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By Lana Robinson
Field Editor
In the best of all worlds, every agricultural producer would prosper. But much of the time, due to crop failures, natural disasters, and other factors, farmers in one region benefit from the misfortune of those in another. With Florida's citrus industry in shambles following four treacherous hurricanes over a six-week period, Texas citrus growers are expecting a stronger market for their product this season.
"Given the shortfall this year, we would expect a little higher demand and the No. 2s (Choice) grapefruit may be easier to move. That's why we're excited," said Dr. Julian Sauls, professor and Extension horticulturist in Weslaco. "Choice grade should also command a higher price—and most Choice grade fruit should actually be sold, unlike in most prior seasons when the amount of Choice fruit exceeded demand, causing the excess to be diverted to processing. Smaller sizes may be easier to sell, also, further reducing the volume to processing. Eliminations, of course, will still go to processing, but the overall processed volume should be down, mainly because most Choice grade fruit and smaller sizes will go fresh for a change. Ergo, juice inventory should decline, thereby increasing the returns on processed fruit."
Sauls said 70 percent of the grapefruit in Texas are grown for the fresh market. Of those, 45 to 50 percent are No. 1s (Fancy) and 20 to 30 percent are Choice. In a normal year, Fancy grapefruit make money and Choice does well to break even. In the aftermath of the Florida disasters, California's summer grapefruit sales also surged and FCOJ (frozen concentrated orange juice) prices rose dramatically. Sauls said oranges do not present as good an opportunity, since many countries grow oranges for concentrate.
Sauls said the normal summer payout from oranges processed at the Texas Citrus Exchange (TCX) in the 2003-04 season was delayed due to the excess inventory of juice (and the inherently poor quality of Marrs juice), but the payout may come a little sooner as FCOJ inventories are reduced.
Florida boasts close to 800,000 citrus acres, compared to the Rio Grande Valley's approximate 28,000 acres. Florida supplies 75 percent of all U.S. grapefruits. The Sunshine State specializes in white and pink grapefruit, while Texas focuses on the red grapefruit varieties.
Will Texas be able to supply the market enough grapefruit to make up for the fruit destroyed by storms in Florida? According to Sauls, Texas grapefruit has varied around 11,000 carlot equivalents over the last several seasons, which converts to about 220,000 tons, give or take. In Florida's boxes, that's something in the range of 5.2 million boxes.
"The grapefruit losses in Florida could easily exceed two to three times that amount—remember, this is an industry that produced roughly 45 to 55 million boxes of grapefruit annually during the last several years," said Sauls. "So, no, Texas cannot make up the shortfall."
Florida has lost about 73 percent of its grapefruit and about 17 percent of its orange crop, according to the Florida Department of Citrus. The Florida Department of Agriculture estimates the structural and crop damage from the hurricanes at close to $3 billion.
"The fruit loss is certainly serious, especially to the orange crop in central Florida and to oranges, specialty fruit and grapefruit in the Indian River," said Sauls. "The pre-Hurricane Jeanne estimate by the Florida Agricultural Statistics Service will be made public on schedule next Friday (Oct. 8)—with adjustments for Hurricane Jeanne expected to be factored in for the November forecast."
One of the worst-hit areas was the Indian River District on the Atlantic coast, the prime fresh fruit production area, which took the full brunt of both Hurricane Frances and Hurricane Jeanne. Sauls said the damage that can't be seen is a major concern. The groves were flooded too long and too many times.
"Root rot is sure to rear its ugly head and cause tree damage that will be manifest for another couple of years—and that's if it is not so bad as to dictate outright abandonment, conversion to other land use, or push and replant," the Extension horticulturist suggested.
In early October, Gary Herridge of Rio Hondo, who serves on Texas Farm Bureau's Citrus Advisory Committee, said the Texas grapefruit harvest was underway in some areas.
"Mine is still on the trees. I'm in the co-op, the Edinburg Citrus Association (ECA), and they come out and check the fruit to determine when it's ready to pick," said Herridge, explaining that a law in Texas requires that the citrus fruit has to reach a certain juice and sugar count before it can be sold. "Our crop looks good. We've been blessed with a lot more water, in the form of rain, in the last two years than in the last decade. I'm not going to say the drought's over, but it has been nice as far as water goes, the last two years. We have had no allocation. There has been enough in the reservoir. The rust mites have been kind of heavy, but other than that, we've had a good year."
Herridge had his personal crop topped and hedged last year, which is recommended for mature trees.
"It will mean a smaller crop, but larger fruit," he noted. "Removing the branches allows more sunlight in and, therefore, the fruit is bigger. It's going to be a plus. The larger fruit gets more money."
Herridge purchased his grove in 1988.
"I bought 53 acres. It was all citrus at one time. When I bought it, there were 22 acres, but so many dead trees it equalled about 17 acres. I removed them and put in 720 new trees in the skips. The very next year, the freeze killed every tree in the grove," he said.
Starting over cost Herridge and other Texas citrus growers a lot of other Texas citrus growers a lot of time and money. He said young trees produce fruit in the third year, but must be about eight years old to produce enough volume to sell commercially. Today, his grove consists of 4,680 trees on 32.5 acres. He considers his operation to be average in size, with producers growing fruit on as few as five acres up to 300 acres.
1989 also marked the beginning of other changes for Texas citrus growers.
"Before the '89 freeze—in that year—you got $175 per ton to clean the tree. Every fruit was weighed. Now, you get paid by the grade. The No.1 equates out to $50 to $80 a ton. Then you have the increased cost of chemicals. I'm on the eastern end of the Valley, and the pesticide cost has risen from about $2,500 to $3,000 in the early 1990s to about $6,000 today—while the prices are going the other way," he said.
Herridge said the Texas Legislature enacted a law that forbids the sale of out-of-state citrus in the state of Texas from Sept. 21 to Dec. 21.
"What that means is Florida can go in and pick tons of fruit and dump it on Sept. 1 and kill us, and that's what's been happening. The market has been so depressed for years, we're just breaking even," he suggested. "Grapefruit aficionados are willing to pay more for our sweet Texas varieties, but most people, when they see grapefruit at 49 cents a pound versus 29 cents, will buy the cheaper grapefruit."
Herridge said despite the oversupply, Florida has added more citrus acres over the past five years than the entire Texas citrus acreage.
"Florida has the same trouble we have. They have orchards there that don't get picked because there's too much of it. One of the reasons for it is that a lot of the real estate is land that was repossessed years ago by the savings and loans, banks and other institutions. They decided to sit on this land, and planted citrus. They have deep pockets, but they're hurting, too, because they are not getting a good return on their money," he said.
The Rio Hondo grower is optimistic in the short term.
"I've been hearing good things as far as our fruit this year. It's just hearsay, but a grove keeper who does my spraying said he's getting calls from people in Canada already who are looking for fundraiser fruit. There seems to be a lot of activity on the gift end of this business," he reported.
However, Herridge worries about the long-term market situation for his product.
"We don't have any safeguards in our industry. We don't have any support for our fruit. It's ironic. You can grow sugarcane, and it gets support. They're planting it like crazy, and making $1,000 acre off this stuff... There is no support on any kind of citrus. This is a very long-term crop, and without support, the investment is too great. If we get another freeze, I don't see anyone doing it in the future. It takes about $300,000 to put in and maintain an orchard. Not very many businesses or companies would buy what they can't get a return on in five years. They would say it's not a good investment. I've been in it 16 years, and I still don't have all my money back. I don't want to bad-mouth the industry. The lifestyle is great, if we could just get the supply down and the demand is still there, where we could all make a little money, then people would replant."
The Valley's infrastructure is declining, he said.
"We're down to three packing houses where there used to be 12. They used to compete for your fruit, and paid you the per-tree price for the fruit. Before this recent Florida disaster, they might not have taken you on as a client. They have more than they can handle. ECA (Edinburg Citrus Association) has been closed to new people for several years because they couldn't sell all the fruit, and that dilutes our fruit. Late in the season, April or May, they try to start getting rid of the fruit. In a co-op, you have to sell. Then the prices go down and down."
Herridge has heard rumors that Mexico is gearing up to supply grapefruit in the absence of the Florida fruit this year. Also, other NAFTA (North American Free Trade Agreement) countries are establishing citrus industries, which he fears will only add to the oversupply problem.
While he is genuinely sorry for Florida's misfortune, Herridge hopes that some of those sustaining damage in their groves will use the opportunity to cut back on production.
"We wouldn't wish a disaster on anybody, but we do hope we'll benefit and perhaps even out the supply and demand situation," he said. "A lot of places in Florida where trees have been lost, maybe they'll decide they need to push some of these out and sell it for commercial property."
