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Retail prices for Floridian orchards shows grim pictureThe sixth annual Lay of the Land Conference, hosted by Coldwell Banker Commercial Saunders Real Estate, featured the growth-oriented nature of Florida. After the bust of 2008, the state is back on a growth track and the economy is heating up but the outlook for citrus doesn't look good.
Saunders told attendees that the picture for citrus was not pretty and it is showing up in the statistics. In only a decade, acreage has fallen from 580,000 acres to about 430,000 acres. Production is way off, and most telling, production per acre is off.
“In 10 years, we have seen round orange production fall from an average 342 boxes per acre down to163 boxes per acre,” Saunders said. “That is a 52% reduction.”
The report also noted break-even or negative cash flow groves are going at discounted prices. The University of Florida benchmarks the typical all-in production costs for processed oranges is $2,235 per acre. Given that, the break-even number for a grove would be 225 boxes per acre receiving $2.28 per pound solids delivered (assuming 5.86 pound solids per box).
Saunders said there is still hope and optimism that a solution will be found for greening, but until that time occurs, uncertainty will remain and it will be reflected in agricultural real estate.
Publication date: 4/21/2017
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