Citrus Production Costs: Can we get a handle on them?

June 18, 2015

Florida Citrus Industry Annual ConferenceBonita Springs, FL

Ariel SingermanAssistant Professor / Extension Economist

Citrus Research and Education Center (CREC)singerman@ufl.edu

(863) 956-8870

1) Impact of HLB on Citrus Operations in Florida

2) 2014/15 Indian River Cultural Costs of Production for Fresh Grapefruit

3) Economic Benefit of Citrus Health Management Areas (CHMAs)

Presentation Outline

Impact of HLB on Citrus Operation in Florida

• In March 2015 conducted survey during growers’ day at CREC

• Aimed at obtaining an estimate of the level of impact of HLB

• 76 participants who represented 156,614 acres – approximately 30% of total citrus acreage in the state

x<40 40≤x<60 60≤x<80 80≤x<100 1000%

10%

20%

30%

40%

50%

60%

3% 3%

13%

24%

57%

Percentage of Acres Infected with HLB

% Infected Acres

% R

espo

nden

tsEstimate the Percentage of Acres in your Operation

Infected with HLB

x<40 40≤x<60 60≤x<80 80≤x<100 1000%

10%

20%

30%

40%

50%

60%

3%

12%

21%

49%

15%

Percentage of Trees Infected with HLB

% Infected Trees

% R

espo

nden

tsEstimate the Percentage of Trees in your Operation

Infected with HLB

x<20 20≤x<40 40≤x<60 60≤x<80 80≤x<1000%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

8%

32%

47%

10%

3%

Percentage of Yield Loss Attributed to HLB

% Yield Loss

% R

espo

nden

tsEstimate the Average Percentage Yield Loss

Per Acre you Attribute to HLB

Region#

SurveysAverage Acreage

Total Acreage

Average % Infected

Acres

Average % Infected

TreesAverage % Yield Loss

Ridge 44 693 28,414 88 83 45Ridge/SW 11 1,962 17,655 90 74 37

SW FL 21 5,818 110,545 92 77 33 Total 76 156,614

Responses by Region

Cost of Production• Survey conducted in March 2015 at Indian River Citrus League

• 2014/15 Cultural cost of production per acre for growing Fresh Grapefruit in the Indian River region

• Other growers’ costs (management, regulatory and opportunity costs) not included

• Participants accounted for 44% of fresh grapefruit acreage in Indian River

2014/15 Indian River Cultural Cost of Production per Acre for Fresh Grapefruit

Weed Management196.6

8%

Coordinated Sprays14.75

1%

Fertilizer452.55

18%

Pruning 78.93%

Irrigation117.83

5%Canker Control

86.404%Tree Replacement

231.189%

Insecticides299.6012.09%

Fungicides240.009.68%

Nutritionals330.4013.33%

Ground Applica-tion

413.4016.68%

Aerial Application17.000.69%

2014/15 Indian River Cultural Cost of Production per Acre for Fresh Grapefruit

2014/15 Indian River Cultural Cost of Production per Acre for Fresh Grapefruit

(1) (2) (3) (4)    Cost Standard deviation    per acre ($) value -1 std dev. +1 std dev.Foliar Sprays   $ per acre    Insecticides 299.60 90.20 209.40 389.80  Fungicides 240.00 47.05 192.95 287.05  Nutritionals 330.40 91.77 238.63 422.17  Ground Application 413.40 51.75 361.65 465.15  Aerial Application 17.00 5.10 11.90 22.10Total Foliar Sprays Costs 1300.40   1014.52 1586.28

Fertilizer            Ground/Dry Fertilizer 267.00 180.69 86.31 447.69  Application Cost 20.60 6.18 14.42 26.78  Application Number   1.36 1.04 3.8  Fertigation/Liquid Fertilizer 151.20 77.10 74.10 228.30  Application Cost 13.75 8.75 5.00 22.50  Application Number   15.90 4.10 35.90Total Fertilizer Costs 452.55   179.82 725.28

Other costs (Weed mgmt., Pruning, etc.) 725.66   725.66 725.66Total Cultural Cost 2478.61   1920.01 3037.21

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

1,800

1,900

2,000

2,100

2,200

2,300

2,400

2,500

2,600

Indian River Cultural Cost of Production per Acre for Fresh Grapefruit

$ p

er a

cre

Source: University of Florida, UF/IFAS, CREC

0

100

200

300

400

500

0%

10%

20%

30%

40%

50%

60%

70%

Red Grapefruit Yield in Florida

Droppage Yield

Boxe

s per

Acr

e

Perc

enta

ge

Source: USDA-NASS

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

Indian River Cultural Cost of Production per Box for Red Grapefruit

$ p

er b

ox

Source: University of Florida, UF/IFAS, CREC

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

-10%

-5%

0%

5%

10%

15%

20%

Indian River Annual Percentage Change in Cultural Cost of Production for Red Fresh Grapefruit

Cost per box Cost per acreSource: University of Florida, UF/IFAS, CREC

Citrus Health Management Areas (CHMAs) Categories

Data

• Provided by grower that owns Valencia blocks in 2 different CHMAs• 5 blocks totaling 161 acres located in a “best” class CHMA• 6 blocks comprising 221 acres located in a “moderate” class CHMA

• Data over 4 crop years: 2001/02; 2008/09; 2012/13 and 2013/14

What is the Economic Benefit of CHMAs?: A Case Study Ariel Singerman and Brandon Page

Analysis Objective: To examine whether blocks in those 2 CHMA classes attained different levels of yield and, if so, to quantify the differential economic benefit

Analyzed data using regression analysis. Obtained:

1) Change in yield per acre through time

2) Change in yield by CHMA class: “best” vs. “moderate” class CHMA each year

Results

“Best” CHMA yield (boxes per acre):2012/13: 364 - 105 + 83 = 3422013/14 : 364 - 184 + 145 = 325

“Moderate” CHMA yield (boxes per acre):2012/13: 364 - 105 = 2592013/14 : 364 - 184 = 180

Discussion Differential gross economic benefit of “best” over “moderate” class CHMAs:

• differential yield x on-tree price per box = differential gross

benefit

2012/13: 83 boxes per acre x $8.60 per box = $714 per acre

2013/14: 145 boxes per acre x $8.40 per box = $1,218 per acre

Evidence that CHMAs can contribute to enhance the individual grower’s profitability at a time when margins are becoming increasingly narrow

Thank you for attention

My contact info:Citrus Research and Education Center

singerman@ufl.edu(863) 956-8870