Written by The Business Journal Staff
That’s what a group of industry executives told hundreds of citrus growers, packinghouse representatives and others involved in the citrus industry during California Citrus Mutual’s 2017 Citrus Showcase earlier this month at the Visalia Convention Center.
In addition, the attendees were told that they’ll need to exercise discipline and control to not plant additional acreage of mandarins and navels this year.
“There appears to be equilibrium in supply and demand,” of the two fruits, explained Berne H. Evans III, founder and chief executive officer of Sun Pacific, Inc. the Valley-based grower and packer of fruit that includes Cuties easy-peel mandarins.
“If you have small fruit, you’re not going to do that well” this year, he said, adding that for now, he wouldn’t recommend planting additional acreage.
He made his comments during the luncheon held during the Showcase, where he was joined by Citrus Mutual President Joel Nelsen, serving as moderator, along with fellow citrus-industry titans David W. Krause, president of Wonderful Citrus; Russell H. Hanlin, president and CEO of Sunkist growers; and Martin J. Marderosian, president and owner of Bee Sweet Citrus, Inc.
“We are spending a lot of capital to gain more consumption on the easy-peel category,” said Krause, adding that if the ad campaigns aren’t successful, there is a potential for oversupply in the near future.
The executives added that the cost of labor also is a major issue facing the industry, with Nelsen noting that a UC Davis study commissioned by Citrus Mutual a couple of years ago showed that grower costs had gone up 88 percent compared to a decade earlier.
Among those added costs is water, with surface water costing about 10 times more this past year than it did before the last five years of drought in California, he said.
And new farming and transportation regulations are further elevating those costs, noted Marderosian, adding that Bee Sweet has implemented double shifts to cut down on worker overtime.
Evans said everybody in the Valley “should be on the steps in Washington raising hell” with politicians to sort out regulations on farms to reduce the financial pressures on them.
As for this winter’s rainfall, which has been well above average for this time of the year across the Valley, the executives said it was welcome after five years of the worst drought ever recorded in California, but the wet weather came at a price to citrus growers.
For one thing, the storms have resulted in so many days that picking crews couldn’t get into wet and muddy orchards that farms are largely behind in their harvesting.
“The [harvest] season started out on time,” with fruit beginning to arrive at packinghouses during the second week in October, and about 30 percent of the state’s citrus crop was harvested by Christmas, Nelsen said.
But in January and February, things slowed down due to rain delays, he added.
And fruit that’s picked after its preferred harvest time tends to deteriorate — sometimes while still on the branches. Additionally, all that rain can cause bacteria on the ground to splash up onto low-hanging fruit and cause rot problems throughout the tree for citrus growers.
As a result, “Packinghouses are going to have to do a petty good job grading fruit” — separating damaged or blemished fruit from the better-looking fruit that grocery stores prefer to have on their shelves.
Over the past couple of years, California citrus growers produced 88 to 92 million 40-pound cartons of fruit, and estimates before this winter’s storms were that the number would be down to about 84 million cartons, Nelsen said.
But in light of the fruit lost due to the heavy rains, that estimate has been scaled down to about 80 million, he said.
:And quality of fruit is down, on average,” Evans noted.
“It started out as a good year,” said Nelsen, adding that despite problems caused by the heavy rains, “I still think it’s going to be a good year.”
A big part of the reason is while the rain has caused problems for citrus growers, a break in the drought is a welcome occurrence that, among other things, is expected to result in farmers who depend of federally controlled surface water to get partial of full allocations after getting zero or near-zero allocations in recent years.
“And prices are good” for citrus, so farmers should be able to charge more for their fruit to make up for the dip in production, though that means consumers probably will end up paying slightly more for oranges, mandarins and other citrus this year, he added.