply agreements with Peace River Citrus Products covering 3,614 citrus acres purchased in May and October 2020. The company said with those latest supply agreements, approximately 99% of its fruit is under contract through the 2023 and 2024 harvest seasons, with the largest portion under contract through the 2024 season. “These contracts will continue to enable the company to realize competitive margins for their duration,” Alico stated.
President and Chief Executive Officer John Kiernan expressed optimism about pricing over the next year. “Because consumption of not-from-concentrate orange juice remains strong, and processor inventories are at lower-than-normal levels, we believe market prices next year should remain near or above recent levels,” he said.
For the nine months ended June 30, the company reported net income, including land sales and leases, of $35.8 million compared to $6.5 million in the same period the prior year. Learn about one of those recent land sales.
Source: Alico, Inc.
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