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MORE ON GRAPEFRUIT JUICE PRICES
While last month's article on this subject generated a little excitement, Falco Witkamp really stirred things up at the TCM Mid-Year Meeting when he quoted $1.20 per pound of grapefruit solids as a current price in Florida. When you multiply that price by 105-110 pounds of solids per ton of grapefruit processed, you can understand the excitement. Unfortunately, it isn't quite that simple. First, you should understand that the $1.20 quote is a current one-not a season-long average. Then, you should also know that Florida processors pack significant quantities of not-from-concentrate juice, which has a higher demand (and value) than concentrate.
To elucidate, Florida Citrus Mutual's Triangle in March estimates a preliminary season average on-tree price of $2.58 per box for processed grapefruit-that is only $60.71 per ton on-tree in Texas terms. Another point to remember is that most processors in Florida are independent, i.e., they buy the fruit for a cash price, then assume all risks or rewards of subsequent prices changes, since they own the solids, between processing and ultimate sale of the market.
By contrast, TCX is essentially grower-owned, so Texas growers assume the risks (or rewards) of price changes between harvest and sale, the latter of which won't finish until sometime next year. A continued decline in retail grapefruit juice sales (currently down 13 percent) could dampen the overall price picture. The mainstay of TCX's sales is bulk concentrate rather than retail, with no not-from-concentrate product.
In summary, the $80 per ton delivered-in estimate for Texas grapefruit is comparable to Florida's estimated $60 per ton on-tree value. Both are merely the best estimates from available data at the current time; the finals could go either way.
WATER TREATY ISSUE-
Many of you heard JoJo White's passionate discussion of the water treaty situation-as some would say, "he done good". Last month, I alluded to the opposite situation on the Colorado River (the one in Arizona, not ours). JoJo pointed out that Mexico receives a minimum of 1.5 million acre feet annually from that system, more if Hoover Dam exceeds a given level, even more if it starts spilling. Obviously, no one thinks that Mexico would jeopardize that water in exchange for keeping this water.
The situation is a little clearer. According to their interpretation of the treaty, Mexico has 30 months left (in the second five year cycle) to make up the deficit from the first five-year cycle and to comply with the required releases for the current five-year cycle. If you think about it, you might conclude that Mexico's water officials are playing the odds here, i.e., there is always the chance of a hurricane refilling the reservoirs (remember, there are three more hurricane seasons before the current five-year cycle ends in October, 2002). If that happens, the deficits are automatically erased. If not, Mexico would have to make up the entire deficit by October, 2002. Meanwhile, Mexico stockpiles water that would help attenuate the irrigation problems in the Valley. (For the record, it would require release of about 2,500 acre feet per day or 75,000 acre feet per month from now to October, 2002, just to make up the deficit and satisfy the 350,000 acre feet per year allocation to Texas-not counting releases to satisfy Mexico's needs from the Rio Grande.)
The opposing argument, however, is that there should not have been a deficit in any year or either five-year cycle since 1992, under the terms of the treaty-since there has been no extraordinary drought. Ergo, all of the deficit should be made up without delay and the annual releases of 350,000 acre feet should be made on time.
As in all such matters, there are two opposing factions so it will have to be resolved at levels higher than those directly involved. Hopefully, the efforts of some Texas congressmen will spur the State Department of the Clinton administration to take decisive action on the matter. Currently, JoJo White, Ray Prewett and others are in Washington to meet with various congressmen, the IBWC and the State Department to explain the issue and spur action.
According to news reports of March 31 which were attributed to Congressman Solomon Ortiz, Mexico had agreed to release 140,000 acre feet of water in the next few days. That's about 10 percent of the current deficit and would be welcome, even though it represents only about a two-week supply during the peak irrigation season that is just commencing.
The fact is that no such agreement apparently exists. In fact, Mexico did transfer ownership of 41,000 acre feet of water to Texas over the weekend. What that means is that Mexico's share of water in the two international reservoirs on the Rio Grande was decreased by 41,000 acre feet and Texas' share increased by 41,000 acre feet. That's water already in storage-not new water.
Stay tuned, as this situation is not going to go away.
LEAF LOSS RELATIONS-
John Fucik talked about hedging and topping at last month's TCM Mid-Year Meeting. While I won't get into that subject at this time, John presented some information on the effect of leaf loss (from pruning) on yield that caused me to think about the potential effect of leaf loss from greasy spot disease. Basically, my comprehension of John's data is that there is a near-linear relationship between leaf loss and yield reduction, i.e. the greater the leaf loss, the lower the yield. While pruning also removes twigs and wood, I believe he showed the same effect from artificially causing partial defoliation without wood or twig loss.
Either way, the fact is that the life of a citrus leaf in supposed to be about two years, given no insect or disease problems that result in its premature defoliation-and therein lies the point of all this. Greasy spot has progressed from a non-problem 20 years ago to a major cause of premature leaf loss today. While there are some interesting opinions as to why greasy spot is so serious today, the fact is that too many growers fail to recognize the yield reduction that results from severe greasy spot infection, thus many growers fail to implement a systematic program to control the disease.
Control will not be achieved by a single treatment, nor is it likely to be attained adequately in a single season. Even in the case of a grove that is fairly well isolated from others, I would expect good control to take two years of treatment in advance of the normal May, July and September major infection periods.
Available control materials include copper, oil, BenlateŽ and EnableŽ. None should be used twice in succession, as the organism causing greasy spot can develop resistance rather quickly.
Fresh navel orange volume for the 1999-00 season closed up 21.1 percent above last season, while fresh early oranges were up 8.1 percent. The combined production of 63,400 tons of early and navel oranges was nearly 15 percent higher than the December, 1999, revised estimate of 55,000 tons. Because of the greater volume of early and navel oranges, Valencia movement is about 28 percent behind last season, but should pick up rapidly in the next few weeks.
Fresh grapefruit shipments are 4.6 percent ahead of last year, but only about 10 percent of estimated production remains to be harvested. Processed grapefruit utilization is up 22 percent, perhaps reflecting greater problems with sheepnosing and other grade-lowering factors.
Because of the lower supply of grapefruit, most packinghouses anticipate a late-April closing. A couple will probably finish in early May. Prices for fresh and processing fruit are holding very well, so most growers should see good returns for the season.
As harvest of the 1999-00 crop is rapidly winding down, more attention is being paid to grove operations for the new season. The bloom this season is again erratic-some grapefruit bloomed and set nicely in late February, others have barely achieved marble-sized fruit from a more normal bloom in mid-March. Some just haven't bloomed well at all.
Where late season rust mites were a problem, growers should anticipate an early infestation of the new crop, especially on fruit that set in February. I have observed some of those early fruit to be silvery from mite feeding.
The hoped-for rains that were forecast over the last week just did not materialize, so irrigation is becoming a high priority operation. Considering that some groves have already been irrigated at least once this season, a second irrigation in the near future could deplete available allocations before we even get to summer. Still, it is better to set the crop with good moisture now and hope for the best (rainfall or another allocation) to size it and mature it.
JULIAN W. SAULS, Ph.D.
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