Whether it be an overhang of South American imports, trade barriers in China or expectations for slightly smaller fruit this season, the Californian citrus industry is not short of challenges. But on the bright side there are many more export destinations including Canada next door, a growing South Korean market and Australia with improved import protocols. Growers have found encouraging signs in the fields and are looking at new ways to raise the category's profile at home and abroad. 

A month ago California Citrus Mutual president Joel Nelsen told Fresh Fruit Portal about an oversupply problem in the U.S. market, and the issue has not abated since then.

"There was an example of 300 loads of citrus that arrived this past week from Chile and they’re coming in at a much lower price than what our fruit is," says Nelsen.

"It’s a little bit of a later start than last year and there wasn’t a gap in supply, so you’ve got an oversupplied market to begin with and you’ve got some inexpensive fruit to compete with. It's not been the easiest start but it's one we’re working ourselves through," he says.

"But our fruit has been coloring up nicely and the nights have gotten cool. Size continues to be a challenge and we're bypassing a lot of the traditional blocks of fruit to go into groves that have a size structure that the consumer wants."

On that note, Kings River Packing sales representative Jesse Silva points to some pleasant surprises in the orchard. 

"We had a heavier set on the tree this year compared to years prior where we had lighter sets. That meant more pieces of fruit on the tree, which typically tells us smaller sizes," he says.

"But we started going in and picking and we’ve actually come up with more big fruit than we thought.

"So the size of the fruit is trending well right now. We don’t have a big influx of a lot of small fruit as we thought."

Silva clarifies the fruit will still be more medium-sized overall, and he is happy with the quality so far for early Navels like Beck and Fukumoto.

"Overall the eating quality of the fruit is good. Brix - which is the sugar - is pretty normal for this time of year at between 10 to 12, and we're seeing good color in the fruit now," he says.

"The seasonality was about two weeks behind last year, so we do have a later start than normal but everything is progressing well at this point.

"As the season gets deeper and we get deeper into November you’ll start to get deeper color Navels. In December and January, that’s when the color kind of peaks and then we’ll be into different mid-season varieties."

Silva also highlights the excess Southern Hemisphere fruit that has been in the market, mostly in oranges and mandarins but not in lemons.

"We’re still battling that. I think most retailers and most marketers are wanting to purchase Californian product instead of Chilean product; they’re making that transition," he says.

"There are some who want to stay in imports because the eating quality of the imported fruit is better than the early season fruit, and the overall color of the fruit is darker with the imported fruit."

But will the later start also mean the season goes for longer? In response, Nelsen discusses how both market-driven and agronomic management could influence the outcome. 

"Time will tell but given we’re off to a later and a slower start, we’ve got more fruit and we're anticipating a loss in the China market so that increases the volume we’ve got to move," he says.

"I can see us having good quality product well past the 4^th of July. Time will tell but that's what I believe."

He mentions growers are increasingly adopting techniques discovered by researchers from the University of California Riverside to spray stems with 2,4-D.

"We can strengthen the stem and hold the fruit on the tree longer, because we store the fruit on the tree; we don’t put it in storage for four months," he says.

"It took a while to work out how to make the best use of it for the late Navels, but we figured it out.

"We can sell a good piece of fruit in July, there’s no question about it."

Alternative export markets

Despite the situation with China, Nelsen expects to see good developments in alternative export markets for Californian citrus, ranging from Navels to easy peelers to lemons to specialty varieties.

"People forget that Canada is our number one export market. If we can just increase that by a couple of percentage points, that’s a lot of fruit into Canada," says Nelsen.

"Korea continues to expand. We did the Korea free trade agreement [in 2012] that set in motion an opportunity for our industry to arrive at a lower cost because the tariff was reduced.

"So Korea is a good market for us. Japan is kind of flat, other Asian countries are flat, and we're going to see if we can move more fruit into Australia this year."

He says Australia has sometimes tended to change the rules, leading to inconsistent export volumes. In recent years the Californian industry has had to alleviate concerns from the Australian biosecurity authorities around thrips.

"If we don’t get it done quite right from a cultural perspective they’re allowing fumigation," he says.

"We've got a new material that they’re allowing us to use that’s been on the market for a number of years...what we'll do is put it into our cold rooms and put a light coat of phosphine in the end and that knocks out any pests of concern that they may have.

"It’s something that we can now utilize and our farming practices have changed in that there is a pest that we don’t worry about but they felt it was a pest of concern, so we’ve taken steps to eliminate that."

He says detections of the pest are down significantly, leading to a "real opportunity to move more fruit into Australia this season". 

"Australians were out here to talk to us about their protocols, so we’re optimistic that we’re going to find a hole for that ‘dislocated’ fruit," he says.

U.S. market trends: Greater recognition for easy peelers and a boom in specialty varieties

Silva says that in light of the challenges presented by the Chinese market, his company is pretty lucky to heavily focus on the domestic deal.

"We do some export but not to China. We focus on other export areas, so the other commodities throughout the summer have been really affected like grapes and tree fruit," he says.

"China is still taking something, it’s just not at the volumes they had before but they’ve been able to open up new markets and that fruit is going into other avenues."

When asked about the challenges of competing in easy peelers when there are such well-recognized brands in the market like Cuties of Sun Pacific and Halos of Wonderful Citrus, Silva says Kings River Packing has a "very good following" within its customer base.

"The Halo and Cuties brands have done a great job of promoting Californian mandarins and I think people are educated now – they know there are a lot of options of good quality mandarins in the marketplace," he says. 

"There are a lot of opportunities now where people are wanting to look elsewhere with smaller companies that do a good job and do high quality fruit."

He claims that's the very position he feels Kings River is now in.

"We've planted it for a number of years and we have a huge program of high-quality mandarin varieties that differentiate us from the big branded guys.

"We have different soil types that we grow in – there are climates and regions that give us better sugar levels, so we made our bed that way. 

"It’s definitely a beneficial thing that Halos and Cuties have gotten the recognition they have, as they’ve definitely driven that category and there are a lot of consumers now who purchase based on the actual fruit in the bag. They may reference Cuties or Halos, but they know it’s a mandarin."

He says customers are now asking for different mandarin varieties like Gold Nuggets, Tahoe Golds and several other cultivars.

"There are a lot of varieties that have a niche market, so those things are driving the category as well, getting consumers excited about mandarins in general," says Silva.

"Then we do all the specialty varieties – we do lemons and Cara Caras and blood oranges, different mandarins, minneolas; we do a wide variety of citrus to be kind of a one-stop-shop for our customers."

He says Kings River is constantly retooling 300-500 acres a year and looking for new varieties, planting new crops and rotating older varieties.

"We’ve seen a huge push with heirloom Navels within the last five or six years; we’ve always had heirloom Navels – people have loved the way they’ve eaten and we get a lot of consumer responses about how good the fruit is.

"We've found a way to go to market with our heirloom Navels from trees that were planted back in the late 1800s - it’s been a good return for growers and they’ve been able to really market that on the shelf.

"We’re even looking at getting into other varieties of citrus that we don’t do now later on in the future."

The company's management are clearly optimistic and planning for the future, with Silva also highlighting developments at the packing level.

"We just put new solar system in our facility and we added 80,000 new feet with new docks and holding areas for our fruit. We’re in a big growth pattern as a company now too, and over the next few years we’re going to build a new facility. 

"Continually adding and evolving and that’s kind of what you need to do to keep up in this industry – change is a vital thing."

When asked about his take on specialty varieties, Nelsen says the Cara Cara is growing in stature within a category dominated by Navels, mandarins and lemons.

"The cara cara is a hot commodity. It is a very good tasting orange; it has a little bit of a different color so it’s unique, its flavor is very consistent," he says.

"The blood orange, it’s taking off slowly – I think part of the problem is just the name of it quite frankly. 

"The pummelo has levelled off. It's found its niche markets and certain cities domestically that have a high Asian population."

He says grapefruit, a citrus category usually more associated with the states of Texas and Florida, is also a growing commodity for the Californian citrus industry.

"There are new rootstocks and we’re finding that we can do a better job producing a consistent flavoured piece of fruit, so there’s more acreage going in," he says.

"Texas has got excellent varieties, Florida has always had good varieties. We’ve just never had the right rootstock for our soil and our climate, and now we think we’ve got one. The consumer will tell us in all honesty. We’re optimistic now."

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