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Diving overview:
- Alico Inc, one of the nation’s largest orange growers, recently announced it was exiting the citrus industry after seeing its Florida production devastated by hurricanes and years of rampant plant diseases.
- The company, a supplier to Tropicana, said it would not spend any more capital on its citrus operations after the current crop is harvested in 2025. The company’s Alico Citrus division, with a citrus acreage of nearly 3,500 acres, will immediately cut most of its production workforce. It is managed by a third party administrator.
- Alico said it will transform into a diversified land company and expects to sell or lease most of its acreage to agricultural operations. Some of the land will be sold for commercial and residential development.
Dive Insights:
Hurricanes and persistent plant disease Citrus greening has decimated production and forced growers to rethink their future in Florida, once the leader in U.S. orange production.
The U.S. Department of Agriculture said Florida’s orange harvest is expected to be the lowest in 100 years. Hurricane Milton was a major setback to growers’ efforts to make progress against the threat of citrus greening.
Alico has seen its citrus production decline by about 73 percent over the past decade, even though the company has invested significantly in treating the disease. Due to the additional impact of recent hurricanes, the company “has concluded that growing citrus in Florida is no longer economically feasible,” John Kiernan, Alico’s president and CEO, said in a statement.
“We have explored all possible options to restore our citrus business to profitability, but long-term production trends and the costs required to combat citrus greening no longer support our expectations of a recovery,” Kiernan added.
Alico expects 75% of its land holdings to remain focused on agriculture in the “near future,” according to the statement. The company owns approximately 53,370 acres of land and approximately 48,700 acres of oil, gas and mineral rights in Florida.
High costs in the citrus industry have caused many suppliers, and not just in Florida, to reconsider their investments. Limoneira, a California-based avocado and lemon producer, has sold thousands of acres to pay off debt, and the company plans to transform itself into a citrus marketer and seller rather than shoulder harvest costs.
