Growers in Florida’s central and southern citrus belts have long been familiar with ways to market and get paid for their fruit. But those elements of the citrus business are not so familiar in North Florida and South Georgia, where citrus is a relatively new enterprise for many. Some groves in that area are just being harvested for the first time or have only been harvested a few times. So, it was logical for speakers at a recent Cold-Tolerant Citrus Production Workshop in Perry to discuss citrus marketing and fruit contracts.
MARKETING
Kevin Athearn said grower marketing options include selling fruit to packinghouses or wholesale distributors or directly to foodservice or retail outlets. He added that growers can also sell directly to consumers through farmers markets, roadside stands or u-pick operations. Athearn is a University of Florida Institute of Food and Agricultural Sciences regional specialized agent at the North Florida Research and Education Center.
Athearn said North Florida packinghouses are Cherokee Satsuma in Marianna and Florida Georgia Citrus in Monticello. The Satsuma Company packinghouse is in Tifton, Georgia.
The top domestic markets for fresh citrus are Florida (1.3 million cartons), New York (651,000 cartons), Illinois (609,000 cartons), Wisconsin (271,000 cartons) and New Jersey (262,000 cartons), Athearn reported. Ontario (130,000 cartons) is the leading Canadian market for fresh citrus. Athearn explained that a carton is half of a field box. A field box of oranges and tangerines weighs 90 pounds and 95 pounds, respectively.
FRUIT CONTRACTS
Pete Spyke, a grower and owner of Florida Orange Shop in Citra, Florida, said cash on-tree contracts are the simplest option for making a fruit deal.
When making a deal, and the price offered is per pound, the question should be whether that’s the price of every pound of fruit removed from the grove, or just the fruit that will be sold to the primary market destination, Spyke’s slides stated. If the price doesn’t apply to all fruit harvested, it’s a consignment deal, which requires a consignment contract.
Consignment deals do not include a guaranteed price per box. Consignment is good if there is upside potential such as a niche market, special pricing or high packout. Consignment is bad if there’s downside risk such as low packout, a weak market or other difficulties.
In a consignment deal, a floor or minimum price can be considered to protect the grower. The packinghouse is protected by a list of fees, costs and charges specified in the contract. The floor is the minimum price the buyer agrees to pay for all the harvested fruit. A clause states that in any case, the minimum price per box harvested shall be a specified number of dollars.
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