The past year has been fraught with challenges for Florida growers, but producers are daring to hold onto a thread of optimism for 2007.
It’s been more than a year since the last serious hurricane swept through the state, but four major storms that devastated some of the Florida’s most productive growing areas in 2004 and 2005 still were wreaking economic havoc in 2006.
Citrus canker that sparked a ban on Florida products in five states also was shaking things up, while growers faced an uncertain future on the labor front and continued to deal with skyrocketing production costs.
On a more positive note, no major hurricanes struck the state this season; growing conditions, for the most part, have been good; and demand for Florida citrus remains high.
Hope also heightened for the implementation of some type of guest-worker program for immigrants as Democrats grabbed a majority in both the U.S. House of Representatives and the Senate in November. And, if things go right for growers, the 2007 farm bill might be expanded to include citrus and vegetable crops that were not listed in the past.
2005’s bad timing
The hurricanes that devastated parts of the state in 2005 and continued to affect the state in 2006 came just as growers were regaining their footing following a knockdown punch delivered by storms in 2004.
Hurricane Wilma, which attacked Gulf Coast and Indian River citrus Oct. 25, 2005, had a “dramatic and instant impact,” says Doug Bournique, executive vice president and general manager of the Indian River Citrus League, Vero Beach.
The storm wiped out 60 percent to 80 percent of the regions’ citrus at a time when the fruit was ripe, heavy and ready for picking. The crop was expected to be a “great rebound crop” following hurricanes Francis and Gene in 2004.
In the Indian River area, the grapefruit crop was expected to rebound to 20 million boxes for the 2005-06 season, but Hurricane Wilma kept the volume down to 8.2 million.
Citrus was not the only commodity to suffer hurricane damage.
“Tomatoes were a total disaster,” says Paul DiMare, president of DiMare Homestead Inc., Homestead.
Prices started out high last season because of hurricane losses, but as Florida production ramped up and supplies from Mexico and Canada hit the market, tomato prices plummeted.
With plentiful supplies remaining in the pipeline from California and Canada when DiMare started shipping tomatoes this season, the deal was “just fair,” DiMare said in late November.
Growers of other vegetables also were feeling the lingering effects of the bad weather.
“We suffered tremendously from the hurricane,” says Brad Cook, marketing manager for A. Duda & Sons Inc., Oviedo. “There was severe crop damage.”
The company’s Belle Glade operations were among the hardest hit. Duda suffered “significant” dollar losses to crops, including citrus, celery, radishes and corn. Some employee housing also was affected.
Cook said the hurricanes created challenging market conditions that were still being felt as the 2006-07 season got under way.
“Those four weather events have reduced supplies of Florida oranges and caused costs to go up,” says Bob Norberg, deputy executive director of research and operations for the Florida Department of Citrus, Lakeland.
Crops still are suffering the effects of the weakened trees, he says, and the state will not see a full crop this 2006-07 season.
As if four major hurricanes in two years weren’t enough, citrus canker is fanning the flames.
In June, the U.S. Department of Agriculture banned the shipment of Florida citrus to other citrus-producing states and territories, including Arizona, California, Hawaii, Louisiana and Texas.
“Grapefruit is a large commodity of ours,” Cook says, and the canker issue is another “big whammy” the company has to deal with.
Duda was one of the first growers to push and burn its crops. The canker posed some significant challenges, but it’s nothing the firm can’t recover from, Cook says.
Domestic and international consumers likely will have to pay higher prices for citrus products for years to come, Norberg says. And higher prices could translate to lower consumption.
“There’s continuing uncertainty as to what the effects of canker will be on the industry,” says Greg Nelson, president of DNE World Fruit Sales, Fort Pierce.
Greening, a bacterial disease that kills citrus trees, also has been reported in 12 Florida counties, and experts say it has the potential of becoming an even bigger problem than canker.
As of Nov. 29, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service reported that there were 301 square-mile blocks with at least one greening-infected tree.
Since greening just was discovered in the state in August 2005, it still is in its early stages and confined largely to south Florida, says Harold Browning, director of the University of Florida’s Citrus Research & Education Center in Lake Alfred. Growers have been urged to fight the disease by removing infected trees, carefully inspecting new nursery material and fighting the Asian citrus psyllid that transmits the disease. The disease is only transmitted by insects and is not carried by wind or rain.
It’s too soon to tell how much damage has been caused by greening, but some local growers have experienced a major impact, Browning says.
The university and USDA are working on the problem through their own programs and through cooperative efforts, Browning says. Applications have been submitted for research grants, and some funding has been redirected to address the issue.
Labor concerns loom
Labor supplies that already were tightening were further threatened when workers left the fields to help with reconstruction projects following the hurricanes.
“Right now, labor is adequate,” Nelson says. But the future remains uncertain.
Major changes are needed in U.S. immigration policy, says Mike Stuart, president of the Florida Fruit & Vegetable Association, Maitland. Though Florida has not been as hard-hit by labor shortages as, say, the California pear industry, growers eagerly anticipate new legislation.
“If there’s a provision to allow guest workers, that will benefit the industry,” Nelson says. “If there’s not a provision to allow guest workers, then it’s going to make it more difficult for harvesting labor in the years ahead.”
As the state’s crop volume returns to normal, “having adequate labor is definitely going to be a concern,” says Mike Sparks, executive vice president and chief executive officer of Florida Citrus Mutual, Lakeland.
The nation needs to maintain border security, he says, “but security without the ag jobs provision just doesn’t make sense.”
Costs on the rise
Cost hikes are yet another bugaboo growers have to deal with. DiMare says cost increases during the past year have been greater than any he has ever seen. Growing costs, production costs and overhead costs like fuel, utilities and insurance have “gone crazy,” and he says he doesn’t see that changing this season.
The state’s minimum wage has been increasing 3 percent to 4 percent a year, and growers face another 27-cents-per-hour increase in January, he says. An industry based largely on unskilled labor has seen a $5.15 minimum wage rise by $1.52 in less than two years, according to DiMare’s calculations.
DiMare says increased competition from imports and a poor trade policy with no duties or tariffs on incoming goods also add to growers’ woes.
Despite what seems to be a rather bleak picture in some aspects, industry leaders are remarkably optimistic.
The 2007 farm bill could be one bright spot in the year ahead.
A proposal championed in the House of Representatives by Adam Putnam, R-Fla., and others would add such specialty crops as citrus and vegetables to the list of five program crops that have been covered by the bill in the past, Norberg says.
“Passage of the farm bill is going to be a big key for us this coming legislative session,” he says.
As co-chair of the Specialty Crop Farm Bill Alliance steering committee, Stuart of the FFVA has worked with key House members to put together a package of recommendations.
“We’re not asking for direct subsidies,” he says.
Instead, Stuart hopes to see a bill that will help make growers more competitive, initiate more research, prompt increased investment in pest and disease prevention, increase participation in conservation programs, improve access to global markets, and provide more resources to help individual states and their agriculture industries.
The new provisions also would provide a vehicle for citrus growers and other specialty crop growers to get hurricane disaster assistance and marketing assistance, Norberg adds.
“We are optimistic,” he says.
More good news
Thanks to support from U.S. Agriculture Secretary Mike Johanns and other government representatives, growers were compensated for their losses from citrus canker so they could begin rebuilding their crops, Bournique of the Indian River Citrus League says.
In addition, as a lot of grapefruit gets diverted to the juice market, the USDA announced that it would buy the equivalent of 4 million gallons of grapefruit juice for domestic feeding programs.
“We’re elated that they’re going to do that because it takes a lot of the inventory off the shelf and will help grower returns,” Bournique says.
The entire industry is unified in obtaining funding for research on canker and greening, he says.
“We are hopeful that science, with adequate financial support from state and federal government and our industry, will come up with solutions to both,” he says.
In the marketplace, Florida’s vegetable crops were moving back up to speed, and lower citrus volume should mean higher prices.
Duda is back up to 100 percent on its vegetable production, Cook says, and he remains upbeat for both citrus and vegetables in 2007.
“We’re optimistic that it’s going to be a good year,” he says.
DiMare expected its tomato program to pick up after Thanksgiving when California and Canada got out of the deal, and Mexico was expected to start late because of bad weather.
This season’s smaller orange crop has driven up prices on juice oranges, and that will reduce the fresh volume, says DNE’s Nelson.
“The returns for orange growers this year will be very attractive,” he says.
Even though growers of tangerines and grapefruit have lost markets in citrus-producing states, the fresh grapefruit and tangerine markets appeared to be pretty firm in late November, Nelson said.
Prices inch upward
Although overall consumption may be down, the amount consumers pay for orange juice this season will be higher, says Norberg of the Florida Department of Citrus.
“That’s an indication, from an economic perspective, that demand for orange juice is still fairly good,” he says.
The state won’t get back up to 200 million boxes of citrus in the next year or two, says Sparks of Florida Citrus Mutual, but improving supplies coupled with strong demand bode well for the Florida industry.
“Now is when the growers needed to get a good return for their crop, as they’re putting those extra dollars right back into the grove,” he says.
The state is set to produce 26 million field boxes of grapefruit this season, compared with 19.3 million last season, Bournique says. And the quality should be worth bragging about.
“It’s a vintage-quality grapefruit crop that we haven’t seen the likes of in a long time,” he says.
“We’ve had our share of bad breaks, so we’re anxious to get a good year under our belts,” he says. “It looks like we’re starting down that path.” CVM