Florida Citrus Mutual President Faces Down Challenges

Seeking Solutions

In challenging times, industries need strong representation from cooperative organizations to speak on their behalf with a unified voice. In citrus, Florida Citrus Mutual (FCM) fills that role, along with other regional associations. To say the citrus industry is facing challenges these days would be an understatement.

Serving as FCM’s current president, Fran Becker says that being actively involved in organizations like FCM is critical to effectively address the issues facing the industry. Growing up in citrus, Becker is passionate about preserving the way of life provided by the fruit that is synonymous with Florida.
“Like anything else, I think you get out of this industry what you put in,” he says. “It is really important to stay involved, especially in my job, because I deal with growers every day.

“Our family has done well in citrus, and we are lucky to live and work in Florida. That is why it is important to keep this industry viable, so I can pass that tradition down to my son. I know many others feel that same way.”

Top Of Mind

There is no question that citrus greening is the top issue that FCM is focusing on due to the fast and devastating spread of the disease. To underscore its importance, $20 million was earmarked for greening research this year.

“When you throw that much money and talent at something, you expect to see results,” Becker says. “As growers and an industry, we want to see results immediately, but it doesn’t happen overnight, so we have to be patient. However, we are very hopeful for positive results.”

Becker sees the removal of abandoned groves as a critical aspect in containing citrus greening and canker. Research has shown that the psyllid — the greening vector — will move from abandoned groves to commercial ones, potentially spreading the disease far and wide.

“At FCM, we feel very strongly about abandoned groves and have had a special committee working on this for more than a year,” he says. “It has been a tough issue because we kept stumbling on private property rights and not wanting to infringe upon them. But, we realize this is an issue that must be addressed, so we are trying to come up with ways to encourage property owners to remove or kill the abandoned trees.

“The USDA abandoned acreage estimate of nearly 132,000 acres was helpful to bring to state and local officials and say, ‘Here is the problem and it’s a big one.’ We believe we may be able to have some success addressing the issue with the Citrus Health Response Program (CHRP), which is the successor to the canker eradication program.”

According to Becker, interpreting CHRP as a successor to canker eradication would allow property owners who have abandoned groves to be given notice that they are not in compliance with CHRP. Those who are not in compliance could lose their ag tax exemption. Mutual has recently confirmed this opinion with the Florida Commissioner of Agriculture.  

“Then we have another issue where a grove is not considered abandoned, but the grower is not taking care of it like he should,” Becker says. “That is an even bigger problem, because those trees represent a more active reservoir for disease due to continued leaf flushes from modest care. It kind of gets down to growers communicating on a local level to be sure that their neighbors are taking the needed steps to fight greening and canker.”

Working On Labor

“Being a processor, labor is very near and dear to us,” says Becker. “We are totally reliant on the available pool of labor to do what we do. With that in mind, we know immigration is a huge issue with the American public, and it is tough for any politician to take on.

Research Funding Debate

The citrus industry knows that the battle against citrus greening, canker, and other diseases will be an ongoing process that requires significant funding over a period of years. Currently, there are three proposals being discussed by industry members on how to fund research and marketing efforts going forward.

• Federal Research Order – This idea would place a tax (per box) on all imports (not just into Florida) and would tax domestic production as well to fund only research efforts. According to supporters, it is promising that importers like Brazil seem to be okay with this idea, and another plus is it would free up Florida grower tax money for marketing.

• Unified Tax – This idea would eliminate the current box tax on fruit and would levy a tax on juice as it leaves the plant. Proponents of the plan argue this idea would stop giving imported juice that is blended with Florida juice a “free ride” in marketing efforts.

• Federal Research and Marketing Order – This order, proposed by FDOC, would establish two separate committees under one federal order, one for research and one for generic marketing. At press time, discussion on this order was in its early stages.

“Labor is bigger than just citrus in Florida. Just about every corner of our economy is reliant on a good supply of labor. It is a huge issue in the state.”
FCM had supported AgJOBS but it got caught up in the larger immigration debate, which ended in a stalemate with no action taken. Becker says to expect action on immigration after the election.

“With the election over, we will see the immigration debate come up again,” he says. “There will be comprehensive reform, and we will be pushing for something similar to AgJOBS to be approved as part of the larger package.”

Prices And The Economy

OJ prices have been weighed down by large inventories. In an environment of increasing input costs, growers are feeling the squeeze on margins. According to a report by IFAS, citrus production costs (excluding greening and canker costs) increased by 25% to 29% or $260 to $290 per acre from 2006-2007 to 2007-2008.

At the end of the 2007-2008 season, combined (NFC + FCOJ) orange juice inventories in the state exceeded 600 million single-strength-equivalent gallons or nearly 30 weeks of supply at current movement levels. That supply will have to come down quite a bit to bring a better delivered-in price for Florida oranges.

“This is a serious issue in our market,” says Becker. “We have seen OJ prices rise to historic highs, and consumers have responded with lower consumption. Retail prices must come down, and we are seeing some signs of that now as our retail partners work to get to a price that will generate incremental sales and movement.”

In the wake of recent market meltdowns, Becker has not heard of too many problems with growers finding access to credit given that traditional ag lenders did not get caught up in risky credit markets that took down the larger investment banks.

“We are in uncharted territory with the economy,” says Becker. “You know we may get the retail price of OJ down, but we might not see the same response in demand as we have in the past. But, the good news is we are still offering consumers a great product with a strong nutritional package.”             

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