CONFIDENCE IN THE CITRUS

INDUSTRY

REPLANTING ON THE RIDGE

Situation In Florida

• HLB in Florida for 10 years• Disease endemic in most groves Statewide for

over five years– Inconsistent results across farms

• Massive Research Effort is Producing Results– No ‘Silver Bullet’ on the horizon– We must be realistic about the time needed for

research– We must combat the disease using conventional

methods while researchers look for better options

Situation In Florida

• High Price Environment– Prices not high enough for many groves due to

low production and high costs– Very Attractive Returns with good yields

• Consumers Want What We Grow!– OJ is a staple item – Three major brands invested– Opportunity in Fresh Sector with new varieties

Situation In Florida

• Consolidation is Accelerating– Farms are getting larger• Large Farms have advantage with Psyllid Control• Abandoned Acreage is increasing• Some growers are exiting the business

• Vertical Integration is Accelerating– Brands, Processors, & Packers are offering

incentives to growers to replant• Contracts with long term floor pricing• Tree Planting Incentive Plans

Growers Must Replant for Farms to be Sustainable

• Yields will continue to decline on the existing infected stand of trees

• Fruit Quality will continue to be a challenge on the existing infected stand of trees

• Other problems remain– Root Weevils– Nematodes– Blight

• Continuous Improvement: Learn something new every day!

We learn more with every generation

• Varying Tolerance among both scions and rootstocks

• Soil Drench Application Strategies• Increasing planting densities is driving early

yields• Enhanced nutrition is resulting in harvestable

yields as much as a year earlier than expected• HLB detection is at manageable levels

We must combat the disease with the tools we have available

CHMAS Work!

• Low psyllid numbers are normal in areas where growers work together with coordinated sprays

• Easier when fewer growers control large acreages• More difficult but just as effective in areas with

fragmented ownership• Aerial, low-volume, and air-blast sprays all can

contribute• Your CHMA can be a competitive advantage for

your farm!

CHMAS Work!

• Yields Compared to Pre-HLB 2007/2008 Production:– Statewide Orange Production Down 37.8%– Peace River Orange Yields Up 3.4%

• Aggressive Best Management Practices• High Density Plantings

• Peace River Mature Grove Production, Compared to 2007/08– Well Organized CHMA: Yields down 22.1%– Below Average CHMA: Yields down 35.2%

High Density Works!

• Traditional Density– Prior to 1980: 70 Trees / Acre– Prior to HLB: 140-170 Trees / Acre

• Current Plantings: 225 – 363 Trees / Acre– 18’ – 20’ Row Spacing Allow Use of Conventional

Equipment– Shorter Economic Life• New Plant Material• New Technologies

Intensive Management

• Psyllid Scouting– There are more out there than you think!– Detect Issues Early

• Application Issues• Weather Influences on Spray performance

• Aggressive Soil Drench Program• Intense Spray Program– 2-week interval on young trees– Reapply early based on scouting

Intensive Management

• Eliminate Stress– Soil Moisture Monitoring– Automation: Irrigation & Fertigation

• New Fertilization Approaches– Constant Feed– Time Release

New Plantings are a Good Investment!

• Pro-Forma Internal Rate of Return with 4 Years Pre-Production– 7.5% without Leverage– 11.5% with 65% Debt: Equity

• Pro-Forma Internal Rate of Return with 3 Years Pre-Production– 12.4% without Leverage– 26.4% with 65% Debt: Equity

• IRR increases by 3% with Tree Planting Incentive

New Seedless Varieties are Critical to the Fresh Sector

• California Industry– Over 46,000 Acres of Mandarins Planted– Successfully branding

• Halos, Cuties, & Dandy

– Revenue per Acre Approaching $10,000 for some farms• Florida Investment in Breeding & Variety

Development– IFAS Fast Track– USDA – License of Varieties Developed Worldwide

• Tango from California

– Revenue per Acre Approaching $10,000 for some farms

Tango Planted in 2012

Peace River’s Approach: All In!

• Investment with Duda in SW Florida• Juice Planting• Fresh Fruit

• Strategic Purchases on the Ridge• Eliminate Challenging Neighbors

• Improved Psyllid Control• Increased Operational Efficiencies

• Long-Term Real Estate Opportunities

• Replant the losers• Low density blocks: Middles over 25’• Dual Issues

• HLB & Variety• HLB & Blight

The Opportunity is Ours….

• Stakeholder Financial Commitment– Shareholders– Financial Partners

• New Management Intensity• Convert a ‘loser’ to a successful and profitable

modern grove• Start Now!

CONFIDENCE IN THE CITRUS

INDUSTRY

REPLANTING ON THE RIDGE