OBSERVATIONS ON THE BRAZILIAN CITRUS INDUSTRY – June 2013

Presented by: Thomas Stopyra, Certified Crop Advisor Presented at: Southwest Florida Research & Education Center Presented on: September 26, 2013

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DISCLAIMER

The following report is based on data gathered from a variety of sources and is the personal opinion of the author and should not be used as a basis for buying, selling or speculating futures or any other business decisions regarding agricultural enterprises or commodities.

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SÃO PAULO - The Engine That Drives Brazil

SÃO PAULO

• 95,000 sq. mi (12th largest)

• 42 million people (1st)

• $614 billion GDP (33% of total)

FLORIDA

• 65,000 sq. mi (22nd largest)

• 20 million people (4th largest)

• $754 billion GDP (5% of total)

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INTRODUCTION AND OUTLINE

• Crop Estimate

• Contracts

• The Law

• Psyllid Control

• Overall Tree Numbers

• Rootstocks

• Cultural Practices

• Varieties

• Conclusions

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CROP ESTIMATE FOR 2013

• Harvest begins in May and ends in January

• Estimates vary from 230 – 280 million 90 lb. boxes

• Reduction of 100 million boxes from last year (± 25%)

• Spot Market for early oranges is US$ 3.00 per box

• Harvesting costs have increased to ±US$ 2.00 per box

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CONTRACTS & CONSUMPTION

• World Consumption of orange juice has declined

• Processors prefer juice oranges with a ratio of 13 and a minimum of 11.5° Brix

• Grower is not paid based on pound solids – contract is negotiated for a fixed price per box

• No incentive to plant rootstocks that might improve quality, or varieties that may have higher solids, or better fertilizer sources

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RESULTS OF GROWING POOR QUALITY FRUIT

▪ After two bumper crops in a row (2011 – 400 million boxes; 2012 – 360 million boxes) and a reduction in world consumption; the tank farms are full

▪ The processors have refused to accept Hamlin oranges for the second season due to low ratios and poor color

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THE GREENING LAW

▪ October 16, 2008 the Brazilian Ministry of Agriculture published IN-53 requiring citrus growers to adopt prevention and eradication measures

1) Citrus nurseries are subject to sampling and inspection, young trees grown in screened houses and contaminated material to be destroyed

2) Growers must perform semi-annual inspections and destroy symptomatic trees – no compensation

3) Growers must submit an official report twice a year to the State Organization for Plant Sanitation for future field confirmation

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PSYLLID CONTROL

▪ Growers that have been vigilant in conducting inspections and removing infected trees have a difficult time slowing down the infection rate

▪ A marked increase in the number of insecticide sprays from 24 about 2 years ago to 36 + 4 aerials

▪ Tractors travel at 4-5 MPH achieving mediocre coverage – lots of escapes and repeated failures

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PRODUCTS LISTED FOR CITRUS FRUITS (IPM)

Agri-Mek, Assail, Azadirect, Abound, Dipel, Baythroid (cyfluthrin), Capture, Applaud (buprofezin), Mustang, Lorsban, Carzol (formetanate HCl), Copper products, Plover (difenconozole), Micromite, Dimethoate, Sulfur, Spintor, Envidor, Vendex, Portal, Danitol, Cascade (flufenoxuron – Benzoylurea), Aliette, Imidan, *Imazalil, Admire Pro, Horticultural Spray Oil, Headline, Nexter, Comite, Folicur, Confirm (tebufenozide), *TBZ, Actara, Gem 10

OVERALL TREE NUMBERS

▪ A recent estimate from the Agricultural University at Piracicaba, SP cites a total of 200 million citrus trees in the major producing area of São Paulo & Minas Gerais

▪ Unofficial estimates in 2011 calculated the number at 170 million + 25 million non-bearing

▪ Due largely to losses from HLB and other diseases that number is probably closer to 150 million today

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ROOTSTOCKS

▪ Many non-irrigated high density plantings are on 3 or 4 different rootstocks: Swingle citrumelo (4475); Sunki Tangerine; Rangpur lime; Interstock of Sunki on Swingle

▪ The Interstock is used to circumvent the incompatibility between the mid-season Pêra orange and Swingle

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Cultural Practices

▪ Trunk drenches are used during the first year (neonicitinoids)

▪ Symptomatic trees are quickly removed and psyllid sprays are done every 10-15 days

▪ Ridomil is not registered for citrus

▪ Phosphites, of varying quality are available and tank mixed with nutritionals – often using chloride based micronutrients

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SHIFTS IN PRODUCTION & VARIETIES

▪ Medium and smaller size grove owners in the area near Araraquara have switched to sugar cane, peanuts, rubber trees or soy beans

▪ Large growers continue to plant Hamlin, Pêra, Valencia & Natal oranges

▪ Specialty varieties include Poncans, Murcotts, and Lima (acid less orange).

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The Problem with Hamlin oranges

▪ Processors have refused to accept low brix, low ratio early oranges

▪ Net result for a grower with 20% of his acreage in hamlins would be a 25% increase in production costs since he had already invested in caretaking and failure to harvest will reduce next years crop

▪ No real citrus alternative

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CONCLUSIONS

▪ 36-40 Insecticide sprays per year is not sustainable

▪ Some Brazilian citrus companies have successfully reduced the infection rate through frequent inspections and rouging in isolated areas

▪ Disease has a long latency period and there are no resistant varieties makes the Inoculum Reduction Strategy difficult and expensive

▪ Alternative of “living-with” HLB has been confounded due to excessive leaf and fruit drop prior to harvest

▪ Risks associated with monoculture are well known and there are many historical examples

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EPIDEMICS AND MONOCULTURE

▪ 1840’s Irish Potato Famine due to susceptible host, presence of the pathogen Phytophthora infestans and conducive environment

▪ Southern Corn Leaf Blight 1970 in US corn belt – Helminthosporium maydis ($2 billion in losses)

▪ Grape Phylloxera 1860 in France and 1980 in California; caused by the grape louse (Daktulosphaira vitifolia) North American wild grape vines planted as a resistant rootstock

▪ Papaya Ringspot Virus 1990’s in Hawaii; transmitted by an aphid the plants have chlorotic symptoms – Dennis Gonsalves developed the ‘Rainbow’ variety in 1999 one of the first successful uses of a GMO in US

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THE PARADOX (Brazil vs. Florida)

Unanswered questions about the Brazilian Model:

▪ Empirically quantify the minimum number of inspections, sprays, planting density and expected tree losses during each of the first 3 years

▪ Is resetting feasible?

▪ Life expectancy of the grove; how long is long enough?

Unanswered questions about “living-with” HLB:

▪ What was the root cause of the excessive leaf and fruit drop?

▪ What are the effects of stress?

▪ What is the basis for adjusting mineral nutrition?

▪ What is the role of exogenous plant hormones?

▪ What is the role of SAR inducers?

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NEW PRODUCTION SYSTEM

Develop in conjunction with extension personnel, regulators and researchers an integrated cropping system that would include:

1) Nutritional therapies

2) Exogenous applications of plant hormones

3) Root enhancement

4) Anti-microbial applications

5) Systemic acquired resistance

6) Inoculum reduction through frequent inspections and rouging of infected trees the first 2-3 years

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REMEMBER NEVER POKE A PANTHER WITH A SHORT STICK

Photo by:

John Hoffman

Barron Collier Groves

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ACKNOWLEDGEMENTS

▪ Mike Garavaglia - Packers

▪ Chris Reynolds - Packers

▪ Rick Vachon - Packers

▪ Mongi Zekri – U/F

▪ Gene Albrigo - CREC

▪ Leonardo De Carli – Syngenta

▪ Helton Leão – Citrosuco

▪ Justin Cain – Chemical Dynamics

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COMMENTS OR QUESTIONS

▪ Tom Stopyra

tstopyra@packerscitrus.com

772-216-4764 (cell)

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