Growers Building Financial Resilience in the Era of Citrus Greening

Over the last two decades, citrus greening has changed what it means to run a viable operation in Florida. Declining acreage and vulnerable groves have made the experience of operating in this new “normal” environment hardly recognizable from the thriving citrus industry that previous generations built.

Working with citrus growers on the financial side of their operations, I have seen an important difference take shape between the growers who have found ways to continue adapting to greening and their peers who are questioning whether their operation can remain viable. Much of it comes down to two things: a willingness to rethink when and how to spend capital and embracing a resilient mindset that prioritizes long-term outcomes.

MISMATCHED OPERATIONS: CASH FLOW NEEDS AND PRODUCTION TIMING

In citrus farming, you can’t avoid a long-term outlook because it simply takes too much time to establish a tree and bring it into production. But you also can’t pause expenses while you wait for a tree to come online. Citrus has always been a capital-intensive crop with labor and equipment expenses and now even more so because of the inputs needed to protect a tree that’s fighting a 100% infection-rate disease.

One grower I’ve worked with described this reality precisely: by the time you start approaching harvest, years of capital is already locked into the crop, but financial obligations come due on a very different and shorter-term schedule. I’ve seen some operations look beyond a single source of capital and consider different financial tools to better align their expenses with their cash flow needs, which can facilitate both agronomic and economic success.

For example, some growers may use an operating line through a bank or credit institution alongside retail financing. Matching different sources of capital to different expenses can create more flexibility for times when your operational spending is at its highest. This can be helpful for growers as they evaluate how to fund their horticultural program and access the nutrition and protections a grove needs while still accounting for other necessary operating costs.

In order to withstand the pressures of citrus greening, growers have to prioritize not only the health of their groves but also the financial health of their cash flow to maintain their infrastructure and everything that supports the operation. A diversified capital management plan can help support productive cash flow and financial flexibility to do just that.

REDEFINING WHAT ‘SUCCESS’ LOOKS LIKE

The other shift I’ve watched play out is in the growers’ mindsets and how they define success. I’ve seen this change with some of the growers I work with. Yield still matters, but flexibility and resourcefulness are moving up on their list of priorities, and because of that, some growers are able to pivot their strategy and make the most of the cards they were dealt.

For some operations, adapting has meant looking beyond volume and finding ways to compete on quality and differentiation. They are marketing their crop and positioning their fruit as a boutique product rather than chasing box counts from the pre-greening era.

At the same time, they are also questioning the future of the citrus industry and what is feasible given the new realities they face from greening. They know there is no immediate fix to get the industry back to where it was, so their focus is on playing the long game. Investing resources into research that can combat greening is now a key strategic priority to ensure the next generation will have citrus groves to farm. These are fundamental shifts that are hard to make, especially when margins are tight. Today’s growers have to believe in their approach and find confidence that the investments they’re making in the future are sound even though the payoff might be five, 10, or 15 years out.

STRESS-TESTING YOUR FINANCIAL FLEXIBILITY

Based on how citrus growers have responded to greening, a key takeaway is that financial flexibility can give growers more options to respond to uncertainty while still planning for the future. To gauge how much flexibility your operation has, consider an exercise to stress-test your current financials and ask yourself a few questions:

• How reliant is your operation on a single source of capital? What other financing tools are available, and how might their terms align with different expenses?
• Does your financing structure let you fund a full horticultural program during the parts of the year when cash is tightest, or are you making agronomic trade-offs to align to maturity dates, which may not always be in lockstep with your cash flow cycle?
• Are you making financial decisions based on what’s due this month? What options can help you improve your cash flow forecast, while still being mindful of long-term operational decisions?

Responding to a disease like citrus greening might feel futile, but there are examples of growers who are finding viable solutions to keep going. In my experience, building more financial flexibility into an operation is helpful to that endeavor so growers have more options as they make decisions about tree health, infrastructure and the long-term future of their groves.

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Author Note: To delve deeper into this subject, CLICK HERE to read a related grower profile on financial resilience and how they refused to quit in the face of adversity.