Opportunities and Challenges in the Global Citrus Industry

Opportunities and Challenges in the Global Citrus Industry

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Description: Global Citrus Industry Trends, citrus business, Cambuhy Farm, Citriculture in São Paulo State, Major problems faced by brazilian citrus industry since 1950s, Citrus tristeza virus, Fruit Fly, Mearlybug, Blight, Leprosis, Rust mite, Cancker, CVC, Sudden death, Greening, Effect of CVC.

 
Author: Jose Luiz Amaro Rodrigues (Fellow) | Visits: 1471 | Page Views: 3826
Domain:  Medicine Category: Biology Subcategory: Agricultural Sciences 
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Contents:
Global Citrus Industry Trends � Opportunities and Challenges

Jose Luiz Amaro Rodrigues CEO of The Cambuhy Company, Sao Paulo, Brazil ,

Point of view The presentation is a grower's grower s point of view (citrus business) �Major Challenges j g �Opportunities pp �Trends

Major trends in citrus industry
1. Globalization will continue to increase problems with p p pests and diseases, and production cost 2. Production technology will become critical and more complex; only those growers who can adopt to change will survive 3. Number of growers will decrease and the size of the groves will increase 4. Food safety, traceability and environmentally responsible production will be demanded by the consumer 5. Decreasing labor availability and cost increase will lead to modernized management of human resources

Cambuhy Farm

�Farm is about 14,000 ha (35,000 acres) ( ) with 6500 ha (16,000 acres) of citrus �Citrus production is about 5 million boxes, fully used for p y processing g �The farm also produces coffee and rubber �The farm has preserved 4000 ha of p natural forest

Citriculture in S�o Paulo State
� 600,000 hectares (1.5 million acres) � 315 millions of boxes (90 lbs/box)
�Fresh export 1 �Domestic consumption 29 �Processed FCOJ �Processed NFC 244 41

�88% groves without irrigation 88% � Rootstock:
�70% Rangpur; �Other: swingle, sunki, cleo;

� Main challenges: Diseases!!!!

Challendges: Major problems faced by brazilian citrus industry since 1950s

Greening Sudden death CVC Fruit Fly, Mearlybug, Rust mite 1960 Blight, Leprosis 1970 Cancker 1980 1990 2000 2004

Citrus tristeza virus 1950

years

Present Management Practices
Leprosis
Virus spread by mites
Chemical control of mites

Canker
Bacteria spread by rain wind, etc. wind etc
Exclusion Regulation Eradication

CVC
Xylem bacteria spread by sharpshooters; Similar to Pierce's Disease on grapes Healthy seedlings Vector control

pruning

Eradication

Sudden death
A new phloem disease that attacks Rangpur stocks
Inarching ( replace the rootstock)

HLB
Phloem bacteria spread by psyllids
Healthy seedlings Vector control Eradication

Regional control!! (neighbors)

Sudden Death

Effect of CVC

HLB 3 to 5 years

Greening wipes out the orchard, if not managed properly in less than 3 years

Picture Nov 23 2007 A neighbor's orchard 5 km away from Cambuhy

Effect of neighbors!!!!

Yield continues to increase in Cambuhy despite HLB since 2004
5.500 1.500

4.953 4.551
4.500 1.300

Total Production (in 100 boxes) P 00

3.811 3.651
3.500

1.100

900

773
2.500

668 2.161

683

648 589

696

721 658
700

500 1.500 1 500

445

612

712

300

500 100 sf.01/02 sf 01/02 (500) sf.02/03 sf 02/03 sf.03/04 sf 03/04 sf.04/05 sf 04/05 sf.05/06 sf 05/06 sf.06/07 sf 06/07 sf.07/08 sf 07/08 sf.08/09 sf 08/09 sf.09/10 sf 09/10 (100)

Production in 1000 boxes

Yield in boxes/hectare

Continued growth in yield is associated with better spray program and g y p yp g eradication of HLB infected trees Other factors contributing: CVC, Juice Price

Y Yield (box/hectar re) (m ply by 2.47 for bo ultip ox/acre)

4.028

4.155

4.177

4.302

Monitoring vector

Healthy seedlings

HLB management

Control vector- spray application

Inspection of symptomatic plants Eradication of symptomatic plants

NURSERY: MANDATORY PROGRAM SINCE 2003

Brazil: Thanks to CVC, indoor nursery became mandatory in(1997 03) before the CVC in(1997-03) arrival of HLB Florida: indoor nursery became mandatory after the arrival of HLB ( mandatory since 2008) California: has an opportunity to learn from these two experiences and prepare better

Recognizing early symptoms

People are trained to find out a single Plant with only one branch showing HLB symptoms in a healthy looking block; A difficult task!

Training

Training & Cross Inspection & Bonus p

Machines

Inspection with quality

Scouting alternatives

Vector monitoring
51 52 47 27 12 91 45 46 39 49 40 38 41 48 37 42 43 44 50A 36 35 53 54 55A 50 55 23 22 77 79 57 78 80 81 82 76 83 84 85 86 73 68 70 67 72 71 66 64 69 69A 65 61 62 63 74 75 20 21 59 60 26 90 07 25 14 1 8 19 153 0 16 34 94 92 95 96 93 98 05 99 03 97

89 88

87

Yellow sticky traps � monitoring HLB and CVC vectors

56

58

100 yellow sticky traps are placed strategically in different citrus blocks in the farm The traps are inspected every week, and the spray program will depend on the results of monitoring (spot spray versus aerial spray of the entire farm in two days)

Vector Control

1�.

2�.

Vector control is a continuing process not only within the farm, but it is also very important to manage psyllids around the farm by convincing neighbors.

A legislation for mandatory removal of HLB-infected trees is the key for success.

Vector control by plane

Mineral Oil 0.5 gallons/acre Provado (i id l id) P d (imidacloprid) 4 oz/acre Abamectin 2 oz/acre

Spray when flushes are 2 cms or vector population increases

Problems caused by high frequency sprays
�Secondary mites become out of control �Increase in scale insects �Continuing restrictions imposed by juice buyers on C ti i t i ti i db j i b different Insecticides �Difficulties in managing safe harvests (time between spray and harvest) �Development of resistance against new insecticides Specific �Specific characteristics of each insecticide effectiveness

Economic impacts

Economic impact of HLB control Impacto nos custos de citrus Young trees (up to 4 yrs)
Operation Scouting Insecticide y Systemic total Frequency 4 24 2 us $/acre 39 188 104 332
Frequency 12 12 12 us $/acre 72 15 19 107

Bearing trees
Operation p Input labor Machinery

Cost, 20 boxes/acre

Evolution of citrus costs (US$/box) (2000 to 2010)
Costs of harvest in citrus (US$/box) Costs of freight in citrus (US$/box) 160% 54,5%

Production Costs (US$/box)

3,90 3,95 3,50 3 50 2,85 2,87

4,33

118%
2,17 1,71 1,46 1,57 1,31 1,99

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

10/11 Or�

Costs Including costs of harvest and freight

Total Production in SP and Florida per year (1998 to 2010)
Florida and S�o Paulo Production (millions boxes)

619 589 552 530 502 496 495 524 518 479 446 400 356 362 328 327 361 352 348 366 355 360 350 281 219 233 223 230 203 150 169 148 129 158 129 165 242 592 603

98/99 9

99/00 0

00/01 1

01/02 2

02/03 3

03/04 4

04/05 5

05/06 6

06/07 7

07/08 8

08/09 9

09/10 0

10/11 1

11/12 2

12/13 3

13/14 4

14/15 5

15/16 6

16/17 7

17/18 8

18/19 9

S�o Paulo

Fl�rida

Total

19/20 0

Trends of Total Production in SP and Florida per year (1998 to 2020)
Florida d S� P l P d ti Fl id and S�o Paulo Production (millions boxes) ( illi b )

619 589 552 530 502 496 495 524 518 479 446 400 356 362 328 327 361 352 348 366 355 360 350 281 219 233 223 230 203 150 169 148 129 158 129 165 160 157 152 150 145 141 242 273 265 433 422 409 592 603

399

387

375

366

355

345

257

249

242

234

227

220

214

139

135

131

98/99

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

18/19

S�o Paulo

Fl�rida

Total

19/20

mai/0 07
2.391

jun/0 07 jul/0 07
1.956 1 956

ago/0 07
1.795

set/0 07 out/0 07
1.987 1 987

nov/0 07
2.121

dez/0 07 jan/0 08
2.010

fev/0 08
1.885

mar/0 08 abr/0 08
1.746

mai/0 08
1.682

jun/0 08 jul/0 08 ago/0 08
1.556

1.818

set/0 08
1.431

out/0 08
1.214

nov/0 08 dez/0 08 jan/0 09
1.048

International Market Orange Juice (US$ / T)

Bolsa de NY
fev/0 09 mar/0 09 abr/0 09 mai/0 09 jun/0 09
1.223 1.080

1.379

jul/0 09 ago/0 09 set/0 09 out/0 09 nov/0 09 dez/0 09 jan/1 10 fev/1 10 mar/1 10 abr/1 10 mai/1 10 jun/1 10 jul/1 10

1.344

1.565 1 565 1.625 1.962 2.062

Fonte: CEPEA

2.180

Prices (US$/box)

6,72 6 72 5,65 4,71 4,72

3,29 2,99 2,13 2 13 2,25 2,59 2,11

3,35 3,50

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

10/11 Or�

Prices

Prices x Costs (US$/box)

6,72 6 72 5,65 , 4,71 3,35 2,99 2,13 2 13 2,25 2 25 2,17 1,31 1,57 3,95 2,59 2,11 2,85 2,87 3,50 3,50 4,72 3,90 3,29 4,33

1,71 1,46

1,99

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

10/11 Or�

Prices

Costs

Reducing the number of growers
PARAMETER 2001 N� PRODUCERS 2009 N� PRODUCERS %

> 400 200-399 100-199 50-99 30-49 20-29 10-19 10 19 < 10

thousand trees thousand trees thousand trees thousand trees thousand trees thousand trees thousand trees h d thousand trees TOTAL

23 38 105 263 473 585 2.175 2 175 11.333 15.000

51 69 164 372 442 518 1.408 1 408 9.603 12.627

122 82 56 41 -7 -11 -35 35 -15 -16 %

�The number of growers will continue to decrease �The less efficient growers can not compete and are leaving the sector �The number of large growers are increasing

Opportunities

Most of citrus area will be HLB affected soon

Only those who can adapt will survive

On farm- biosecurity

All vehicles and personnel (shoes, hands, bags, tools etc.) entering the farm are disinfected An additional system of disinfection is set up for rented machinery. The trucks rented for fruit transport work exclusively for Cambuhy during the season This was introduced for canker prevention, but helps in keeping good general sanitation in the farm

New spacing
900 800 700 600 500 400 300 200 100 0 1980 1990 2000 2004 2005 2006 2008 208 408 310 549 833

480

510

�Lifespan of the trees decreasing �Increasing plant population from 200 to 850 plants/ha (80 to 325 plants per acre)

New materials
Better combination scion/rootstock
that provides:

Compatibility Smaller plants tolerance to diseases Productivity

Better spraying technology
�Reducing the water volume from 2000 L/ha to 400 L/ha (210 gallons/acre to 40 gallons/acre) �Better eficiency of use of the Active ingredient by reducing d d i drop size, adjusting pressure i dj ti �Better protection of the tractor drivers p �New equipments

Low volume spray

Reducing volume of spray from 210 to 40 gallons/acre

Machinery efficiency

�Bigger tractors �Increasing the speed of the operation �Bigger tanks �Reducing the number of tractors �Better protection of the workers �On board control

New mechanical Harvesting

Irrigation
� Full automatization of irrigation

�Efficiency of water use �Aplication of nutrient via water system �Better control of plant nutrition �Pesticide application via P ti id li ti i irrigation

Irrigation
Better control of soil water storage

Better management of human resources

� Motivation � Goals: to improve the efficiency of manpower, machinery and inputs

Certification

Rainforest Alliance certified orange production d ti
� RA certification has a comprehensive approach to the farm�s sustainability:

Orange Juice made from Rainforest Alliance certified fruit.

1) Full Traceability

3) Socially and environmentally responsible product.

2) Food safety and authenticity

31% of CAMBUHY FARM IS NATIVE FOREST

Environmental aspects
� � Ecosystem conservation Wildlife protection � � Water conservation Soil management and conservation ti

Social aspects
About 40% of Rainforest Alliance criteria are social aspects: � Di ifi d working conditions and f i t t Dignified ki diti d fair treatment t � Occupational Health and Safety � Sustainability of local communities and groups

Traceability G2G

Trends

Trends
�Florida and S�o Paulo will continue to be the major producers of orange for juice �Fruit growers will be linked to markets through contracts and trade agreements long-term

�California, Mediterranean areas, South Africa and Israel will be the major suppliers for the fresh fruit market �The production cost will continue to rise

�The price of juice will not decrease below US$ 1800.00 per ton

�The volume of juice not concentrated tends to increase.

Trends
� F it and juices with certified origin and certificates of Fruit d j i ith tifi d i i d tifi t f traceability and sustainability tends to have more value-added

� Exotic fruits will continue to fascinate consumers, as well as blended juices � California could be a producer of special juice (ex. Blood red orange, cocktail grapefruit, etc.)

� The mechanizated harvesting will be a reality within five years for processed fruit

Trends
�Critical factor will be the cost and availability of labor �The disease management will have to be regional-wide �New legislations will come to the aid of citrus growers �We can not see any definitive solution for the majority of plant health problems today

�A good disease management will allow good production with profitability even in the most affected areas.

Portugal

Trends
�New regions are going to be incorporated to the citrus fresh world N i i t b i t d t th it f h ld

�Retail chains are growing larger and more concentrated and to put pressure on price and quality �There will always be possibility to special products and novelty There

�The chains need a constant supply all year around pp y y

�The grower could operate in different regions to supply chains year around

New varieties, packaging, � �New varieties new packaging new presentations will be critical to maintaing sales growth

Production of Citrus in China

China
�China : 2 milion ha of citrus ? Production of 735 milion box ? �Will China achieve its goal of Will production? Will China's demand for citrus surpass its supply? �Will there be new markets for orange juice in China? �Will China's pomelo be a competitor to Florida grapefruit? �Quality of juice will be affected by HLB

Conclusions
1. Globalization will continue to increase problems with pests and diseases, and production cost 2. Production technology will become critical and more complex; only those growers who can adopt to change will survive 3. Number of growers will decrease and the size of the groves will increase 4. Food safety, traceability and environmentally responsible production will be demanded by the consumer 5. D Decreasing l b availability and cost i i labor il bili d increase will l d to ill lead modernized management of human resources

I welcome you to visit Cambuhy joseluiz@cambuhy.com.br

That is all folks !

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