A study by Brazilian citrus consultant Gilberto Tozatti indicated that even under high HLB pressure, but with reasonable prices, it is worth investing in new citrus plantings.
Tozatti’s study, presented at the recent International Research Conference on HLB, received support from the Group of Citrus Consultants (GCONCI).
Tozatti summarized his presentation:
Brazil is the world leader in the production of orange juice. However, the Brazilian citrus industry is facing a considerable increase in the incidence of huanglongbing (HLB). HLB reduces productivity and can render trees unproductive, shortening the life span of orchards and threatening the economic viability of the investment.
GROWERS SKEPTICAL ABOUT INVESTING
The significant increase of symptomatic trees has left growers skeptical about investing in renovation and new orchards in regions with high rates of the disease. Given the current good prices for oranges, the search for phytosanitary gaps within and outside the Citrus Belt, and even living with the disease while managing it to maintain production, have been the only options for growers and, at the same time, a great challenge.
THREE HLB SCENARIOS STUDIED
The objective of this study was to update economic viability calculations through the internal rate of return (IRR) in orange production in different HLB prevalence scenarios (L = low, M = medium and H = high). The study considered the Gompertz model to calculate the drop in productivity and the prices per box of oranges paid to the producer when harvested and transported to the processing industry (ranging from U.S. $7.63 to $9.69).
The analysis showed that in the scenario of lower HLB pressure, the IRR varied from 10% to 24%, considering the price range proposed for the box of oranges. In the high HLB pressure scenario, the IRR ranged from negative to 20%. Therefore, even under high HLB pressure conditions, but with reasonable prices, it is still worth investing in new plantings under the conditions proposed by the study in the Citrus Belt.
CONCLUSIONS
Faced with the surprising increase in the incidence of HLB in the Citrus Belt, most growers are unsure about continuing to invest in orange orchards. Although prices should remain reasonable for the coming years due to the forecasted drop in production caused by HLB, economic feasibility studies considering disease pressure and scenarios for the price of a box of oranges are fundamental for growers’ decision-making.
The study showed that the internal rate of return (IRR), even under conditions of high disease pressure but with reasonable prices, is positive. This can motivate growers to continue investing in orange production and to contribute to meeting global demand.
Share this Post
Sponsored Content