Dive Brief:
- Alico Inc, one of the largest orange growers in the U.S., announced it would exit the citrus industry after seeing its Florida production devastated by recent hurricanes and years of rampant plant disease.
- The company, a supplier to Tropicana, said it will not spend further capital on its citrus operations after the current crop is harvested in 2025. The firm’s Alico Citrus division will reduce most of its production workforce effective immediately, with close to 3,500 citrus acres set to be managed by third-party caretakers.
- Alico said it will transform into a diversified land company and expects to sell or lease most of its acreage to farming operations. Some land will also be sold for commercial and residential development.
Dive Insight:
Hurricanes and the relentless plant disease citrus greening have shriveled output and pushed growers to reconsider their future in Florida, once a leader in U.S. orange production.
Florida’s orange crop is expected to be the lowest in a century, the U.S. Department of Agriculture predicted. Hurricane Milton presented a major setback in growers’ efforts to make progress against the threat of citrus greening.
Alico has seen citrus production decline approximately 73% over the last 10 years even as the company made significant investments in disease treatments. The additional impact of recent hurricanes has led the company “to conclude that growing citrus is no longer economically viable for us in Florida,” Alico President and CEO John Kiernan said in a statement.
“We’ve explored all available options to restore our citrus operations to profitability, but the long term production trend and the cost needed to combat citrus greening disease no longer supports our expectations for a recovery,” Kiernan added.
Alico expects 75% of its land holdings will remain agriculturally focused for “the foreseeable future,” according to a statement. The company owns roughly 53,370 acres of land in Florida, plus an estimated 48,700 acres of oil, gas and mineral rights.
High costs in the citrus industry have pushed many suppliers to rethink their investments, not just in Florida. Limoneira, a California-based producer of avocados and lemons, has sold thousands of acres to pay down debt and the company plans to transform into a marketer and seller of citrus rather than taking on the cost of harvesting.