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What Happened to the Florida Orange Industry?

By Allen Morris

_______________________________________

Case Study Presented at the Private and Public, Scientific, Academic and Consumer Food Policy

Group Meetings, Harvard University, Cambridge, Massachusetts, November 23-24, 2014.

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The Private and Public, Scientific, Academic and Consumer Food Policy Group (PAPSAC)

Founded in 1993, PAPSAC is sponsored by the John F. Kennedy School of Government at

Harvard University, and funded from grants provided by the Kellogg Foundation. Its mission is

“to reach constructive decisions in developing and utilizing technology in the U.S. food system

in a socially, environmentally, and economically desirable manner.” PAPSAC brings together

non-profit organizations and for-profit enterprises, academics, and agribusiness corporate

leaders, consumer advocates and nutritionists, public policy analysts and high level

representatives of FDA and other government agencies. The purpose is for leaders from all

points in the food system to speak freely about critical issues facing each entity, the country, and

our global economy and ecosystem. Consequently, media is not allowed entry into the venue

because that could prevent the free flow of ideas and information. Attendance is by invitation

only and limited to 75.

Some of the organizations represented at PAPSAC meetings include Smithfield Foods,

Syngenta, Perdue Farms, Cargill, Eli Lilly and Co., King Ranch, Wegmans Food Markets, The

Dannon Company (Dannon Yogurt), Monsanto, and Dow Chemical from the private sector; the

Harvard Business School, Harvard Medical School, Harvard Law School, the Environmental

Protection Agency, the Food and Drug Administration, the U.S. Dept. of Agriculture, the World

Bank, Johns Hopkins University, the National Academy of Sciences, the Wharton School of

Business, the Norwegian Ministry of Environment, the Mormon Church, and the Royal

Agricultural College of England from the public sector. The main focus of the meetings is

improving health and nutrition world-wide, sustainable agriculture, food safety, water

availability and quality, and genetically engineered crops.

The following is a case study. As such, it must be written in past tense because it might be used

as a teaching tool at Harvard, and years from now the events described in the case will be in the

past. Harvard cases must also have a central character that the case is built around, and be written

as a factual story.

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What Happened to the Florida Orange Industry?

Allen Morris

Introduction

Allen Morris, vice-president of sales and marketing for Blue Lake Citrus Products, stared in

disbelief as Todd Dicks, a Central Florida grower, showed him through one of his orange groves

near Winter Haven. There was almost as much fruit on the ground as on the trees. And it was

only December, about two months before this Hamlin grove was scheduled to be harvested. Of

greater concern was the fact that this high rate of fruit drop was present throughout Florida’s

citrus industry, for all varieties of citrus. Harvesting of Valencia orange groves, which would not

begin until March, would not be completed until June, so fruit losses could become much worse.

Other than after a damaging freeze or hurricane, this was one of the highest rates of fruit drop

Allen had ever seen. And Allen had seen a lot of citrus groves in his 35 year career in the citrus

industry. A career that in addition to his current position, had included management positions at

Duda, one of Florida’s largest growers, Tropicana, one of the largest orange juice brands,

Cutrale, one of the largest bulk citrus processors, exporters and growers, Prudential Agricultural

Investments, the largest lender to citrus growers, and as a member of the University of Florida

Citrus Research and Education Center faculty, the world’s largest citrus research facility. In

addition to Florida, Allen had visited citrus groves in California, Brazil, China, Mexico, and

Spain, areas that collectively represented over 90 percent of the world’s orange production.

There was no doubt in most growers’ minds that the high fruit drop was because of citrus

greening, or Huanglongbing (HLB), a devastating citrus disease that had been found in south

Florida nine years earlier. Rather, there was shock and concern that the enhanced foliar nutrient

programs that most Florida growers had chosen as a way to control HLB instead of removing

infected trees, may no longer be effective as a greening management tool. That concern grew as

the 2012-13 Season progressed, and the original Florida orange crop estimate of 154 million

boxes by USDA’s National Agricultural Statistics Service Florida Field Office (NASS) in

October of 2012 was subsequently reduced seven times in monthly forecasts until it reached

133.6 million boxes at the end of the season. Reflecting the potential for increased fruit drop

again, the initial Florida orange crop estimate by NASS for the 2013/14 season was only 125

million boxes. However, that estimate was reduced five times in monthly forecasts until it

reached 104.6 million boxes by the end of the season, as fruit once again dropped off trees at

rates seldom seen before the prior season. This was the smallest Florida orange crop in a non-

freeze year since the 1967/68 crop. The 2014/15 season orange crop forecast by NASS on

October 10 was 108 million boxes. With better growing conditions than in several seasons, the

forecast of a larger crop than that of the previous season was not surprising. But if NASS

subsequently reduced this forecast by as much as they did last season’s, the orange crop would

be 90 million boxes, only one million more than a well-respected private forecast in August. It

appeared as if the concerns of many scientists that enhanced foliar nutrient programs may not be

effective on a sustainable basis were correct.

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The concern and fear of most of the Florida citrus industry was that if fruit volumes continued to

decline in subsequent seasons, there would not be enough fruit to support an economically viable

infrastructure of citrus processing, fresh packing, fruit harvesting and hauling, and other sectors

that were important to the functioning of the industry. More importantly, that this would result

in the loss of a major part of the $8.9 billion Florida citrus industry and the 76,000 jobs it

supported.

HLB and Funding Research for a Cure

HLB had originated in China about 100 years ago. It was thought to be caused by the bacterium,

Candidatus Liberibacter asiaticus. HLB had seriously affected citrus production in a number of

countries in Asia, Africa, the Indian subcontinent and the Arabian Peninsula. Wherever the

disease appeared, citrus production had been compromised with the loss of millions of trees. It

was first discovered in the state of Sao Paulo, Brazil in 2004 and Florida in 2005, two regions

that accounted for almost 90 percent of world orange juice production. It was spread by a tiny

insect called the Asian citrus psyllid when it fed on the leaves of infected trees. Symptoms were

leaves with a yellow/green blotchy mottled color and fruit that was lopsided, had aborted seeds,

failed to color properly, and was bitter and small. It first reduced fruit yields, then killed the tree.

A tree could be infected for up to two years and not show symptoms, yet still spread the disease.

By February of 2008, less than three years after the first positive HLB test on a Florida citrus

tree, near Homestead, the disease had spread to all 32 of Florida’s commercial citrus producing

counties.

Botchy Mottled Leaves Psyllid

Lopsided Small Bitter Fruit with Aborted Seeds

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The Florida Citrus Production Research Advisory Council (FCPRAC) operated under the Florida

Citrus Production Research Funding Order. This research support program was established under

the Florida Marketing Act, which initially enabled Florida citrus growers to tax themselves up to

one cent per box of citrus for the purpose of providing funding to support needed research.

Growers approved this marketing order by referendum in 1991. It ended every six years, when

growers could elect to renew it and set a new funding ceiling or discontinue it. FCPRAC's

board, which consisted of 14 grower representatives serving four-year terms, had the

responsibility for assessing citrus production research needs, working with investigators to

develop projects to meet those needs, selecting among competing research proposals and

awarding grants to selected proposals. The FCPRAC board also determined the tax rate annually

within the ceiling. The tax was collected by the Florida Department of Agriculture and

Consumer Services (FDACS) and historically raised around $1.5 million annually for research

projects. Faced with the urgency of HLB and related research, the Florida Legislature and the

Florida Department of Citrus (FDOC) contributed an additional $12 million to FCPRAC for

distribution during the 2008–2009 citrus production season. In 2011, after it was approved under

the Florida Marketing Act and by Florida citrus growers, FCPRAC voted to increase the tax

ceiling to three cents a box.

The Florida Citrus Commission and the Florida Department of Citrus were formed in 1935. The

Florida Citrus Commission (Commission) was a 9-member board appointed by the Governor to

oversee the Florida Department of Citrus (FDOC). The FDOC provided marketing, research, and

regulatory support for Florida citrus products. Although it was a state agency, the FDOC

operated under a state marketing order which established a means to raise revenue through a tax.

Growers funded the FDOC through an excise tax placed on each box of citrus that moved

through processing plants and fresh fruit packinghouses. The Commission set the tax rate each

year. Historically, about 80 percent of the FDOC operating budget was allocated to marketing

activities such as TV advertising, public relations and merchandising. With the onset of HLB in

Florida, the Commission directed 16 percent of the FDOC's budget to disease research. The

research money was channeled through FCPRAC for disbursement to researchers in the form of

competitive grants.

The Citrus Research and Development Foundation, Inc. (CRDF) was a corporation organized in

the 2008/09 citrus production season under Florida State laws as a Direct Service Organization

of the University of Florida. Its birth was in response to one of the recommendations of a

National Academy of Sciences committee. This committee had been employed by the citrus

industry to review the threat of HLB and recommend how to organize the efforts to develop

management strategies to enable surviving HLB until a cure was found and how to improve

efficiencies in order to speed the finding of a cure. The committee recommended that the efforts

to battle HLB be consolidated under one organization with strong leadership that would direct

the efforts to fight HLB and also patent and commercialize results of the research. The mission

of the CRDF was “To advance disease and production research, and the patenting and

commercial development of new technologies, to ensure the survival, competitiveness, and

profitability of the Florida citrus industry.” The organization was headed by a 13 member board

of directors that included individuals from the citrus industry, academia and government, and

represented the interests of all sectors of the Florida citrus industry. After it was established, all

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HLB citrus research funding went through the CRDF which, among other things, solicited

research proposals and awarded grants to selected proposals.

Florida Citrus Mutual, a cooperative trade association, was formed in 1948. Its mission was to

help Florida citrus growers produce and market their crops at a profit. With about 8,000 grower

members, Mutual was led by a member-elected board of 21 directors. Primary activities included

effective lobbying at the federal and state level, providing market information, and serving as a

strong, effective voice for members. Mutual was funded through a tax assessment per box of

citrus sold through commercial channels. During the past decade, Mutual had secured over $1

billion for hurricane disaster aid, research for citrus pests and diseases, most notably HLB, and

other assistance for Florida growers.

Since 2007, The Florida citrus industry, federal and Florida state governments had invested

approximately $70 million in over 100 research projects to find a cure for HLB. But as of 2014,

a cure had not been found.

Management Practices to Control HLB

From an economic viewpoint, the main consequences of greening were increased tree mortality,

reduced fruit yields, and increased costs of production. The recommended horticultural

management practices to help control HLB were to scout for trees with infected leaves, remove

those trees as soon as they were found, and aggressively spray to control psyllid populations.

Most well-trained scouts could be 95% accurate in visually identifying HLB. About 10% of the

infected leaves found in scouting were sent for polymerase chain reaction (PCR) testing in a lab

as a check on the accuracy of the scouts. U.S. Sugar Corporation in Clewiston and the

University of Florida Institute of Food and Agricultural Sciences Research Center in Immokalee

operated PCR labs used by Florida growers.

Scouting for HLB

Uncontrolled HLB spread at a non-linear rate, often doubling, tripling or more each year

(Exhibit 1). The goal was, through controlling psylid populations and removing infected trees,

to keep HLB infection at 2% or less. Unofficial estimates indicated that had been achieved on

less than 100,000 acres of Florida’s 524,640 acres of commercial citrus groves. Once the HLB

infection rate exceeded 7-8% in a grove or block, the disease was usually uncontrollable. A

particularly disturbing aspect of HLB was that psyllids preferred to feed on newly flushing

leaves. Since multiple flushes throughout the year were more prevalent on young 1-4 year old

trees, it was difficult to reset trees lost to HLB or other causes, or to replant individual blocks in

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a grove with high inoculum levels, and get the newly-planted trees to survive. Of particular

concern was the impact of HLB on organic citrus production. Since organic growers couldn’t

effectively spray to control psyllid populations, organic production was impacted much more by

greening than fruit produced in non-organic groves.

In the 2003/04 season, the year before HLB was found in Florida, 242 million 90-pound boxes of

oranges were produced on 564,844 bearing acres containing 75.4 million bearing trees (Exhibit

2).1 By the 2007/08 season, 170 million boxes were produced on 464,000 bearing acres

containing 61.7 million bearing orange trees. While part of that decline was the result of trees

removed to control the spread of HLB, and an unprecedented high-priced Florida real estate

market that diverted citrus groves to real estate development, most was due to the federally-

mandated citrus canker eradication program. The experiences with that program affected the

success the Florida citrus industry had in managing HLB.

Citrus canker was a bacterial disease that caused lesions on leaves, stems and fruit, making the

fruit, which was safe to eat, too unsightly to be sold. It was spread primarily by wind-driven rain

and human contact. While it did not kill trees, if uncontrolled, it would eventually render trees

unproductive. If controlled by management practices, it reduced fruit yields by 5 – 15%, and

increased production costs, both from reduced yields and increased spraying needed to keep trees

producing marketable fruit. The citrus canker eradication program legally required the

destruction of all citrus trees in a 1900 foot radius of an infected tree, which was about 260 acres.

After hurricanes spread canker throughout Florida in 2004 and 2005, the eradication program

was deemed unsuccessful and discontinued in 2006. Consequently, the Florida citrus industry

was managing canker and dealing with the resulting reduced fruit yields and higher costs.

Between 1995 and 2006, 10 percent of Florida’s citrus acreage (87,000 acres) was destroyed as

part of the canker eradication effort, at a direct cost of $1.3 billion.

Citrus Canker

1 In Florida, a box of oranges is a standard unit of measurement and weighs 90 pounds. It contains 220-

250 oranges and produces 6-7 gallons of juice. Citrus fruit is now handled in bulk bins and trailers, thus

the term “box” is a statistical measure only.

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After the failed canker eradication program, many Florida growers felt that eradication of canker

should never have been the goal, that managing and living with canker the way Brazilian

growers had been doing for decades should have been the goal, and that the eradication program

had destroyed tens of thousands of acres of citrus unnecessarily. This hurt the credibility of the

scientists and state and federal agencies with growers and as a result, many didn’t take the threat

of greening seriously. Consequently, a number of growers either did not follow recommended

practices to control greening at all, or although they sprayed to reduce psyllid populations, did

not remove infected trees that were still economically viable, which exacerbated the spread of

the disease. The unpopularity of the canker eradication program was one reason no attempt was

put into place to legally require citrus growers to manage HLB. By the time growers realized

how serious greening was and began to aggressively follow recommended HLB management

practices, it was too widespread to effectively control. The industry desperately needed a way to

survive greening until a cure was found.

HLB was discovered in Maury Boyd’s 400 acre grove near Immokalee in the spring of 2006,

only six months after it was first discovered in Florida. At that time, 40 percent of the trees in

some of the blocks in his grove were already symptomatic for greening. Maury ignored the

advice of scientists that he needed to remove his infected trees because the grove’s profitability

would have been substantially reduced. With Maury’s permission, the Florida Department of

Agriculture’s Division of Plant Industry (DPI) used his grove to train scouts because the

infection was so widespread there. Maury had been a citrus caretaker for many years and had a

reputation for experimenting with innovative ways to improve citrus yields and lower production

costs.

Maury developed a mixture of foliar nutritional compounds and began using it on his grove.

HLB infection spread to 100%, but his grove thrived. Maury conducted tours through his grove

for hundreds of interested growers and scientists, from both Florida and Brazil. Some groups

were so large they came in buses. By the 2008/09 season, production in his grove had increased

to 585 boxes per acre, compared to a state average of 354 boxes per acre for that season and a 5-

year state average (excluding freeze and hurricane years) of 359 boxes per acre.

It appeared to most growers and some scientists that enhanced foliar nutrient programs might

keep citrus trees economically productive until a cure for HLB was found. By 2010, informal

surveys indicated that about 75% of the growers in Florida had abandoned tree removal and

adopted some version of Maury’s enhanced foliar nutrient program, which still required

aggressive control of psyllids.

The cost of Maury’s enhanced foliar nutrient program, net of the scouting and tree removal costs

it eliminated, and ground fertilizer costs it reduced, were an increase in production costs of $288

per acre, which was 16 percent of direct cultural costs. Scientists believed these programs

worked by feeding nutrients to the tree through its leaves, by-passing the compromised root

system and blocked phloem of a tree infected with HLB. However, many scientists were

concerned that in the absence of removing infected trees, with the resulting increased inoculum

levels that would be in groves, if the enhanced foliar nutrient programs were not effective on a

long-term basis, infection rates would be too high to enable getting HLB under control and the

groves would be lost. Thus, they were against abandoning removal of infected trees as part of an

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Maury Boyd’s grove, 100% infected with HLB and using his enhanced

foliar nutrient program

An example of waiting too late to begin an HLB management program

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HLB management program. Some citrus growers with low HLB infection rates (typically less

than 5% infection) agreed with the concerns of these scientists and continued to scout for and

remove infected trees, but also used various enhanced foliar nutrient programs to strengthen trees

that may be infected but were not yet symptomatic.

Since 2004, the year before HLB was discovered in Florida, the costs for managing a Florida

citrus grove had more than doubled, increasing from $920 to $2,049 per acre. While some of

this increase in costs was due to higher prices for fertilizers and chemicals and costs for

managing canker, the vast majority was from greening management practices. Adding harvest

and haul costs, depending on fruit yields (which were lower than in previous years due to HLB),

and interest on capital investment (or loans) including a return to land, the result was that break-

even costs for producing juice oranges had doubled, going from about $.73 per pound solids

prior to the discovery of HLB in Florida to $1.47.2

Impact of HLB on Citrus Production in Florida Compared To Brazil

In the fall of 2008 at industry request, Allen organized and led a collaborative effort by the

University of Florida Institute of Food and Agricultural Sciences (UF/IFAS), DPI, and NASS to

conduct a survey to determine the extent of HLB infection in Florida citrus groves. In 2009, it

was decided to make this an annual survey in order to track changes in infection rates. U.S.

Sugar Corporation also joined this survey, providing additional helpful data from their PCR lab.

The survey showed that HLB infection rates increased from 1.6% in 2007/08 to 21.9% by

2010/11 (Exhibit 3). After 2011, not enough growers were scouting for infected trees to obtain a

representative sample and the survey was discontinued. Exhibit 4 illustrates the way this

incidence of infection looks on a map of Florida. It was estimated that by 2011, every

commercial citrus grove in Florida was infected with greening, although infection rates varied

from less than 3% to over 75%.

FUNDECITRUS, a Brazilian citrus research organization, also conducted an annual greening

infection survey for Sao Paulo State, where most of Brazil’s citrus was produced. In 2008, four

years after greening was discovered in Brazil, infection was 0.6%. By 2011, it had increased to

3.8%, substantially lower than in Florida (Exhibit 3). It was estimated that in 2011, 53% of

Brazil’s citrus groves were infected with greening with infection rates ranging from less than 1%

to 7%. As a result of these much lower HLB infection rates, and ability to move new plantings

into greening-free regions, citrus production in Brazil had not been affected by HLB nearly as

much as in Florida (Exhibits 2 and 5). In fact, the most recent three-year average of orange

production in Brazil was greater than the three year average before HLB was discovered there.

Brazilian growers, without the stigma of a recently failed disease management policy that Florida

growers had experienced, took the threat of HLB much more seriously after it was first

discovered than Florida growers. Thus, they were more aggressive in implementing effective

2 Pounds of solids are a measure of the soluble sugar solids in juice. Fruit and bulk juice bought

and sold by processors is priced per pound of solids. One gallon of single strength ready-to-serve orange

juice, such as consumers buy in a store, contains 1.029 pounds of solids. Oranges generally produce

from 6 to 7 pounds of solids per 90-pound field box. Over 95% of Florida’s oranges are processed into

juice.

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greening management practices during the critical early stages after it was first detected when

infection rates were low. Also, it was required by law in Brazil to scout for, locate and remove

greening-infected trees, but as explained earlier, not in Florida.

Brazilian citrus production was also moving further southward and northward (“running from

greening”) as growers replanted in areas such as Baru and Istapetininga where there were no

psyllids and no disease pressures from greening. These new groves were also planted at double

the tree densities, and a larger percent were irrigated, than the groves in the traditional

production regions of Matao, Limieria, Araraquara, and Piriciaba. Thus, yields per acre would be

much greater in the new regions than they had ever been for groves in the traditional regions.

Florida growers had no such places without psyllids or pressure from greening to move their

citrus production to. Discussions with Brazilian growers indicated the general expectation was

that most of the fruit lost in the areas where greening was most widespread would be offset by

new production in the other regions, a process that had already begun to happen.

HLB Research

HLB research was focused into three broad areas, tree resistance, psyllid control and disease

management strategies. Tree resistance research was mainly focused on ways to find or develop

rootstocks and/or trees that would be immune or resistant to HLB, either through genetic

engineering or trials with rootstocks that would show promise for traits of HLB resistance.

Psyllid research was focused on insecticidal control. The two HLB horticultural management

strategies that showed the most promise were organizing the state’s groves into Citrus Health

Management Areas (CHMAS), and replanting economically unviable groves using ultra-high

density advanced production systems.

No matter how effective tree removal and psyllid control were, if a neighboring grove was not

effectively managing HLB, the efforts in both groves were substantially compromised. For large

contiguous plantings under one management that was not a problem. But in areas consisting of

numerous smaller groves (less than 1,000 acres each), it was. UF/IFAS extension personnel led

efforts to organize these smaller groves into larger 10,000 – 20,000 acre citrus health

management areas (CHMAs). All growers in a CHMA operated their psyllid spray program on

the same schedule. These larger areas also enabled small growers that were in the CHMA to use

aerial spraying, which reduced costs compared to ground spraying. The result was more effective

psyllid control since the insects were not being chased into neighboring groves on a different

spray schedule. In 2014 there were 48 CHMAS in Florida covering over 500,000 acres.

Higher density plantings enabled greater fruit production from 4-10 year old trees because of the

greater number of trees per acre, which increased the present value of earnings over the life of

the grove.3 But higher density groves were more costly to plant than groves of traditional

densities of 116 to 145 trees per acre. Before HLB, most growers were unwilling to invest the

additional funds to plant ultra-high density groves, so most Florida groves were planted at

3 Citrus trees are four years old before they produce a commercially harvestable crop, and their production

increases until they are about 12 years old, when production levels out. A citrus tree will produce fruit for

over 30 years if it does not succumb to diseases or a freeze.

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traditional densities. In fact, after higher density groves are 10 years old, anecdotal evidence

indicated that the higher density crowded the trees and actually led to reduced grove yields.

With endemic HLB, in order to offset increased tree attrition and increase the productive life of

future groves potentially infected with HLB, some Florida citrus growers were considering

replanting groves lost due to HLB or some other cause to densities ranging from 198 to 350 trees

per acre. Some smaller groves producing fruit for the fresh market were being planted at

densities as high as 570 trees per acre. In addition to providing more trees per acre to offset

higher tree mortality from HLB, a key advantage of higher density groves was that when trees

were lost, the neighboring trees grew to fill the empty spaces, thus helping further mitigate lost

yields per acre. An advanced production system (APS) was being used where the higher planting

density was combined with nutrients and water, precisely managed through a drip irrigation

system. To reduce the impact of crowding as the trees matured, dwarfing rootstocks were used

in APS groves. The smaller trees received sunlight in their interior more uniformly than

traditional trees, which improved fruit yields. Fruit harvesting costs were also reduced because

the trees did not grow tall enough to require ladders.

Economic analysis conducted by Morris and Muraro at the University of Florida showed that the

economic life of a mature citrus grove planted at traditional densities was less than 8 years after

it became infected with HLB if the infection was not controlled to less than 3%. That same

mature grove planted at 270 trees per acre had an economic life of 15 years or more. However,

young (less than 5 year old) trees were at greater risk of greening infection than mature trees

because of the increased attraction of psyllids to the multiple leaf flushes of young trees. Thus,

the challenge for replanting an unprofitable citrus grove at higher densities in order to increase

its economic life was to prevent or minimize greening infection in young trees so they lived long

enough to become profitable. That was the main impediment to replanting economically

unproductive citrus groves in Florida after the discovery of HLB. Prior to the discovery of HLB

in Florida, when annual tree losses were 2-4% and lost trees could be easily replaced by

resetting, groves had an economic life of over 25 years if not destroyed by a freeze. Some groves

were still in production after 80 years.

Addition horticultural management practices that were being explored to mitigate the impacts of

HLB included heat treatments that entailed placing tents around individual citrus trees and

subjecting them to temperatures of 104 – 113 degrees F., and treating trees with antibiotics and

antimicrobial compounds.

Saving the Florida Citrus Industry

Between 2000/01and 2013/14 the Nielsen-measured U.S. orange juice market declined by 45%,

Florida orange production declined by 53% and retail orange juice prices increased by 44%

(Exhibits 1 and 6). The decline in the orange juice market appeared to be the result of the

decline in orange production and resulting higher prices. However, an examination of historical

data during the supply-reducing freezes of the 1980s will help explain why the U.S. orange juice

market problem is not caused by inadequate supplies. Between 1979/80 and 1989/90, Florida’s

orange crop went from 207 million boxes to 110 million boxes, a 47% decline (Exhibit 7). Yet

the Nielsen-measured orange juice market only declined from 808 million gallons to 702 million

gallons, a decline of 13.1% during this time, even though retail orange juice prices increased by

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62% (Exhibit 7). How did the Florida citrus industry suffer a 47% decline in orange production,

experience a 62% increase in orange juice prices, yet only lose 13% of the market? Orange juice

imports, primarily from Brazil, supplemented reduced Florida orange juice supplies, and as a

result of strong orange juice demand, did not denigrate prices (Exhibit 8). In 1989/90 the

Florida Citrus Processors Association average price for early-mid and Valencia oranges was

$1.55 per pound solids, which in 2014 dollars would be $2.82.

Why had the US orange juice market declined so much by 2014 that it was smaller than it had

been in over 30 years? Because since 2001 the Florida Department of Citrus generic advertising

programs had not been effective,4 and because some nutritionists and physicians had been

downplaying orange juice consumption because of its high sugar content, which they claimed

contributed to obesity. Effective marketing of any product required telling consumers what was

different about the product and why that difference had value.

By 1992 the US orange juice market was down in spite of increased consumer purchasing power

and lower retail prices, because marketing efforts had been reduced during the supply-

constraining freezes of the 1980s. The Florida Citrus Commission decided to recapture the

declining orange juice market by developing a marketing program that would emphasize the

health and nutritional advantages of orange juice. This led to the launching of the “Triple

Crown” marketing campaign, which told consumers that orange juice consumption reduced

chances of cancer, heart disease, and birth defects. Endorsements about the health benefits of

orange juice were received from the American Heart Association, the American Cancer Society

and the March of Dimes. Messages were also published about the health benefits of consuming

orange juice from credible scientists and research institutions. Between 1995/96 and 2000/01,

the last five years of this marketing strategy, the total orange juice market grew by 10 percent

and retail prices increased by 20 percent – real demand growth. US per capita orange juice

consumption rose to its highest level in history, 5.8 gallons.

Telling consumers that orange juice helps them “take on the day,” such as the FDOC’s generic

advertisements had done since 2001, did not effectively convey these messages. Coffee, tea, soft

drinks and a number of other products could also help consumers “take on their day.” The

consumer needed to be told what was different about orange juice, and why that difference had

value. If changes in laws governing health claims now prevented that, then a credible scientist or

physician could say “orange juice is an important part of a healthy diet” as part of the

advertisement, which was an opinion.

Orange juice did contain natural fruit sugars, the same as any 100 percent fruit juice. But non-

diet soft drinks contained more sugar per ounce than orange juice, and it was added sugar from

other sources, and had no substantial nutritional benefits. Per capita consumption of non-diet

soda was ten times as high as orange juice consumption, but health care professionals were not

attacking soft drinks as much as orange juice. Also, orange juice had more nutrients per calorie

4 Studies have repeatedly shown that brand advertising does not grow the orange juice market, it only

grows the advertised brand’s share of that market. Effective generic advertising is required to grow the

total orange juice market.

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than most other 100 percent fruit juices such as apple, grape, pineapple, and prune juice.5 Other

nutritional attributes of orange juice that leading beverages such as soft drinks, other 100 percent

fruit juices, coffee, tea, and milk did not have is that orange juice was unusually high in vitamin

C and contained potassium citrate, vitamins or other compounds that may act as anti-oxidants in

the body, flavonoids, folate, and thiamine. These attributes may contribute to improving blood

vessel functioning, reduce the risk of some birth defects, reduce LDL (the bad cholesterol), help

prevent kidney stone formation, and may have beneficial effects on blood pressure, which can

help reduce the risk of cardiovascular disease. These attributes may also help support the

immune system, and protect cells against free radicals, which could damage cells and tissue that

could contribute to the development or progression of chronic disease. Importantly, some of

these benefits, particularly those related to cardiovascular disease markers, had been

demonstrated in clinical trials with orange juice.6 7 8 Moreover, epidemiological research had

shown that consuming orange juice compared to not consuming was not associated with an

increase in bodyweight in children or adults.9 10

Unfortunately these messages had not been

effectively conveyed to consumers.

The citrus industry already had the technology to live with HLB, the same as China had been

doing. In Ganzhou, the world’s largest naval orange production region, larger than California,

Spain and South Africa combined, they tried enhanced foliar nutrient programs. But ultimately

all of their citrus trees were wiped out. So they replanted using disease-free bud wood, at higher

tree densities, 260 or more trees per acre; they regularly identified and removed symptomatic

trees as soon as they were found; reset lost trees; and sprayed aggressively to control psyllids,

coordinating their psyllid spray schedules so they were spraying on the same days. The result

was an average HLB infection rate in Ganzhou of only 0.2%.

5 Rampersaud, Gail C. “A Comparison of Nutrient Density Scores for 100% Fruit Juices.” Journal of

Food Science, Vol. 72, No. 4, 2007.

6 Basile, LG, Lima, CG, Cesar TB. “Daily Intake of Pasteurized Orange Juice Decreases Serum

Cholesterol, Fasting Glucose, and Diastolic Blood Pressure in Adults.” Proc Fla State Hort Soc.

2010; 123: 228–233.

7 Cesar, TB, Aptekmann NP, Araujo MP, Vinagre CC, Maranhao RC. “Orange Juice Decreases Low-

Density Lipoprotein Cholesterol in Hypercholesterolemic Subjects and Improves Lipid Transfer to

High-Density Lipoprotein in Normal and Hypercholesterolemic Subjects.” Nutrition Research.

2010; 30 (10): 689-694.

8 Morand C, Dubray C, Milenkovic D, Lioger D, Martin JF, Scalbert A, Mazur A. “Hesperidin

Contributes to the Vascular Protective Effects of Orange Juice: A Randomized Crossover Study in

Healthy Volunteers.” Am J Clin Nutr. 2011; 93 (1): 73-80. 9 O’Neil CE, Nicklas TA, Rampersaud GC, Fulgoni VL 3

rd. “One Hundred Percent Orange Juice

Consumption is Associated With Better Diet Quality, Improved Nutrient Adequacy, and no

Increased Risk for Overweight/Obesity in Children.” Nutrition Research; 2011; 21(9): 673-682. 10

O’Neil CE, Nicklas TA, Rampersaud GC, Fulgoni III VL. “100% Orange Juice Consumption is

Associated With Better Diet Quality, Improved Nutrient Adequacy, Decreased Risk for Obesity,

and Improved Biomarkers of Health in Adults.” National Health and Nutrition Examination Survey,

2003-2006. Nutrition Journal; 2012; 11:107 (December 2012).

15

Replanting groves to much higher tree densities, controlling psyllid populations, and regularly

identifying and removing trees symptomatic for HLB was how the Florida citrus industry could

survive and live with endemic greening. Following the freeze damages to the Florida fruit supply

of the 1980s, the national orange juice brands provided selected well-capitalized growers with

long-term (15-20 year) fruit contracts containing guaranteed minimum fruit prices that enabled

making a profit and obtaining financial loans. As a result, over 100,000 acres of citrus groves

were planted, restoring the citrus industry’s production lost to freezes. So what was preventing

this same strategy from restoring the citrus industry’s production lost to HLB? THE DYING

ORANGE JUICE MARKET!

If a national citrus juice brand or brands provided 15 year fruit contracts with a floor price equal

to that $2.82 per pound solids that fruit prices were in 1989/90 (in today’s dollars) after the

supply damaging freezes, and gave all of the rise to each season’s market price in a growing

orange juice market, there would be a strong supply response. Even if the national brands offered

long-term fruit contracts with floor prices equal to $2.00 per pound solids, 37% above break-

even costs, the same premium to break-even costs as the floor prices the brands provided in the

long-term contracts they offered following the freezes of the 1980s, then adjusted it annually for

inflation, and gave all of the rise to each season’s market price in a market with growing

demand, there would be a strong supply response. This would lead to an industry successfully

living with endemic HLB the way China was doing. Why would a brand do that? In order to

secure a stable base of Florida fruit for a growing high-priced orange juice market – that is, if

there still was one.

Under the strain of a continuously declining citrus crop and falling tax revenues with no relief in

sight, on March 19, 2014, the Florida Citrus Commission voted unanimously to terminate its

contract with BBDO Atlanta, its advertising firm. This firm had been primarily responsible for

creating and implementing a national TV orange juice campaign since 2010. But the continuing

decline in Florida's orange crop under the effects of citrus greening had reduced tax revenues

received by the Florida Department of Citrus too much to support an effective TV marketing

campaign.

Finally again recognizing that to effectively market orange juice its health benefits needed to be

pointed out, in September of 2014 the FDOC, working with comic book giant Marvel

Entertainment, redesigned their Captain Citrus character. Unlike the rotund, jovial character

they introduced in 2011, the new Captain Citrus was a muscular, fitness-focused, healthy

Marvel-style superhero that joined Marvel Comics’ popular Avengers to digitally promote the

nutritional benefits of orange juice.

How could the Florida Department of Citrus (FDOC) get the funds to support an effective

national TV advertising program for orange juice? By issuing the Healthy Taste Challenge. The

Healthy Taste Challenge would be a national contest where two winners were chosen every three

months for a year. The winners would the people or families that had spent the most and the

second most money on OJ during that three month time period. First prize would be a new car.

Second prize would be an all-expense paid 7-day trip for four to Florida to visit one of the theme

parks near Orlando.

16

One of the auto manufacturers and one of the theme parks would be chosen to partner with the

FDOC on this contest, and provide the car and the all-expense paid trip for to Florida for four,

respectively. They would also promote that they were one of the sponsors of the Healthy Taste

Challenge, their incentive being that Florida citrus, which was healthy, wholesome and produced

by Florida growers, was a good image for them.

The unique nature of this contest, boosted by the promotional results of the auto manufacturer

and theme park chosen, would gain national media attention. Some of the headlines might be…

“The Florida Department of Citrus, Ford Motor Company and Disney World have teamed up to

award big prizes to families that buy the most orange juice.”; “Want to win a new car or spend a

week in Florida? Enter the Healthy Taste Challenge and buy lots of orange juice.” Following

these types of headlines, the article would point out the health benefits of orange juice, and the

fact that this contest could help save an industry. The TV talk shows would likely pick up on this

and officials from the FDOC, the auto manufacturer, and theme park could be interviewed on the

TV talk shows and give the same message as the newspaper articles. This would give lots of free

opportunities to correct the growing negative image of OJ and to re-educate the public about its

health benefits. It would also get on the internet, face book, twitter, etc. and go viral. It could

become a national mania with hundreds of thousands of families taking the healthy taste

challenge. And the FDOC would not have to spend a penny on TV advertising to get tens of

millions of dollars of it.

The Future

Lakeland Ledger, January 27, 2014. “In the darkest hours of Florida's eight-year battle against

citrus greening, Congress has come through with its most substantial commitment yet — a

guaranteed $125 million over five years to finance research against the ruinous bacterial disease.

The money is part of a bipartisan new Farm Bill congressional leaders announced late Monday.

The research money caps a four-year effort by U.S. Sen. Bill Nelson D-Florida to create a long-

term funding solution to attack greening, arguably the biggest threat to Florida's $9 billion citrus

industry in generations. It comes on top of $20 million for greening-related research in the

recently approved 2013-14 federal budget that was obtained by Nelson; U.S. Rep. Tom Rooney,

R-Okeechobee, whose district includes Polk County; and other Florida representatives.”

As Allen drove to the University of Florida Citrus Research and Education Center in Lake

Alfred, he thought about the presentation that he was going to make at the request of a group of

Brazilian citrus growers who had come to Florida to tour the citrus industry. His presentation

would be about the impact of HLB on world orange juice supplies and markets, now a topic of

much concern to the global citrus industry. As he turned into the familiar parking lot, Allen

wondered if the $145 million now available to fund HLB research would enable scientists to be

successful in discovering a cure, and if so, would this cure come in time to save the industry. He

also wondered when or if they did discover a cure, could the declining U.S. orange juice market

be turned around into a growing market that would support high enough prices for Florida

growers to take the risks and commit the capital to replant the Florida citrus industry’s 400,000+

acres of infected groves.

17

Discussions with Citrus Industry Representatives

Gilberto Tozatti, President of GCONCI, a Brazilian company that provided horticultural

consulting services to approximately fifty percent of Brazil’s citrus growers, and also the owner

of a large citrus nursery, located in Cordeirôpolis.

The most important thing that citrus growers can do to mitigate the impact of HLB is regularly

scout for and eradicate symptomatic trees, and spray to control psyllid populations. In some

cases it may take as many as 24 sprays per year for effective control. Growers also need to rotate

insecticides to prevent psyllids from building resistance. Much like in Florida, Brazilian growers

were organizing into large contiguous areas that sprayed on the same schedules to improve the

effectiveness of psyllid control. Growers also needed to replant unproductive groves at higher

tree densities, to provide a larger base of trees that could be lost to greening and still enable

profitable production. But only the larger growers were following all of these practices to

manage HLB. The smaller ones could not afford to.

Consequently, over the past three years 370,650 acres of citrus owned by 5,100 small Brazilian

growers had been switched to other crops, mainly sugarcane and coffee. The result was a

concentration of production into fewer but larger, well-capitalized growers who had multi-year

fruit contracts with processors. By 2013, one fourth of the growers produced three fourths of the

citrus, which was not the case ten years earlier. By then, processors owned 30-40 percent of the

citrus groves in Brazil, with the largest processor owning over 250,000 acres.

As important to the future as effectively managing greening, was restoring growth to the orange

juice markets in the USA and Europe (which accounted for 90 percent of world orange juice

consumption). Consumption in both of these markets was declining. Without growing markets

and demand, improving citrus production with effective management of HLB would not matter

because there would not be high enough prices to make a profit, or even cover the cost of

managing HLB.

Gilberto reminded Allen that in the talk Allen had made at a GCONCI grower banquet in 2010,

Allen had proposed that Florida and Brazil cooperate to grow the world’s orange juice markets.

An orange juice marketing strategy for growing the orange juice markets in Europe and the US

would be developed and implemented. It would be funded with taxes collected from both

Florida and Brazilian growers, and the funds placed in a pool. Because Brazil produced three

times as many oranges as Florida, the funds in this pool would be four times as much as was

currently available to fund marketing programs. The funds available from the pool for each

market would be determined annually by each market’s relative share of the total. Europe was

currently 53 percent and the US was 47 percent of that total. A world marketing board would be

created comprised of representatives from both Florida and Brazil to oversee this marketing

program. This idea, which had gained press coverage after Allen’s presentation, had been widely

discussed among Brazilian growers and processors, and was particularly popular with Brazilian

growers. But nothing had happened about it. With growing markets in the greening-endemic

citrus industries in Brazil and Florida so vital to the future of the world orange juice industry,

Gilberto believed that this idea should be resurrected and pursued.

18

Quentin and Morgan Roe, president of WG Roe and president of Blue Lake Citrus Products,

respectively. WG Roe was a fresh citrus packer whose focus was tangerines. Blue Lake Citrus

Products, the citrus processing subsidiary of WG Roe, produced and marketed the Noble brand

of tangerine and other high end specialty citrus juices as well as bulk citrus juices sold to other

brands and labels. Quentin, a former Florida citrus commissioner, served on the boards of

directors of the Florida Fruit and Vegetable Association (FFVA), the Florida Citrus Packers

Association, and the New Varieties Development and Management Corporation. Morgan had

served as a member of the boards of directors of the FFVA and the Florida Citrus Processors

Association, and as chairman of the FFVA Mutual Insurance Company. Their brother, Bill, who

was also an owner of WG Roe, was unable to attend the meeting.

The Roes became concerned with the popularity of seedless, easy-to-peel clementines from

Spain that entered to US market in the early 1980s. The fact that clementines would not grow in

Florida’s climate, and that none of the University of Florida or USDA citrus breeding programs

were trying to develop a seedless, easy-to-peel tangerine that would grow in Florida’s climate

also concerned them. Thus, in the 1980s the Roes began their own breeding program. By 2012,

they had developed two seedless, easy-to-peel tangerines that thrived in Florida’s climate,

patented them, and begun planting groves with the new patented varieties. Sweeter and juicer

than California citrus because of Florida’s climate, the Roe’s new tangerines would be positioned

to compete with California Cuties.

The Roe’s were planting their patented new varieties at 570 trees per acre. In order to facilitate

such a high density, they were grafting the trees onto a dwarfing rootstock recently released by

the USDA – #897. This ultra- high planting density combined with the dwarfing rootstock

would provide a number of advantages. The additional trees in a grove containing four times as

many trees as a grove planted at traditional densities would offset higher tree mortality from

HLB. It would also enable greater fruit production from 4-10 year old trees, which would

increase the present value and internal rate of return on earnings over the life of the grove. For

example, four years after planting these groves would be producing 600 boxes per acre compared

to less than 100 boxes per acre for groves planted at traditional densities. The smaller tree would

also receive sunlight in its interior more uniformly than traditional trees. This would improve the

quality and flavor of interior fruit compared to that produced in traditional groves, and these

groves would not need to be hedged or topped until they were 9-10 years old, if ever, which

would reduce costs.

The Roes were also adapting irrigation and harvesting technology they had learned from the

apple industry. The fertigation11

required to achieve the aggressive growth in citrus trees and

fruit yields the Roes were expecting required the use of drip irrigation. However, these systems

wasted water and nutrients because once the system was turned off, the nutrient-laden water

continued to seep out until the system was drained. The system the Roes were using was a pulse

drip system with a pressurized emitter that prevented the seepage of water and nutrients out of

the system when it was turned off. The result would be a 50% savings in water and nutrients. A

dual micro-jet irrigation system that shared the wells with the drip system would also enable

11

Fertigation is the application of fertilizers, soil amendments, or other water soluble products through an

irrigation system.

19

these groves to be protected from freezes, something a traditional drip irrigation system could

not do.

The Roe’s HLB management strategy was zero tolerance for the disease. Thus, they aggressively

controlled psyllids, and regularly scouted for and removed diseased trees. As a result, the

infection rate in their newly planted tangerine groves was less than 2 percent.

Harvesting represented almost half the cost to produce citrus fruit in Florida. Citrus fruit for the

fresh market was typically harvested by pickers on ladders putting fruit in sacks slung over the

picker’s shoulder. This fruit was subsequently dumped into large plastic bins holding about 900

pounds of fruit. From there the bins were loaded onto a truck by a machine and hauled to a

packinghouse. The Roe’s smaller trees on the dwarfing rootstock would not grow tall enough to

require the use of ladders. Thus, the harvesting system the Roes were going to use entailed the

use of a large vacuum hose. The hose would be placed under the picker’s arm, the picked fruit

would be placed in the mouth of the hose, and a vacuum would pull the fruit into a bin on a

machine driving slowly down the middle between rows. Four pickers, one on each side in the

front and back of the machine, respectively, would supply fruit to the bins on this machine.

When a bin was full, it would be hydraulically removed from the machine and left to be retrieved

by another machine, and would ultimately be loaded onto a truck for its journey to the Roes’

packinghouse. The result was estimated to be 1.5 times the productivity of traditional citrus

harvesting, yielding a significant reduction in harvesting costs.

The main source of tangerines for Blue Lake Citrus Products was packinghouse eliminations, the

30-40 percent of fruit being packed for the fresh market that was sent to processors because of its

small size or unattractive appearance. Once their groves planted in the new varieties were in full

production, they would own over 80 percent of Florida’s tangerine supply. Not dependent on

oranges or grapefruit for their Noble brand, and effectively controlling HLB in their groves, the

Roe’s felt that they had protected themselves from the loss of citrus due to HLB.

Vic Story, President of Story Companies, which consisted of about 2,000 acres of Florida citrus

groves owned, and another 3,000 acres of groves managed by the Story family. Vic was a former

Florida citrus commissioner and former president of Florida Citrus Mutual.

Florida growers were trying everything they could think of to mitigate the effects of HLB and

survive until a cure was discovered. They were also comparing notes, and sharing ideas and the

results of their experiments with new grove management practices.

It was believed that the recent three years of atypically dry weather, and the resulting increased

use of irrigation water had increased the pH of irrigation water going onto groves because of

increased dissolved limestone in the water. The ideal soil pH for citrus groves was 6-6.5,

whereas the soil in many Florida groves was now 7-8. Noting that a grove near Immokalee in

South Florida with a soil pH of 6 had almost no fruit drop during the past few seasons of record

high fruit drop, it was thought that one reason for the unusually high fruit drop over the past few

seasons might be the high pH. In response, growers were treating their irrigation water with

sulfuric acid that included nitrogen that made it safe to use, and that brought the pH down into

the ideal range.

20

Headline was a fungicide used on citrus trees for blossom blight and black spot. It interrupted the

life cycle of fungus, killing it. Consolidated Citrus, Florida’s largest citrus grower with over

55,000 acres prior to the discovery of HLB, and a division of King Ranch, conducted a test with

Headline. They had noticed that groves sprayed with Headline did not have as much fruit drop as

their other groves. So they sprayed one grove with Headline next to a grove that was not sprayed.

The grove they sprayed with the fungicide had 47 percent less fruit drop than the one not sprayed

with headline. BASF, who made Headline, conducted a grower meeting where one of their

scientists explained that Headline enhanced chlorophyll production in the leaves, which reduced

fruit drop.

As the meeting concluded, Vic made the point that no matter how effective HLB management

practices were, or even if a cure for HLB was soon discovered, none of it would restore the

Florida citrus industry unless the declining orange market could be turned around and made to

grow again.

Mike Sparks, executive vice-president of Florida Citrus Mutual, had over 30 years of

experience in the citrus industry, serving as the chief financial officer of the FDOC before going

to Florida Citrus Mutual in 2006.

Mutual had recently been instrumental in getting greening recognized as an eligible cause of tree

loss under the USDA’s Tree Assistance Program (TAP). TAP provided up to 50 percent of the

cost of tree removal and site preparation, and 65 percent of the cost of trees and replanting.

However, since it was subject to a $125,000 cap, it was only applicable to small growers. The

resulting funds would cover 28 percent of the total cost of replanting and then caretaking a grove

for the four years required for it to produce a commercially harvestable crop. Still, if the

estimated 5,000 eligible growers all planted the 71 acres that TAP would support, that would

total 355,000 acres. The problem was that without long-term fruit contracts that provided

guaranteed minimum floor prices, growers may be unwilling to commit the capital and take the

risk to replant groves, and because of this risk, they may not be able to secure loans to fund it.

In 2013, the Coca-Cola Company announced that it would offer 20 year contracts for the

planting and production of 25,000 acres of orange groves. These contracts would be offered to

Cutale Citrus Juices USA, and Peace River Citrus Products, Coca-Cola’s two largest citrus juice

suppliers. Cutrale Citrus juices USA was the U.S. Subsidiary of Suco Citrico Cutrale, one of the

world’s largest citrus growers, processors and exporters, based in Araraquara, Brazil. Peace

River Citrus Products was a bulk processor with plants in Arcadia and Bartow, Florida. These

contracts were said to contain guaranteed minimum floor prices.

In 2014, Citrus World, a Florida grower-owned cooperative whose brand was Florida’s Natural,

announced that it would provide $10 million as an incentive for its members to plant citrus trees.

At an estimated cost of $8,349 per acre to plant a citrus grove and get it into commercial

production, $10 million would cover 100 percent of the costs of planting about 1,200 acres.

PepsiCo, that owned Tropicana, had not announced any long term fruit contracts.

The 26,200 acres of orange groves that Coca-Cola and Citrus World were incenting growers to

plant, at full production would total 11 to 13 million boxes. That was only about 15 percent of

the oranges processed by the three national orange juice brands. However, following the freezes

21

of the 1980s, the national brands covered 40 to 60 percent of their fruit needs with long-term

contracts.

Mike’s concluding remark was that other than finding a cure for HLB, the most important thing

to the Florida citrus industry was incentives for growers to replant groves infected with HLB.

Exhibit 1. Spread of HLB Infection in Groves Where It Is Unmanaged

Note: The above line graphs are for both uncontrolled and controlled HLB. They are

based on actual data. The large differences, such as the projection for 45 years to spread to

100% in Brazil on one graph and only about 3 years on another, are due to differences in

the mix of controlled and uncontrolled HLB, different tree ages, different levels of

inoculum in surrounding groves, and different fruit varieties.

Exhibit 1 was reproduced with permission from Tim Gottwald, USDA, ARS.

22

Exhibit 2. Florida Orange Production, Acres and Trees

Thousand Million

Season Million Boxes Bearing Acres Bearing Trees

2000/01 223 605.0 79.6

2001/02 230 586.9 77.6

2002/03 203 587.6 78.0

2003/04 242 564.8 75.4

2004/05(a)

150 541.8 72.6

2005/06(a)

148 491.0 66.0

2006/07(a)

129 475.9 64.0

2007/08 170 464.0 61.7

2008/09 163 459.1 60.8

2009/10 134 451.0 59.6

2010/11 141 440.0 58.2

2011/12 147 433.4 57.5

2012/13 134 429.2 57.1

2013/14 105 --- ---

____________________________

(a)Effects of hurricanes, the canker eradication program and the start of HLB

Note: Production year is November - June

Source: USDA, National Agricultural Statistics Service, Florida Field Office

23

Exhibit 3

24

Exhibit 4

25

Exhibit 5. Orange Production in Sao Paulo, Brazil

Season Million Boxes

2000/01 355

2001/02 280

2002/03 365

2003/04 290

2004/05 380

2005/06 320

2006/07 350

2007/08 360

2008/09 315

2009/10 320

2010/11 275

2011/12 420

2012/13 390

2013/14 290

2014/15E 310

______________________________

Note: Production year is May - January

Source: USDA, Foreign Agricultural Service

26

Exhibit 6. U.S. Retail Orange Juice Market Since 2000/01.

Mil. SSE Gal. $ Per Gal.

2000/01 889 4.37

2001/02 861 4.39

2002/03 836 4.40

2003/04 807 4.35

2004/05 795 4.42

2005/06 745 4.69

2006/07 650 5.71

2007/08 624 5.91

2008/09 629 5.61

2009/10 609 5.53

2010/11 575 5.92

2011/12 527 6.24

2012/13 520 6.22

2013/14 487 6.29

_____________________

Note: SSE is single strength equivalent

Source: A.C. Nielsen

27

Exhibit 7. U.S. Retail Orange Juice Market, Florida Orange Supply, and Prices During the

1980s.

Retail Orange Juice Market Florida Orange Supply

Mil. SSE Gal. $ Per Gal. Mil. Boxes $ Per Lb. Sol.

1979/80 808 2.60 206.7 0.85

1980/81 808 2.98 172.4 1.06

1981/82 804 3.11 125.8 1.22

1982/83 863 3.05 139.6 1.14

1983/84 856 3.50 116.7 1.24

1984/85 817 3.80 103.9 1.69

1985/86 884 3.25 119.2 0.98

1986/87 858 3.34 119.7 1.09

1987/88 797 3.97 138.0 1.43

1988/89 755 3.72 146.6 1.54

1989/90 702 4.20 110.2 1.55

_____________________

Note: SSE is single strength equivalent

Sources: (1) A.C. Nielsen

(2) USDA, National Agricultural Statistics Service

(3) Florida Citrus Processors Association

(4) U.S. Dept. of Commerce

28

Exhibit 8. The Total U.S. Orange Juice Market, Orange Juice Production and Orange

Juice Imports

Total U.S. Orange Domestic Orange U.S. Orange Juice

Juice Market12

Juice Production Imports

(Million SSE Gallons)

1979/80 1,203 1,278 103

1980/81 1,077 975 208

1981/82 1,021 695 374

1982/83 1,283 947 377

1983/84 1,106 642 550

1984/85 1,145 618 598

1985/86 1,191 679 546

1986/87 1,261 772 546

1987/88 1,269 902 416

1988/89 1,268 960 383

1989/90 1,103 639 492

12

Includes the Nielsen-measured retail market plus convenience stores and foodservice

Note: SSE means single strength equivalent

Sources: (1) A.C. Nielsen

(2) Florida Citrus Processors Association

(3) Florida Department of Citrus

(4) USDA, National Agricultural Statistics Service

(5) U.S. Dept. of Commerce