Orange crop heads into peak shipping season


Issue Date: January 1, 2020
By Ching Lee

After a difficult season last year marked by an abundance of smaller fruit and a slowdown in exports, California citrus growers say their current orange crop and market prospects have improved.

Growers have reported better fruit sizes and quality for the 2019-20 season, with "good movement" of the crop, said Casey Creamer, president of California Citrus Mutual. With bigger fruits and lower yields this year, he said market prices have also improved, though not to the level of two years ago, which he described as "one of our best years we've ever had."

"It's not quite the season we were hoping for," Creamer said. "We still have challenges with export markets, but at this point in the season, it's looking like we've got a much better season than what we had last year."

It is prime shipping season for oranges going to China ahead of the country's New Year celebration, which falls on Jan. 25 this year. With no resolution to the U.S.-China trade dispute and retaliatory tariffs still in place for U.S. citrus fruits, Creamer said "a lot of concerns" remain for one of the sector's top export markets and "how that's going to shake out in the next few months."

Despite the effects of the Chinese tariffs, Creamer said, California citrus exporters are starting to see some movement of fruit into that market, though he added it's uncertain whether the increased shipments this early in the export season are due to Chinese New Year starting earlier or a sign of improved movement for the rest of the year.

Weaker export demand last year due to Chinese retaliatory tariffs and larger volumes of smaller fruit led to more supply ending up on the domestic market, which drove down prices, Creamer said. Slower movement of the crop meant some of the fruit stayed on the trees longer than it should have, degrading its quality over time, he added.

With a better-quality crop that markets desire this year, Creamer said growers are hoping they won't see a repeat of last year's difficult marketing conditions but noted that prices so far are "definitely not as good as they would have been had the China situation been resolved."

"A return to normalcy would be nice," he said.

With prices for oranges "on the low side" at this point in the season, Brian Neufeld, a Tulare County citrus grower who also manages farms in Fresno and Riverside counties, said he won't start picking navels until sometime this week or next week, having applied gibberellic acid to slow maturity of the fruit on 90% of his crop.

Though California harvest of early-season navels began in mid-October, he said a later harvest will allow his fruit to develop the higher sugar levels that export markets require.

"That's where the best money is—if you can make high brix, if you can make export quality and size," he said. "The rind also has to be really hard in order to make the long-distance travel."

Because of an oversupply of smaller fruit last year that did not make export grade, Neufeld said it's hard to know to what extent reduced exports were due to Chinese tariffs versus fruit that simply didn't meet export criteria. His concern now, he said, is that the tariffs will curtail the flow of this year's better-quality fruit to that market.

"We're all sitting on pins and needles right now waiting to see what's going to happen between the Trump administration and China," Neufeld said.

His other worry, he said, is weather-related: The series of rainstorms and milder temperatures in December could cause fruit to rot and the rind to soften, making the crop unsuitable for export. His preference, he said, is for temperatures to reach the low 30s every night this month.

Jared Plumlee, vice president of farming for Booth Ranches, which grows citrus in Fresno, Tulare and Kern counties, agreed the warm fall "definitely hurt the longevity" of the fruit that did not get treated with gibberellic acid, which accounts for about 25% to 30% of the farm's citrus crop. The rain has also kept crews from getting into muddy fields, delaying harvest by one to two weeks, he said.

Unlike last year, when the state's early orange season was "hammered" by a flood of imported mandarins and navels on the market, Plumlee said there was less pressure from the easy-peelers this year, though imported navels still "kept pricing a little lower than what we would like." The real pressure, he said, will occur during peak season, usually from now into February, when pricing typically dips as more fruit enters the market.

Though he doesn't export to China, Plumlee said impact from the U.S.-China trade dispute remains a concern for him nevertheless, as it could put pressure on other markets to which he does export, such as South Korea and Japan, and potentially lower prices in those markets.

"If all that fruit doesn't have a home in China, it's got to go somewhere, so it's either going to end up on the domestic market or it's going to end up competing with you in one of your other export markets," he said.

Despite declining state navel-orange acreage, Plumlee said he thinks there's still market opportunity for the variety and would consider expanding the farm's navel acreage, though land prices and the uncertainty surrounding the Sustainable Groundwater Management Act will drive those decisions.

California navel-orange acreage has dropped to its lowest point in the last two decades, with 2018 bearing acreage at 113,165, about the same as the previous year, according to the U.S. Department of Agriculture. Total citrus bearing acreage stood at about 250,000 in 2018. Navels, including Cara Cara and blood oranges, continue to dominate the state's citrus production.

Farmers expressed growing concern that quarantine areas where the Asian citrus psyllid has been found continue to expand in Southern California. The pest, first discovered in the state in 2008, can transmit the fatal bacterial disease huanglongbing, or HLB, to healthy citrus trees, though state commercial groves so far have not been affected. The psyllid's presence in the state and growing infections of HLB in residential citrus trees have led to increased costs to growers, who pay an annual assessment of 9 cents per 40-pound carton to help fund the Citrus Pest and Disease Prevention Program.

Operational protocols to keep groves clean of the psyllid and to prevent its spread add another layer of expenses that include labor, treatments and tarping of loads moving through quarantine zones, growers say.

"And for the most part, we have been successful in keeping the ACP out of commercial groves," Creamer said, though he added that it takes three to four years for an infected tree to show signs of HLB. "The reality is we just don't know, just because of the latency of the disease."

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.