Mother Nature dealt a harsh blow to Florida last year when a spate of hurricanes caused waves of devastation to the citrus industries. Citrus was one of the industries most severely hit by the hurricanes, with three of the four storms directly affecting orchards.
When the hurricanes initially hit, many marketers believed that it would take years before the industry fully recovered. However, despite the recent turmoil, exporters and associations remain optimistic about the future of the Florida grapefruit industry.
Many are certain that the yellow spherical fruit will continue to find favour in the UK and exporters reported higher prices in early 2005. According to the United States Department of Agriculture (USDA), Florida is on course to produce 13m 85lb cartons of grapefruit in 2004/05.
This season’s crop is the lowest since the 1935/36 crop of 11.5m cartons and represents a huge 70 per cent downturn from the state’s average production of 42m cartons achieved over the past three seasons.
Florida’s orange volumes are also much smaller, with the latest figures from the USDA estimating a crop of 168m cartons, down 4.5 per cent from the original forecast in October. Florida oranges, which are set to gain Protected Geographic Status following the recent spat between the EU and the US, are rarely exported fresh, with 95 per cent of fruit sold to juicers.
According to the Florida Department of Citrus (FDOC), exporters are on course to ship 500,000 cartons of grapefruit to the UK this season. Last season 818,000 cartons landed in the market.
“The UK is one of Florida’s top three export markets and despite the hurricanes, the area will receive a disproportionate market share of volumes this season,” says the FDOC’s Mike Yetter in an exclusive interview.
And in terms of retail promotions, it is business as usual. “We will maintain the same level of promotional activities such as retailer promotions and consumer samplings,” Yetter notes.
While the 2004/05 season will inevitably be hampered by lower volumes, the FDOC claims that volumes are expected to rebound in the near future.
This season’s Florida grapefruit crop is down 50 per cent but as fresh fruit achieves the best returns, juice will take second place as exporters focus on their number one priority.
According to marketers, white grapefruit was hit much heavier than red, with white volumes falling as much as 80 per cent. Coloured grapefruit casualties were still significant, with 60 per cent of the crop affected. The area most severely hit was the Indian River, located in the east coast of the state, which lost around 85 per cent of its grapefruit crop.
“The Gulf region lost 0-20 per cent of its crop depending on the grove location and the interior region lost about 50-60 per cent,” says Paul Genke of the Packers of Indian River.
“Considering all that has happened here this season we are doing well,” Genke says. However, he concedes that adjustments will have to be made this season due to the smaller supplies and inevitably higher prices.
“We are going to maintain volumes to all of our markets this season. All of them are important and when supplies return to normal we will need all those markets,” Genke says.
The peak shipping period for Florida to the UK is generally late January to March.
Given the lower volumes available this season, Florida’s rivals could steal a lead in the UK market, analysts believe. “Competition will come from the Mediterranean region and lower prices and supply may entice some buyers to switch to these suppliers. Volumes will be limited and prices high so part of the competitiveness has gone away,” Genke notes.
However, he notes that the quality of Florida grapefruit is second to none, and coupled with strong retail support in the UK, it would be foolish to write off the Sunshine State so quickly.
Florida’s main competitors are Turkey, Israel and Cyprus but the unique conditions that Florida grapefruit is grown in produces a premium quality fruit.
“Florida growers produce fruit in a sub tropical climate and in sandy soil,” notes Yetter. “We produce extremely good fruit and I believe Florida grows a much better product that is much juicier, heavier and better value than our rivals. Our biggest advantage is the product itself.”
According to Genke, the UK is a more demanding market in terms of quality and food safety programmes. However, he also notes that the UK is more progressive and other markets are starting to make the same demands.
It takes some 7-10 days to ship Florida grapefruit to Europe and exporters have noted a slight increase in sea freight rates. However, one factor that should work in Florida’s favour this season is the weak dollar. “The weaker currency has been good for our exporters who have reported very firm prices,” Yetter says.
Genke notes that over the last 5-7 years there have been significant changes in the industry. “The amount of shippers and importers have decreased quite a bit and there are fewer packers and growers in Florida,” he says.
However, given the popularity of grapefruit, the key is volumes. “If you have fruit to supply you will be successful,” Genke claims.
Mr Yetter believes that growers who exit the citrus industry will do so not because of hurricane damage but for rather more pragmatic reasons. “In the last few years, we’ve seen a significant increase in the value of real estate so there may be some attrition as some growers sell off their land,” he notes. “But you do see new groves being planted all the time around here, it’s a continuous process.”
When asked about the future of the grapefruit industry, marketers remain optimistic. “Florida grapefruit already has an average 30 per cent market share in the UK and this could rise even higher in the future,” Yetter says.
And while European competitors will always have the advantage of being closer to the UK market compared to their US counterpart, technological developments could enhance Florida’s performance.
According to Yetter, some mechanical harvesting initiatives exist. These are currently geared towards the juice sector and are at an infancy stage. However, should these prove successful, growers are hoping that they could be adapted for the fresh fruit market.
“We’re looking at shakers - machines that shake the trees and catch fruit,” Yetter says. However, he noted that these machines do cause some bruising and that robotic pickers may work better for the fresh fruit sector.
“The pickers are a more gentle way of harvesting fruit and in the long term could make the industry more competitive by enabling it to operate more efficiently.”
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