Grapefruits, Lemons, & Oranges

http://www.agmrc.org/commodities__products/fruits/citrus/citrus-profile/

Fresh citrus price diferencials vary according to the type.  Lemon normally receives the highest prices, while grapefruits receive the lowest (http://www.agmrc.org/commodities__products/fruits/citrus/citrus-profile/).

“Orange juice imports also increased during 2010, rising by 8 percent to nearly $439.6 million. Brazil supplied 58 percent of the orange juice, followed by Mexico.  (FAS 2010).  This would change in 2012, after a fungicide Carbendazim was detected in Tropicana products, thought to have come from Brazilian oranges.  However, I suspect that this is a temporary trend, as Brazilian producers will adapt and regain U.S. market share.  [“Tropicana goes back to using only Florida oranges”.  Chicago Tribune. 16 January 2012.]

Fresh grapefruit imports to the United States jumped 14 percent in 2010, rising to $2.2 million. Mexico was the top supplier of fresh grapefruit. The country supplied imports valued at $1.6 million, or 75 percent of all fresh grapefruit imports.  (FAS 2010)”

[http://www.agmrc.org/commodities__products/fruits/citrus/citrus-profile/].

“U.S. lemon production in 2010 totaled 23.5 million boxes or 940,000 tons, up 9 percent from last season. The crop was valued at $400.7 million. California is the leading producer of lemons; its 2010 crop totaled 21.0 million boxes [AMGRC].”

The profitability of each of these citrus crops are not equal.  Generally, lemons yield the most profit, while grapefuits the least.

Lemons typically receive the highest price per pound and grapefruit the lowest. In 2010, however, tangerines averaged $18.41 per box while lemons averaged $16.77 per box. Grapefruit were the lowest priced, averaging $$9.61 per box.  The price of fresh oranges has shown strong variation. However, the average price for the last few years has ranged from $9.22 per box to $9.96 per box.

[http://www.agmrc.org/commodities__products/fruits/citrus/citrus-profile/]

Therefore, putting climatic and soil concerns aside, is it coincidence that California grows lemons (among other high value crops ie: almonds), while countries like México produce the least profitable commodity- grapefuits.  (You can also observe this when you buy a winter tomato: the vine tomatoes come from Canada, while the larger ones come from México.  The vine tomatoes are significantly more expensive.)

Now what if state policy advocated the complete abandonment of grapefuit cultivation in the citrus growing states (Arizona, California, Florida, and Texas)?  Would consumers benefit from lower priced grapefruits and larger profit margins from increased lemon (or orange) production yields?  Have Californian state policies already assisted a transition to more expensive crops being produced?  Does this happen as a direct strategy, or is it an indirect consequence of things such as higher property taxes or a higher minimum wage?  If I had more time, I would have liked to explore this site more from the California Department of Agriculture http://www.cdfa.ca.gov/.

Will Mexico face consequences for assuming a role of provider of the least profitable citrus crop?  If all U.S. grapefruit production shifted to Mexico, what would be the short-term and long-term ramifications for cost, quality, and safety of this commodity?  How can we measure the multiplier effects that these consequences have on other sectors of the Mexican economy?  Will they simply export grapefruits or process them into other value-added commodities (such as juice).

Brazilian orange production has been gradually gaining market share in the U.S.  Could this be because we demand so much orange juice or because their oranges genuinely taste better?  There has been anti-dumping legislation passed in order to prevent Brazilian producers from exporting their product at below market prices, but the U.S. government protects cotton growers.

[This is a very basic overview.]

 

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