Hurricanes Put the Squeeze on Florida’s Citrus Industry

At this time of year, Philip C. “Flip” Gates Jr.’s long rows of grapefruit trees should be heavy with ripe fruit, and enshrouded with so many leaves that their canopies are verdantly opaque. But for citrus growers in Florida, this was hardly an ordinary year.

Of the four hurricanes to plow into the state in 2004, three tore through areas of major citrus production, lashing trees with high winds and heavy rains, stripping fruit and leaves from boughs, damaging limbs and soaking roots. The devastation was so great that the U.S. Department of Agriculture this month estimated that Florida’s orange crop would be 31% smaller than last season’s, while the grapefruit harvest would plummet to a low not seen since the Great Depression.

“Three out of every four grapefruit have been destroyed,” said Bob Norberg, director for economic research at the Florida Department of Citrus, a state agency. “For the moment, it’s unclear whether there will be enough grapefruit or grapefruit juice in the market to satisfy consumer demand.” It will be two years at least before the Florida grapefruit crop, the world’s largest, can return to normal, Norberg said.

The destruction done to citrus by hurricanes Charley, Frances and Jeanne was only the most recent blow to a sorely tried industry that was already struggling with shifts in consumer taste, the popularity of low-carbohydrate diets and intense competition from Brazil and other overseas producers.

Grapefruit has had to deal with a special hex of its own: a finding that its juice has the potential to interact with some pharmaceuticals, causing too much of a drug to enter the bloodstream. Some consumers have been scared away, and since last year, according to market surveys, U.S. grapefruit juice consumption has dropped by more than 21%.

“I don’t need to go to Las Vegas to gamble. I raise citrus here,” said Gates, 54, whose family has been growing fruit on Florida’s Atlantic coast for four generations, and whose holdings are currently 80% in grapefruit and 20% in oranges.

Northwest of Fort Pierce, Gates planted trees 10 years ago to produce a new and popular variety of grapefruit with deep ruby-colored flesh known as Rio Star. Gates said a crop surveyor assessing the damage from the two hurricanes that struck this area found only 1.5% of next season’s crop still on the trees.

Even now, three months after Jeanne, the second of the storms to maul the Indian River citrus-producing area on Florida’s east coast, fruit is still dropping from trees and going bad because of puncture wounds or bruises suffered during the hurricanes.

The ground under Gates’ trees is littered with fallen, rotting grapefruit. Many trees are leafless on their north side, where hurricane winds were fiercest. Some fruit remains on lower branches, where the winds were a bit less severe. The roots may also have been harmed by rain, which during each storm flooded the groves and turned them into temporary ponds.

“We really haven’t been profitable here for 10 years. We’re hanging on,” said the grower, when asked about the effects of the hurricanes on his business. Crop insurance should help cover his losses, and on the whole, Gates said, he’d prefer to keep growing citrus.

But he acknowledged that in the future, on the 800 acres of his family-owned Kanawha Groves, “if we plant anything, it’d be houses.”

Gates is already involved with other investors in a 5,200-acre tract, two-thirds of which is now in citrus, that legally could be converted into a municipality.

Even before the year of four hurricanes, citrus had been dethroned as the state’s most valuable agricultural product by ornamental plants. In all likelihood, the repeated storms, which are expected to cut the Florida orange harvest to its smallest size in 13 years, will further accelerate an industry shakeout.

“As the economy of Florida grows, it’s going to mature beyond agriculture,” said Mark Soskin, associate professor of economics at the University of Central Florida who teaches at campuses in Orlando and Daytona Beach.

However, the economist noted, there is a silver lining in the enormous damage done by the storms: Reduced citrus yields, especially the drop from last season’s record orange harvest, should firm up the price paid for fruit.

“In any kind of agricultural situation, bad crops are good news,” Soskin said.

Already, some American consumers have seen the consequences of that basic principle. This holiday season, some shippers of fruit gift boxes and baskets have been tacking on a special “hurricane surcharge” to recoup higher costs, since certain varieties could cost them 50% more.

The price of not-from-concentrate orange juice also has risen 3% compared with the same period last year, Norberg said in a telephone interview from the Department of Citrus headquarters in Lakeland.

Since the hurricanes, the price of U.S. orange juice futures also has also jumped roughly 20%, meaning that many investors are betting that juice is going to be in shorter supply and that the world’s No. 1 producer, Brazil, cannot make up all the shortfall.

But the effect on prices from the hurricanes shouldn’t be overstressed, said Judith Ganes-Chase, a citrus industry analyst and consultant in Katonah, N.Y. The current prices paid to Florida growers for oranges were still less than half of what they were in the mid-1980s, when multiple freezes killed much of the state’s crop, she said.

Moreover, 90,000 people in Florida, including migrant workers from Mexico, are usually dependent on citrus for their livelihood. Many of them are now without jobs because there is less fruit to pick, process or ship.

To help the industry weather the consequences of the hurricanes, Florida has approved $10 million in emergency funds for the marketing and advertising of the state’s citrus, and the U.S. Department of Agriculture has chipped in another $6 million, said Andrew Meadows, spokesman for the state’s Department of Citrus.

State officials have been cheered by the first uptick in U.S. orange juice consumption registered in more than two years, which may signify a waning in popularity of diets like the Atkins and South Beach regimens.

“Consumers are stocking up and drinking more orange juice,” said Norberg. In the wake of the hurricanes, the department purchased a 15-minute television spot to thank the nation’s consumers, on the growers’ behalf, for continuing to drink Florida juice.

Amid all the uncertainties of an economic sector in flux, Gates must wait until the spring to see whether the roots of his trees have been seriously damaged by soaking too long in rainfall and hurricane runoff. In the meantime, the trees need early fertilizing to replenish the energy they expended by putting out a second growth of leaves after Hurricane Frances struck Sept. 5, then having much of that new growth sheared off by Jeanne only 20 days later.

Even with generations of family experience and an agriculture degree from the University of Florida, it’s impossible for Gates to say how his trees and their fruit-producing capabilities have been affected in the long term. In 1949, Gates’ father rode out a hurricane that destroyed more than 80% of his crop.

“But he couldn’t tell me whether the next year the trees were back to normal, because in 1950, another storm came along that blew fruit off the tree,” Gates noted with a wry smile.