Economic Implications of Managing Exotic Citrus Diseases (HLB and Canker) in Florida

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1 Economic Implications of Managing Exotic Citrus Diseases (HLB and Canker) in Florida Ronald P. Muraro, UF/IFAS Citrus REC Presented at the International Citrus & Beverage Conference Sheraton Sand Key Resort Clearwater Beach, Florida September 21, 2012

2 Changes in Orange Production Costs

3 Production Costs for a 10+-Year-Old Southwest Florida Processed Orange Grove Without Citrus Canker and HLB Greening With Citrus Canker and HLB-Greening With Canker HLB and Foliar Nutrients $/Acre % of Total $/Acre % of Total $/Acre % of Total Weed Control & Herbicide Spray-Pesticide Fertilizer, Calcium, F. Nutrients Pruning/Topping Tree Removal/Resets Irrigation & Ditch Maintenance HLB Scouting Management & Canker Decontamination Total Production Costs , ,

4 What is Driving Higher Production / Cultural Costs Increased world demand for fertilizer-nutrients Higher energy costs; the cost of transportation Higher Labor Costs Managing new exotic diseases; citrus canker and HLB-Greening Declining value of the U.S. dollar

5 Economic Implications of Managing Exotic Citrus Diseases The Case of Florida s Citrus Industry

6 Three Primary Citrus Production Regions in Florida (U.S.A.) North/Central Florida (Ridge) Southwest Florida Indian River Main citrus producing regions in `Florida, -- U.S.A.

7 Evolution of Disease Management Programs: The Case of Florida s Citrus Industry Before 2004: Primary disease concerns were citrus Tristeza that affects trees grafted on Sour Orange rootstock and Citrus Blight. Citrus canker was being eradicated in Florida Pesticide sprays: processed juice fruit 2 times per year fresh market fruit 6 times per year

8 Increasing Grove Care Costs for Managing Diseases (Cultural Care Costs Only) (US$/Acre) Total Costs (including sprays costs) ANNUAL BASE GROVE CARE PER ACRE (Mature Grove) Spray Costs Valencia (Central) (2) 1, Hamlin (SW FL) (2) 1, GFT (Indian River) (6) 1, Source: Ronald P. Muraro, UF/IFAS CREC, Lake Alfred, FL.

9 Evolution of Disease Management Programs: The Case of Florida s Citrus Industry 2004 and 2005: Four Hurricanes and one Tropical Storm with strong winds and rain crossed Florida resulting in a widespread dispersion of citrus canker throughout Florida s main citrus production regions; Central Florida (Ridge), Southwest Florida (SWFL) and Indian River. Florida was continuing to eradicate citrus canker

10 Evolution of Disease Management Programs: The Case of Florida s Citrus Industry 2006 to present: In 2006, citrus canker became endemic in Florida and the citrus canker eradication program ended. Growers began managing citrus canker with additional copper sprays and eventually natural windbreaks. Fresh fruit market growers had to certify that grove blocks and fruit packed in cartons were free of citrus canker. Pesticide sprays: processed juice fruit 3-4 times per year fresh market fruit 10 times per year

11 Increasing Grove Care Costs for Managing Diseases (Cultural Care Costs Only) (US$/Acre) WITH CANKER Total Costs (including spray costs) % Increase Spray Costs % Increase Valencia (Central) (3) 1, % % Hamlin (SW FL) (4) 1, % % GFT (Indian River) (10) 1, % % Source: Ronald P. Muraro, UF/IFAS CREC, Lake Alfred, FL.

12 Evolution of Disease Management Programs: The Case of Florida s Citrus Industry 2005 to present: In 2005, citrus HLB-greening was found in Florida. By 2006, growers began implementing Sao Paulo s (Brazil) growers HLB management program: scout to locate and remove HLB symptomatic trees and spraying to control psyllids.

13 Evolution of Disease Management Programs: The Case of Florida s Citrus Industry 2010 to present: In 2010, Citrus Health Management Areas (CHMAs) began to be organized by growers; there are 38 active CHMAs. The purpose of CHMAs is to encourage neighboring citrus growers to work together to combat citrus HLB-greening through the coordination of psyllid control efforts. Pesticide sprays: processed juice fruit 7-8 times per year fresh market fruit 11 times per year

14 Increasing Grove Care Costs for Managing Diseases (Cultural Care Costs Only) (US$/Acre) WITH HLB-GREENING Total Costs (including spray costs) % Increase Spray Costs % Increase Valencia (Central) (7) 1, % % Hamlin (SW FL) (8) 1, % % GFT (Indian River) (11) 1, % % Source: Ronald P. Muraro, UF/IFAS CREC, Lake Alfred, FL.

15 Evolution of Disease Management Programs: The Case of Florida s Citrus Industry 2010 to present: Citrus Black Spot was found in a southwest Florida citrus grove and appears to be confined to this area. Pesticide sprays: processed juice fruit 8-9 times per year fresh market fruit 14 times per year

16 Increasing Grove Care Costs for Managing Diseases (Cultural Care Costs Only) (US$/Acre) Total Costs (including spray costs) WITH CANKER, HLB-GREENING AND BLACK SPOT % Increase Spray Costs % Increase Valencia (Central) (8) 1, % % Hamlin (SW FL) (9) 1, % % GFT (Indian River) (14) 2, % % Source: Ronald P. Muraro, UF/IFAS CREC, Lake Alfred, FL.

17 Increasing Grove Care Costs for Managing Diseases (Cultural Care Costs Only) Total Costs Spray Costs ( US$ / ACRE) (including spray costs) ANNUAL BASE GROVE CARE PER ACRE (Mature Grove) Valencia (Ridge) (2) 1, Hamlin (SW FL) (2) 1, GFT (Indian River) (6) 1, WITH CANKER % Increase % Increase Valencia (Ridge) (3) 1, % % Hamlin (SW FL) (4) 1, % % GFT (Indian River) (10) 1, % % WITH GREENING Valencia (Ridge) (7) 1, % % Hamlin (SW FL) (8) 1, % % GFT (Indian River) (11) 1, % % WITH CANKER, HLB- GREENING AND BLACK SPOT Valencia (Ridge) (8) 1, % % Hamlin (SW FL) (9) 1, % % GFT (Indian River) (14) 2, % % Source: Ronald P. Muraro, UF/IFAS CREC, Lake Alfred, FL.

18 Evolution of Disease Management Programs: The Case of Florida s Citrus Industry 2010 to present: Most Florida citrus growers have stopped eradicating HLB symptomatic trees. However, growers are continuing to focus on controlling the psyllid to reduce the HLB infection. At least 70% of growers are now using an Enhanced Foliar Nutritional Program to try maintaining the health and productivity of the citrus trees.

19 Table 3. Cost Comparison of Traditional HLB Management Program to Enhanced Foliar Nutrient Programs Traditional HLB Management Foliar Nutrient Alternative #1 Foliar Nutrient Alternative #2 Foliar Nutrient Alternative #3 Number Foliar Nutrient Sprays $/Acre $/Acre $/Acre $/Acre Production Costs 1, , , , Foliar Nutrient Program Total Production Costs Without Reset/Replacement Trees Cost Difference with Traditional HLB Management Total Production Costs With Reset/Replacement Trees 1, , , , , , , , Cost Difference with Traditional HLB Management Source: Ronald P. Muraro, UF/IFAS CREC and Fritz M. Roka, UF/IFAS SWFREC;

20 Break-even Price for Florida Processed Hamlin and Valencia Oranges Season Boxes of Oranges Produced Per Hectare and Per Acre Boxes/Ha Boxes/Ac , , , Delivered-in Price Per Pound Solids Processed Hamlin Oranges a WITH Resetting-Tree Replacement Citrus Canker-HLB - No Foliar Nutrients WITH Resetting/Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients NO Resetting/Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients Processed Valencia Oranges a WITH Resetting-Tree Replacement Citrus Canker-HLB - No Foliar Nutrients WITH Resetting-Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients NO Resetting-Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients a Assumes 6.2 pounds solids per box for Hamlin Oranges and 6.8 pounds solids per box for Valencia Oranges.

21 Break-even Price for Florida Processed Hamlin and Valencia Oranges Season Boxes of Oranges Produced Per Hectare and Per Acre Boxes/Ha ,112 1,235 1,359 Boxes/Ac Delivered-in Price Per Box Processed Hamlin Oranges a WITH Resetting-Tree Replacement Citrus Canker-HLB - No Foliar Nutrients WITH Resetting/Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients NO Resetting/Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients Processed Valencia Oranges a WITH Resetting-Tree Replacement Citrus Canker-HLB - No Foliar Nutrients WITH Resetting-Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients NO Resetting-Tree Replacement Citrus Canker- HLB/Greening With Foliar Nutrients a Box = 90 lbs. or 40.8 kgs.

22 Planting Young Citrus Trees in Today s HLB Environment Solid-Set New Plantings Reset-Replacement Trees

23 Season-long ACP control (foliar applications to prevent pesticide resistance to neonics shown in orange) Tree size Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Reset (<3 ) 1-2 yr (3-5 ) P A A B B A A P P A B B B B A P 3-5 yr (5-9 ) bearing P A A= Admire (imidacloprid); B=Belay (clothianidin); P=Platinum (thiamethoxam); Products are positioned for use at certain times of the year based on water solubility and likelihood for significant rain events.

24 Pest-Disease Control Costs for Establishing a New Citrus Grove in Florida Without and With HLB-Greening Soil Drenches Without HLB- Greening With HLB- Greening Cost Difference $/Tree Year # Year # Year # Total 3-Year Costs for Soil Drenches Foliar Sprays Year # Year # Year # Total 3-Year Costs for Foliar Sprays Total 3-Year Establishment Costs for Soil Drenches and Foliar Sprays Total Per Acre Costs at 145 Trees / Acre

25 Included in Resetting Costs for a Florida Citrus Grove Tree Removal and Site Preparation Nursery Tree and Planting Costs Reset Maintenance Costs (1-3 years) 6 soil drenches for psyllid control 2 controlled release fertilizer applications Pruning and sprouting (1-2 years) Spot herbicide with glyphosate General and miscellaneous costs (hand tools, etc.)

26 Planting and Annual Cultural Maintenance Costs for Reset-Replacement Trees in a Florida Citrus Grove Summary of Tree Replacement Costs with HLB-Greening Resets/Replacement Trees Per Acre $/Tree Tree Removal Costs Site Preparation and Planting Costs Supplemental Maintenance Costs (Yrs 1-3) Total Three-Year Cumulative Costs with HLB-Greening Total Three-Year Costs without HLB-Greening Cost Difference Source: UF/IFAS CREC

27 Summary / Conclusion / Comments

28 Summary / Conclusion / Comments Florida Orange Production Costs have increased more in the past eight years than any time period in over 40 years Costs to manage citrus canker and HLB-greening has increased production costs by 107% since Fertilizer costs increased more than 160% over this same time period Spray costs for controlling pests and diseases increased more than 170% Break-even costs also increased dramatically over levels -- From 33% to 39%, depending on variety and yield

29 Summary / Conclusion / Comments Costs for managing HLB-greening in Florida should level off Low-volume ground sprayers and aerial spraying are reducing psyllid control costs and allowing more frequent spray applications More growers are participating in the CHMAs program

30 Summary / Conclusion / Comments Costs for managing Citrus Canker in Florida will remain the same or possibly increase due to Maintaining the 21-day copper spray time intervals to minimize fruit drop and to grow blemish free fruit for the domestic and international fresh fruit markets. Early processed fruit varieties (Hamlin oranges) will require copper sprays to protect from excessive fruit drop.

31 Growers need higher fruit prices to cover today s higher costs

32 Current Citrus Cost Information