VOL. 21, NO. 3
IN THIS ISSUE:
The 24th Mid-Year Meeting of Texas Citrus Mutual is set for March 29 at the TAMU-K Citrus Center. Pre-registration electronically is available through March 23 at http://www.valleyag.org/e-Weekly%20Newsletter/2007/EWEEKLY_Newsletter030207.pdf; the cost is $30 for TCM members, $35 for non-members. On-site registration commences at 7:00 am, with breakfast to follow; however, there is no assurance of meals for those who register on-site.
What’s on the agenda? For openers, there’s a panel presentation on citrus greening disease, followed by a panel of researchers updating their programs. There will be status reports on the budwood program, possible water legislation, value-added, and the current legislative session. The keynote address will feature immigration reform, but I don’t have the name of the speaker as yet. There will be a short TCM business meeting and preliminary discourse on plans for TCM’s 50th Annual Convention. Adjournment should occur a little after 3:00 pm.
FCOJ AND THE FRESH MARKET—
The price of FCOJ has returned to record highs, with futures trading last Friday in the $2.08 range. The California freeze in January is not responsible for these high juice price levels, contrary to what appears in the media.
A lot of factors go into establishing the price of orange juice, one of which is the available volume of fresh oranges. Certainly, the diminution of the supply of California fresh oranges has been important, as it forces consumers to increase their reliance on orange juice or switch to other fruits.
However, that’s only a minor part of the picture. Remember, FCOJ futures prices were already in the $2.00 ballpark before the California freeze because Florida’s industry is still not up to par in terms of orange production, most of which has traditionally been grown for the juice market. In addition, production in Brazil—the world’s largest producer of FCOJ—is down also.
Did Florida producers try to move more oranges into the fresh market rather than into their traditional juice market? Certainly, one would like to think that were so, but the reality may be a little different from the perception.
Some Florida growers make the conscious decision to manage their groves for the fresh market, which requires a higher level of production inputs (in anticipation of a higher level of returns) to produce fruit that is of marketable external quality. Any fruit that fails to make grade is eliminated to processing, just as it is here in Texas.
The vast majority of Florida orange growers, however, forego the higher production costs required to produce fresh fruit in favor of the juice market. Because the level of pest management is reduced, the fruit often does not have the necessary external quality required in the fresh market. Even so, if a juice grove has a high enough percentage of marketable fruit and if the economic situation is sufficiently favorable as to justify running it through a packinghouse, then one would surmise that it would be done.
The weather has more or less returned to normal for the season, so blue skies and warming temperatures have brought on the awaited spring flush. Navels and round oranges are popping all over, but grapefruit is still in the future. Navel bloom should be full this week, with round oranges to follow in a few days.
Soil moisture is quite good going into the flush, owing to some good winter rains and the cooler conditions of the last couple of months. Too, given the general temperature conditions over much of the last couple of months, the bloom that’s coming should be intense and concentrated into a short time frame, with little or no staggered bloom.
That should be a remarkable contrast to the current season in which there has been an awful lot of off-bloom grapefruit. Fortunately, almost all of that fruit is eliminated on the grading line. However, too much off-bloom fruit can be a problem at the processing plant, and it results in a lower solids yield which in turn reduces juice returns.
With improving weather, growers and grove care companies are in full swing with spring grove practices. After all, next season’s crop will be set by the time we finish harvesting this one.
The industry is still below average for all fresh utilization, with season to date shipments of 97.6 percent of last season and 95.5 percent of the seven-year average. In the main, the shortfall is grapefruit exports, which just have not measured up to prior volumes.
Domestic grapefruit shipments are pretty close to normal, while early orange shipments are substantially above the norm. Navel oranges, however, were down rather dramatically this season.
Another thing to consider: the volume of fruit processed this season already exceeds the total that was processed all of last season. At the moment, the processed volume is up some 164 percent over the same time last season.
There’s still not much change in water levels, as the U.S. share is holding steady at about 75 percent of conservation level, while Mexico’s share continues at about 45 percent of conservation level. Basically, the lack of change indicates that utilization over the last few months has been offset by inflows that have been just barely enough to maintain the status quo.
The situation should change this month as crop irrigation shifts into high gear for the spring. With any luck, irrigation and other usage between now and June will be replaced with new inflows into the reservoirs. If not, the crunch will come later—when citrus will still need water while the major irrigated acreages will have been harvested.
THE CALIFORNIA LOSSES—
The losses to California citrus have been a big question mark, with few reports suggesting that the original 70 percent may have been too high, especially with regards to Valencias. So, just how much crop loss was there? The USDA updated or revised citrus crop estimate for this season will be released Friday morning, with special emphasis on the California reduction.The Texas orange crop estimate has also been reviewed, so there might be some change here, as well. Both should be interesting.
JULIAN W. SAULS, Ph.D.
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