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The Dynamics and Implications of Recent Increases in Citrus Production Costs
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Permanent Link: http://ufdc.ufl.edu/IR00001179/00001
 Material Information
Title: The Dynamics and Implications of Recent Increases in Citrus Production Costs
Physical Description: Fact Sheet
Creator: Muraro, R. P.
Morris, R. A.
Publisher: University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication: Gainesville, Fla.
Publication Date: 2009
 Subjects
Subjects / Keywords: Citrus Fruit Industry -- Economic Aspects
Genre:
Temporal Coverage: 1993 - 2008
Spatial Coverage: Florida
 Notes
Abstract: "This article examines themagnitude of recent changes in citrus production costs for Florida growers and discusses their implications."
Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Diana Hagan.
Publication Status: Published
General Note: "Published March 2009."
General Note: "FE793."
 Record Information
Source Institution: University of Florida Institutional Repository
Holding Location: University of Florida
Rights Management: All rights reserved by the submitter.
System ID: IR00001179:00001

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Ronald P. Muraro and Robert A. Morris2

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 2 Change in production costs in U.S. dollars for Southwest Florida processed oranges between 2002 and 2007 without citrus greening costs. Source: (5,7).

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 3 Share of production costs in U.S. dollars by cost component for a 10+ year-old processed orange grove without citrus greening costs, 2002 compared to 2007. Source: (5,7). Trends in Florida fertilizer prices in U.S. dollars per ton, 1999. Source: (8). Trends in Sao Paulo (Brazil) fertilizer prices in U.S. dollars per ton 2002. Source: (8). A comparison of mixed-fertilizer prices in U.S. dollars per ton in Florida and Sao Paulo (Brazil), 2002. Source: (8). Percentage increases in world demand for fertilizer nutrients from 2001 to 2006. Source: (9).

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 4 A comparison of fertilizer prices in U.S. dollars per ton to gasoline and diesel prices in U.S. dollars per gallon by year, 1999. Source: (8,10).

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 5 Statistical Summary Economic Information Report Series: Budgeting Costs and Returns for Central Florida (Ridge) Citrus Production Economic Information Report Series: Budgeting Costs and Returns for Southwest Florida Citrus Production Retail U.S. Gasoline and Diesel Fuel Prices Economic Report of the President

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 6

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 7 Historical grove care costs and processed orange prices in current and inflation adjusted U.S. dollars, 1992 and 2002. Season Total Costs Total Costs Inflated to 2003 U.S. Dollars Delivered-In Price Delivered-In Price Inflated to 2003 U.S. Dollars ($/Acre) ($/Pound Solids) 1992 778.71 904.45 0.6789 0.7885 1993 781.47 896.35 0.9342 1.0715 1994 740.95 820.57 0.8838 0.9788 1995 776.44 839.68 1.0730 1,1604 1996 756.93 819.22 0.9123 0.9874 1997 765.65 849.97 0.8719 0.9679 1998 770.79 848.18 1.0678 1.1750 1999 783.43 815.31 0.9054 0.9422 2000 758.85 780.90 0.7648 0.7870 2001 767.77 808.76 0.8364 0.8811 2002 775.49 775.49 0.9378 0.9378 Source: (1,3,11). Production costs in U.S. dollars for a 10+ year-old Southwest Florida processed orange grove. 2002 2007 2007t Without Greening Without Greening With Greening ($/Acre) (% of Total) ($/Acre) (% of Total) ($/Acre) (% of Total) Weed Control & Herbicide Costs 181.13 23.6 201.36 16.2 201.36 11.5 SprayPesticide Costs 137.18 17.7 175.23 14.1 422.68 24.1 Fertilizer Costs Material 124.50 16.0 386.67 31.0 386.67 22.1 Application 16.05 2.1 27.16 2.2 27.16 1.6 Total Costs 140.55 18.1 413.83 33.2 413.83 23.6 Pruning/Topping 28.03 3.6 35.13 2.8 35.13 2.0 Tree Removal/Resets 102.44 13.2 157.36 12.6 280.00*16.0 Irrigation & Ditch Maintenance 184.16 23.7 263.08 21.1 263.08 15.0 Citrus Greening Management & Canker Decontamination 0.00 0.0 0.00 0.0 135.63 7.7 Total Production Costs 775.49 100.0 1,245.99 100.0 1,751.71 100.0 Costs are higher because of an additional 2.3 percent tree attrition per year assumed from greening. Source: (5,7).

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 8 Historical grove care costs in U.S. dollars for Central Florida processed oranges, 1967 to 2007, in fiveseason intervals. FiveSeason Intervals Total Costs Change ($/Acre) (%) 1967 201.60 1972 244.43 21.2 1977 383.94 57.1 1982t 548.46 42.8 1987t 628.30 14.6 1992t 778.71 23.9 1997t 765.65 .7 2002t 778.26 1.6 2007t 1,752.81 125.2 Note: These costs are for Central Florida groves because no cost data were available for Southwest Florida back to 1967. However, total grove care costs for Central Florida groves are approximately the same as those for Southwest Florida groves. Source: (2,4,6). Break-even price in U.S. dollars for processed Hamlin and Valencia oranges, 2002 and 2007 seasons. Boxes / Acre 350 400 450t 500t 550t 600t DeliveredIn Price / Box ($/Pound Solids) WITH ResettingTree Replacement, 2002 1.0180.940t0.880t0.832t0.792t0.760 tWITH ResettingTree Replacement, 2007, With CankerGreening 1.4851.355t1.254t1.174t1.107t1.052t NO ResettingTree Replacement, 2007, With CankerGreening 1.364 1.249 1.160t 1.089t 1.030t 0.982t WITH ResettingTree Replacement, 2002 0.8940.826t0.772t0.730t0.6950.667 WITH ResettingTree Replacement, 2007, With CankerGreening 1.3301.214t1.1241.0520.9930.944 NO ResettingTree Replacement, 2007, With CankerGreening 1.240 1.135 1.054 0.989 0.935 0.891 a Assumes 6.2 pounds solids per box for 2007, and 6.0 pounds solids per box for 2002. b Assumes 7.0 pounds solids per box for 2007, and 6.8 pounds solids per box for 2002. Source: (5,7).

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The Dynamics and Implications of Recent Increases in Citrus Production Costs 9 Example of reducing the impact of high 2007 fertilizer prices in U.S. dollars in a processed orange grove without citrus greening management costs. Costs in 2007 Costs with 75% Fertilization, 2007 ($/Acre) (% of Total) ($/Acre) (% of Total) Total Production Costs 1,245.09 100.0 1,149.32 100.0 Fertilizer Costs Materialt 386.67 31.0 290.00 25.2 tApplicationt 27.16 2.2 27.16 2.4 t Total Fertilizer Costs 413.83 33.2 317.16 27.6 Source: (7).