January 15, 2010

5 Min Read

California’s citrus growers and packers saw a lot of green last year, and it wasn’t in the form of currency.

Although fruit passed maturity tests, it simply did not color well, said Joel Nelsen, president of California Citrus Mutual in Exeter. He said some packinghouses had to keep fruit in “de-greening” storage for long periods, pumping in ethylene gas to achieve the desired color.

Fast forward to this season and the picture is much different.

Consistently cool nights have helped the fruit color well, said Bob Blakely, director of industry relations for Citrus Mutual. “The quality has been very good, 85 percent to 90 percent packable with sugar coming on well and bigger sizes,” Blakely said.

A cold snap the second week in December could shave the percentage of packable fruit, Nelsen conceded, adding “we’ll have to see where and how much” was damaged.

Rains moving into the region could help “manage inventories so we don’t over-pick,” he added.

Export demand is up compared to last year, Blakely said, partly due to a weaker U.S. dollar.

In an address to a Fresno conference on agribusiness and in a commodity outlook report, Nelsen looked at last season’s harvest and challenges that the industry faces in the harvest and marketing of this year’s crop.

One of those challenges clearly involves keeping citrus greening – a disease that has nothing to do with maturation of fruit from green to orange – out of California’s citrus groves and avoiding the sort of catastrophe that has plagued Florida. Citrus greening is caused by a disease called Huanglongbing, which is carried by a citrus psyllid no bigger than an aphid.

Nelsen told how he watched young trees in Florida being snapped at the root with a machine that moved through the groves, taking out diseased trees. He mimicked a large machine that swooped down on some trees, grinding them and sending oranges, wood and juice flying.

The California citrus industry has begun levying a penny-per-carton assessment this year to develop a war chest for prevention of the disease. In its first year, the program would raise $1.7 million, and within two years assessments could be hiked to between 5 and 7 cents per carton. The assessment would be capped at 9 cents. A nickel per carton would raise $8.5 million, Nelsen said.

The National Agricultural Statistical Service has estimated that the California industry will harvest 80 million cartons of fruit off its 135,000 acres. That compares with 62 million cartons harvested last year, and Nelsen terms it an average crop.

He said some in the industry think this season’s estimate is “a bit high inasmuch as it includes non-being acreage transitioning into production.”

Nelsen said growing conditions last year were excellent with a strong bloom, consistently warm temperatures for sugar development and early rain for size growth. “All in all this could be a very good year,” he said.

One wrinkle this year is that more seedless mandarins are competing with navel oranges, which have traditionally been a mainstay for the fresh citrus industry. “Navel growers don’t have the market to themselves now,” Blakely said. “People are still buying citrus, but they have more choices.”

But Nelsen said pricing for both mandarins and navels remains strong.

He said the bulk of seedless mandarins – more than 200 million 5-pound units – will be harvested from October to March. “Those sales are affecting early navel sales, thereby reducing December and January movement significantly,” he said. “Cannibalization of market share is the term bandied about, and one of the biggest challenges facing our industry is the movement of two commodities simultaneously. The effort is to increase the entire commodity, not reduce one variety for another.”

Nelsen said one optimistic note can be drawn from the fact that there was no loss of citrus acreage despite the loss of three marketing entities – Sunnycove Citrus, Brabante Citrus and Z&S. Nelsen said the tonnage that had been sold by those entities was formerly outside the information exchange system of the California Citrus Growers Association.

“All of that fruit is now with entities supporting information exchange,” he said.

Nelsen said the 2008 Valencia season was quite profitable, and that acreage and tonnage are down significantly because of offshore imports. He said the lemon industry had one of its worst years “in recent memory.”

“It was a victim of the recession and the worldwide glut of lemons,” Nelsen said. “Our own crop was the largest in the past five years. But the recession affected food service sales significantly as well as fresh retail as customers found this was one commodity they could easily cut back on.”

For all California citrus, Nelsen said, production “varied mightily between counties and blocks within counties.”

“If Mother Nature provided a producer with 450 cartons or better per acre, then the producer made good money. Those around 400 cartons – and there were many with less – did not fare so well. It was one of our more challenging seasons.”

Pricing opened the season at historical highs and remained there most of the season. But the market experienced a steady decline from early January through April. By the end of April prices retreated to an average price of close to $10 per carton before beginning a late season rally that took prices to over $20 by the end of June.

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