California citrus growers battle production cost increases in a depreciating market

Some of California's main citrus fruits are approaching the end of their season, including mandarins and navel oranges, which are expected to wrap up by the end of June with final harvests.
Valencias, the summer oranges, recently started their season and will supply the marketplace throughout the summer, alongside the final navel orange harvests.
Casey Creamer, CEO of California Citrus Mutual, told FreshFruitPortal.com that committee members have concluded they overestimated the state’s supply this year.
"We are starting to see demand pick up, which is good for the growers, but also it was a missed opportunity throughout the season," Creamer said.
Creamer noted that commodity price increases have not kept up with rising production costs, making it harder for growers to maintain profitability.
However, in terms of fruit quality, Creamer said it has been excellent across the board.
Overall, the quality of the year has been really good. However, CCM expects that navel production will fall short of the initially projected 78 million-carton crop.
Lemon struggle
Lemon production has been among the hardest-hit segments this season.
Creamer explained that it’s been "extremely difficult for lemon growers, not only this season but the last couple of years, particularly in the District 2 area."
District 2 refers to the central coast region of California, including the Ventura area.
This area’s production typically picks up just as imports begin arriving in greater volume, which has impacted demand for local lemons in a depressed market — well below the cost of production.
"A lot of growers have had to make the difficult decision to pull their orchards because they can't sustain the losses," Creamer said. "It's been at least three consecutive years of negative returns for most growers in these regions."
He acknowledged that the industry is challenging and that growers are "not very optimistic."
Rising production costs
Creamer assured that, on average, production costs for citrus growers in the state have been up 50% since 2020.
It varies, however, depending on factors like water availability, pruning practices, labor costs, and variety. Fortunately, the water availability issue has been generally positive in the last few years, with good rainfall levels.
"This year has been average, so that we can make our way through this, but there is definitely more supply to catch," Creamer said.
In past years, orange prices have been down, mainly due to thrips damage reducing the supply of quality fruit.
"Overall, pricing has added or depressed from last season, while costs continue to rise, so we are not seeing the movement of prices that support the increased costs," Creamer indicated.
Import season and market deficit
Imports from Southern Hemisphere citrus producers have been lighter than in previous years. However, volumes remain significantly higher than what California growers saw before 2017.
Creamer explained that California citrus is now experiencing a trade deficit and has lost ground in export markets.
"Imports are coming in at greater numbers, and now we are at a $1.2 billion deficit in citrus domestically. This means that we are importing $1.2 billion more of citrus than we are exporting to other countries," Creamer explained.
Around 2017–18, the industry had no trade deficit. The sharp rise in such a short time is unprecedented and reflects the sheer volume of imported citrus entering the U.S. due to expanded access agreements and acreage in Southern Hemisphere countries.
Additionally, harvest seasons have lengthened. Previously, each hemisphere had a six-month gap without overlap. Now, seasons can stretch to 10 months, creating overlap and making it harder for California growers to compete.
Exports of California citrus
This year, tariff-related challenges that have impacted many U.S. sectors hit late in the California citrus export season, which typically peaks from January to March.
"Some of the impacts we saw were towards the later part of the season. However, one of the major impacts was in Canada, where we lost around 55% of the marketplace towards the end of the season due to tariffs," Creamer said.
Retaliatory tariffs with Canada remain in effect, and Creamer said the industry hopes to restore trade ties in the upcoming season.
"We're watching this thing closely, and we hope we don't see any new tariffs applied to our major export markets," Creamer said.