Marketing agents agreed the arrival of Chilean navel oranges will bring changes to the U.S. summer citrus business.
How much the market will change and how soon, though, remain unanswered questions.
“We’re still waiting to get a handle on what sort of volume we can anticipate,” said Marc Solomon, president of Fisher Capespan Inc., St. Laurent, Quebec.
Just getting access to a new stream of product, though, is significant, Solomon said.
“One of the main benefits of getting Chilean navels is we’re going to allow customers access to summer navels on the West Coast,” he said. “Up until this season, South African fruit has moved to the East Coast and the freight to move fruit from Philadelphia to the West Coast has been cost-prohibitive. Landing navels on the West Coast from Chile will satisfy our clients through that means.”
Clementines have been moving into the U.S. from Chile for about three years, so bringing navels into the markets should not be an earth-shaking change, said James Milne, citrus category director for Vancouver, British Columbia-based The Oppenheimer Group.
“Many of our proven clementine growers also produce navels, so we are enjoying the opportunity to bring their fruit to market this season.”
First-season learning curve
Options abound for receivers this year, with the arrival of the Chilean crop, which received U.S. Department of Agriculture approval for the first time, Milne said.
“Regionally, our growers produce both early and late, so our supply situation is optimal,” he said.
However, Milne said, the industry will be open-minded about what to expect this first season.
“We expect it will be a bit of a learning year as the Chilean navel industry gets comfortable with U.S. grade standards and the market reacts to the new fruit,” he said.”
Novelty may help sell a few navels this year, said Craig Uchizono, vice president of the Southern Hemisphere for Giumarra Cos., Vernon, Calif.
“It’s just like the clementines: When they were released, everybody was keeping an eye out for it and looking at it and hopeful for it, just like anything else,” Uchizono said. “With any new item, we’re all watching it. We’re all working under the proper protocols to deliver a nice, safe fruit.”
The first arrivals of Chilean navels were allowed into the U.S. May 7.
Getting those first shipments required nothing more than a bit of patience, said Tom Tjerandsen, president of the Chilean Fresh Fruit Association, San Francisco.
“The growers in Chile have met or exceeded all of the requirements for quite some time, and actually have been shipping to European customers and Canadian customers who have very stringent requirements,” Tjerandsen said. “It’s just that to get a protocol approved, particularly when there’s a changeover in administrations, no one is very comfortable approving something that may ultimately run counter to the current administration’s pronouncements.”
Tjerandsen said it was difficult to predict the volume Chilean growers would ship to U.S. markets this season.
“When the clementines were approved, I was asked that question. I had been to Chile the week before and was talking to a USDA inspector, and he said,based on their survey they thought around 750,000 boxes of clementines would move in the first year. I reported that. As it turned out, it went to 2.5 million,” he said.
The volume will depend on five factors, Tjerandsen said:
- The extent to which South Africa continues to have problems with labor, courts and weather;
- Australian volumes, which could be affected by unusually hot stretches of weather;
- The U.S. dollar, whose strength this year will enable U.S. companies to “aggressively compete” for fruit with other global competitors. “So oranges that may have been destined for Europe could be diverted to the United States,” Tjerandsen said;
- The extent to which domestic importers who have specialized citrus “feel comfortable developing a relationship with orange exporters in Chile to start this symbiotic process moving forward;” and
- How quickly the last of the domestic citrus is cleared from the U.S. market.
Chilean shippers expect to be supplying the U.S. market with ample volumes through the end of September, Tjerandsen said.
Although Chile will be a new player in the market, it should not take long for Chilean suppliers to catch up with established rivals from South Africa and Australia, Tjerandsen said.
“One advantage Chile has is they can combine shipments that can arrive with kiwifruit, pears, apples, so shared loads certainly do reduce the transportation costs,” he said. “That’s an advantage Chile has, in contrast to some of the other countries that don’t have quite the wide range of items to ship to the U.S.”
U.S.-based shippers say they are ready for Chilean fruit this year.
“It all depends on what kind of a package they send up here, which by all indications is going to be pretty good,” said J.B. Cutsinger, partner in Splendid Products LLC, Burlingame, Calif.
Jeff Miller, owner of Westlake Produce Co., Los Angeles, agreed.
He anticipates Chilean volume this year to the U.S. of up to 600,000 boxes of fruit, he said.
However, he said, it will be an important part of the summer citrus mosaic.
“When you add that on top of the 3.8 million or 3.9 million that’s going to come in from South Africa and Australia, there’s quite a bit of oranges to move,” Miller said. “But I think it’s going to be a good alternative, and I think it will sell.”
It’s another option for the consumer, said Tom Wollenman, general manager of LoBue Bros., Lindsay, Calif.
“What it does for the consumer is provide consumers almost a 12-month supply of navels,” he said.
Protocols must be met
David Mixon, chief marketing officer, Seald Sweet LLC, Vero Beach, Fla., agreed with the wait-and-see attitude of some shippers.
“Chile has to meet certain protocol, and that’s to be seen how smoothly that goes,” Mixon said. “They have to meet the same type of certification clementines must meet. Navels are more difficult. You have a product with mites out of Chile, and getting rid of mites in a navel or orange is difficult.
“The question is whether than can really take place. Fumigation can take place on arrival into the states. I’m of a real strong opinion there will be a lot of fumigated product from Chile.”
The more “certified pest-free fruit” that comes into the U.S., the better for Chilean suppliers, Mixon said.
Some clementines have been fumigated on arrival but, as we all know, the preferred method is not fumigation,” Mixon said. “Chile is working toward that, but that question still needs to be answered as they go through the certification process this year, how difficult it will be to meet those specs on delivery to the states.”
Mixon estimated the Chilean volume during the first season at 200,000 to 400,000 cartons.
“I think that you’ll see Chilean navels will start earlier and go longer than the South Africa and Australian programs,” Mixon said. “We feel the earlier and later windows will be good, but there will be opportunities to fill in gaps on the West Coast and East Coast and with Chilean navels that have not been traditionally been available to us. But, we feel there is room, without a doubt.”