A year ago, citrus growers were being offered less than a dollar per pound solids for their fruit as a result of excessive imports and high Florida orange juice inventories. We had a real problem on our hands, and it was clear one of Florida Citrus Mutual (FCM) and the industry’s highest priorities was to help get excess juice through the pipeline to put upward pressure to increase grower returns.
Here’s what I wrote then, and it summarizes the tone of the industry:
“Many grower contracts with processors are NOT being extended. This has created a wave of uncertainty throughout the industry. It is expected that 12 million boxes may not be harvested this season. This is a horrific situation for Florida’s signature agricultural crop. Growers returns could be way below what it costs to grow a crop. I’ve heard processors are offering a nickel below the futures price — that is less than a dollar!”
FCM Took Action
Consequently, we aggressively pursued USDA orange juice purchases through the Trade Mitigation and Section 32 programs by using our long-standing relationships with the Florida Congressional delegation and USDA administrators. FCM’s hard work resulted in great success. During the season, the USDA agreed to buy more than $126 million worth of OJ totaling about 30 million pound/solids (ps). Coupled with fewer imports from Brazil and Mexico, a huge retail boost supplied by the COVID-19 pandemic and Florida Department of Citrus retail promotions, USDA orange juice consumption is expected to be up 10% over the 2018-2019 season. Orange juice inventories have been significantly reduced.
Pandemic Boosted Sales
Of course, COVID-19 cast a long shadow on everybody during the year. And although our citrus growers and industry would never hope for a global pandemic, the silver lining is that people remembered how good orange juice is to help boost the immune system. They also started hoarding household staples, and this trend helped.
As we head into the 2020-2021 season, grower returns are on the rise, and processors are now offering contracts upward of $2 ps, and with a smaller Florida crop those figures should rise. FCM is proud to be part of this 2019-2020 success story, and it really gets to the heart of what we do and how we get it done.
We were due for something to turn our way; it’s unfortunate it was in the form of COVID-19. Now the challenge for 2020-2021 is to sustain the momentum and keep orange juice top of mind with consumers for its health benefits and great taste.
2020-2021 Season Projects
In addition, several state and federal projects will continue for FCM into the 2020-2021 season:
- Securing federal appropriations for HLB-related research activities.
- Helping implement new and improved citrus crop insurance options.
- Supporting improvements to the H-2A program.
- Providing guidance and direction of grower payments from the Florida Citrus Recovery Block Grant.
- Pursuing appropriations for the industry from the state Legislature, which is expected to be a heavy lift with the budget being impacted severely by COVID-19.
- Monitoring imports from Mexico to keep our industry viable in a complex, global environment. A dumping challenge, a potential tariff, and a quota system are all on the table.
As citrus growers and the industry continue the fight against HLB and adjust to an ever-changing marketplace, FCM is focused on programs that support strong grower returns. The goal is to provide an exceptional return on investment to grower members.