Current Economics of Citrus Production

Citrus ExpoAugust 17, 2016

Fort Myers, FL

Ariel Singerman

Assistant Professor / Extension Economist

Citrus Research and Education Center (CREC)

singerman@ufl.edu

(863) 956-8870

1) Costs of production for processed oranges SW Florida in 2015/16

2) Understanding growers’ participation decisions in CHMAs

3) Summary

Presentation Outline

Cost of Production in Southwest Florida 2015/16

• Survey conducted in Spring 2016

• Estimates for Cost of Production per Acre for Processed Oranges

• 13 participants accounted for approximately 41,000 acres (16% of citrus acreage in the SW)

2015/16 Cultural Cost of Production per Acre

for Processed Oranges in Southwest Florida

Source: University of Florida, IFAS, CREC

1Irrigation includes: pH management, maintenance and repairs to emitters, clean ditches, ditch and canal maintenance, water control

Costs represent a mature grove (10+ years old) including resets

Cost per

acre ($)

Weed Management 210.09

Foliar Sprays 611.62

CHMAs Sprays 17.96

Fertilizer 454.18

Pruning (topping, hedging, chop/mow Brush) 49.83

Irrigation1 180.88

Total Cultural Costs without Tree Replacement 1524.55

Tree Replacement (9 trees) 385.70

Total Cultural Costs with Tree Replacement 1910.25

Weed Management210.09

11%

CHMAs Sprays17.96

1%

Fertilizer454.18

24%

Pruning 49.83

3%

Irrigation180.88

9%

Tree Replacement385.70

20%

Insecticides183.95

10%

Fungicides99.73

5%

Nutritionals165.91

9%

Ground Application

133.117%

Aerial Application28.92

1%

Foliar Sprays611.6232%

2015/16 Cultural Cost of Production per Acrefor Processed Oranges in Southwest Florida

Source: University of Florida, IFAS, CREC

2015/16 Cultural Cost of Production per Acre

for Processed Oranges in Southwest Florida

Source: University of Florida, IFAS, CREC

248 234

120163 150

487

32

198210184

100

166 162

454

50

181

0

100

200

300

400

500

600

$ p

er

ac

reCost of Production for Processed Oranges in SW Florida

by Program, 2014/15 vs. 2015/16

2014/15 2015/16

2015/16 Total Cost of Production per Acre

for Processed Oranges in Southwest Florida

Source: University of Florida, IFAS, CREC

Cost per

acre ($)

Total Cultural Costs 1910.25

Other Costs Interest on Operating (Cultural) Costs 95.51

Management Cost 131.24

Property Tax/Water Management Assessment 28.73

Interest on Average Capital Investment 162.25

Total Other Costs 417.73

Total Costs 2327.98

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

$ p

er

acre

Processed Oranges in Southwest Florida:Nominal Cost of Production

Cultural Cost Total CostSource: University of Florida, CREC

CHMAs: Understanding Grower’s Participation

In 2015 presented case study data-> CHMAs can contribute to enhance growers’ profitability

• In 2015 there were 55 CHMAs but only 19 were active

• Even for active CHMAs -> no data on participation

• Conducted a survey during the Florida Citrus Growers Institute

to gather data on CHMA participation

Source: University of Florida, IFAS, CREC

CHMA Participation

CHMANon-participant

38%

CHMAParticipant62%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

<20% 21to50% 51to75% 76to99% 100%

%Respondents

%ofTimeParticipatinginCHMASprays

Source: University of Florida, IFAS, CREC

Level of Participation in CHMAs

Neighbors do not

participate

Too much effort to coordinate

It is too costly No longer useful to spray for ACP

Prefer to spray in my own timing

Plan exiting industry soon

Benefit (yield) not worth it

References: Disagree Somewhat Agree Agree

1 2 3 4 5

Non-CHMA Participants: Reasons for not Participating in CHMAs

Source: University of Florida, IFAS, CREC

CHMA Participants: Obstacles to Increase CHMAs Effectiveness

References: Disagree Somewhat Agree Agree1 2 3 4 5

Source: University of Florida, IFAS, CREC

Neighbors do not

participate

Too much effort to coordinate

It is too costly to spray

Decreasingly

effective to spray for ACP

Benefit (yield) decreasing

7%

3%

21%

17%

53%

0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500%

1

2

3

4

5

16%

16%

42%

18%

7%

0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500%

1

2

3

4

5

16%

27%

33%

13%

10%

0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500%

1

2

3

4

5

27%

19%

38%

13%

5%

0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500%

1

2

3

4

5

16%

11%

38%

30%

6%

0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500%

1

2

3

4

5

Spike in ACP Counts

Factors that could have contributed to the spike :1. Lower profitability of citrus production –> reduction in inputs (i.e.: insecticides)2. Long and late bloom period –> reduction in sprays to avoid spraying pollinators3. Higher vegetative growth –> New flush4. Very wet year –> insecticides less effective5. Approval of bactericides –> are growers substituting insecticides with bactericides?

0

5

10

15

20

25

30

35

40

2011/12 2012/13 2013/14 2014/15 2015/16Avera

ge N

um

ber

of A

CP

per

Blo

ck

CHMA 1 CHMA 2

Thank you for your attention

Ariel SingermanCitrus Research and Education Center

singerman@ufl.edu(863) 956-8870

www.crec.ifas.ufl.edu/extension/economics