Aussie citrus growers looking for exit
Riverina Citrus chairman Farnk Battistel told www.freshfruitportal.com the industry has been able to hang on financially due to land ownership and very efficient procedures in the face of one of the world's highest labor costs.
"A lot of properties here have been in the family for years so there's not that much they need to pay on property loans, but it's more to do with high production costs - I think most would be looking to sell if they could, but it's a matter of finding buyers," he says.
"We've got the production costs down as low as we possibly can and we have one of the most efficient citrus industries in the world, but it's just our country has one of the highest labor costs in the world. With South Africa and the U.S. we'd beat them hands down in efficiency for our processes, but the cost of one worker in Australia is about five times that of South Africa, and maybe two times what they have in the U.S.
He says the returns growers are getting are only half what it costs to produce the fruit despite excellent and strong global demand, in a situation where it's difficult to find any global citrus market that is not saturated.
"As a result you've got a lot of growers re-grafting out of the export citrus to meet the needs of the Australian market. They're getting out of the late lanes and the washingtons. Even though late lane prices have held up, they're not as high yielding as other varieties.
"I don't think there are any new plantings going on at the moment, but maybe you'd see it in mandarins or blood oranges - all over the place markets are saturated.
"In Asia they can take more volumes while in the U.S. it's mainly about size, but even the premium market in Asia is about the same as the U.S. market in terms of making returns."
He says returns have 'improved a fraction' for Australia's citrus industry as the washington season's come to a close, with the industry now shipping its late navels.
"Chile shipped in more oranges into the U.S. and they had the advantage of being closer I suppose, while in Asia the South African Valencias are competing with us now, and they're a good looking fruit too. Not as tasty as ours but they look good."
Photo: Flickr, Blue Waikiki