Citrus freeze losses top $800 million

The dollar loss for the California citrus industry from the devastating mid-January arctic freeze totals at least $800 million, according to California Citrus Mutual.

However, that is sure to increase for citrus growers in San Diego, Riverside, Imperial, Ventura, Kern, Tulare, Fresno and Madera counties.

“There is no question in our mind,” reports CCM board chair Philip LoBue, “that this was, is and will be a major disaster for California and our industry.”

California Citrus Mutual expects the dollar loss numbers for navel oranges, lemons and mandarin variety fruit will be adjusted upward in early spring after all product has been accounted for.

Also in early spring the industry will begin harvesting Valencia oranges and while the damage appears to be significant at this time only the harvesting results will determine the final numbers. A slightly damaged Valencia orange has the ability to heal itself. That fruit experiencing temperatures in the low 20's for 10 hours or longer is no doubt lost.

“Today our industry has pockets of optimism in the form of quality fruit for the fresh market. They are isolated but they are there. We will harvest over the next several weeks, utilize our consumer protection program and complete the season early, a season that normally runs into June,” he concludes.

Tree damage

“We have also learned that significant tree damage did occur in Imperial and Riverside counties,” reports CCM President Joel Nelsen. Lemon industry members also expect the late '07 crop to be adversely affected but the extent of that damage is unavailable. New buds were destroyed thus eliminating potential fruit for harvest in late summer and early fall.

Broken down by variety, the losses are:

Navel Oranges — 40,000 cartons lost @ $410 million.

Valencia Oranges — 20,000 cartons lost @ $184 million.

Lemons — 7,600 ctns lost @$114 million.

Mandarin Varieties — 15,000 ctns lost @ $67 million.

Grapefruit — 4,000 ctns lost @ $28.5 million.

Fruit that has some juice is being harvested immediately while it has value equal to harvesting costs.

However, the majority of the fruit is damaged so badly that it will eventually be stripped from the tree and forwarded to landfill, according to Nelsen.

The industry normally exports 15-20 percent of its orange volume. That will not occur this year, added Nelsen.

Inquiries have been made as to sourcing product off-shore. Many countries have pest and disease issues and are forbidden from entering into the United States and/or citrus producing areas.

The majority of producers have crop insurance. The aggregate liability in California is $311 million according to the Risk Management Agency. This past season farming costs totaled approximately $560 million. Farming costs for the 2007/2008 season will approach another $550 million. Frost protection costs for this season will exceed $100 million. While the January freeze devastated, growers have been protecting against frost since the frost season began in November.

Industry revenue season to date is $125 million. Industry revenue for fruit shipped after Jan. 12 may approach $100 million.

Based upon the first quarter of the season anticipated gross revenues for the industry were expected to exceed $1.5 billion.

Production cost

California's fresh market based industry, ranks as the No. 1 citrus industry in the United States. California citrus producers have the highest cost of production worldwide. Production costs (not including harvest) average $1,945 per acre.

A 2002 economic study by Arizona State Univ. indicated:

  • The California citrus industry represented nearly $1.0 billion of economic value to the California economy and almost 15,000 jobs.

  • The California citrus industry represents $825.6 million of direct economic output and $1.633 billion when all upstream suppliers and downstream retailers are included, employing 25,000 direct and indirect workers.

  • Every 1,000 acres of oranges lost, for one year, costs the state of California $3.4 million in total output, 53 direct and indirect jobs and $177,000 in tax revenue. Workers throughout the economy lose nearly $1.0 million in income.

Today the industry represents $1.3 billion of on tree value and creates another $750 million of economic activity.

There are 270,301 acres of citrus in California broken down as 140,043 acres of navel oranges; 49,163 acres of Valencia oranges; 46,217 acres of lemons; 24,038 acres of mandarins, 8,403 acres of grapefruit; 2,042 acres of Pummelos and hybrids and 395 acres of limes.

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