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Florida Citrus Industry Has Sweet And Sour Outlook

October 9, 1988

ORLANDO, Fla. (AP) _ Florida’s $1.3 billion-a-year citrus industry is grappling with problems that overshadow the beginning of what otherwise could be a storybook season.

Prices of orange juice futures traded on the New York Cotton Exchange closed Friday at $1.707 a pound for January delivery, up about 100 percent in the past two years, the Orlando Sentinel reported Sunday.

But there is continued legal wrangling over the canker eradication program, an investigation into the export practices of processors that could give the industry a black eye, and an unknown impact on the global orange juice market from Brazil, which in 1982 surpassed Florida as the world’s largest orange producer.

″The citrus industry is in good shape economically, but those who have fruit are doing very well, and those who don’t have fruit are struggling financially,″ Bobby McKown, executive vice president of Florida Citrus Mutual in Lakeland, told the newspaper.

The 40-year-old trade group is the state’s largest citrus growers association, with more than 12,000 members.

Mild weather prevailed for the past three winters, spurring Florida growers to plant a record-high 125,000 acres of fruit trees in 1986 and 1987. But growers on the northern edge of the Citrus Belt, hit hardest by the earlier freezes, accounted for about 30 percent of the new plantings.

Members of the Florida Citrus Commission, which oversees the state Citrus Department, say they expect about 147.7 million boxes of oranges and 54.4 million boxes of grapefruit to be picked this season. A box equals 90 pounds.

That would be almost 50 percent more oranges and 22 percent more grapefruit than were harvested during the freeze-shortened 1984-85 season.

Growers reaped a record $1.3 billion for their fruit during the 1987-88 season, eclipsing a record $1.03 billion set in the bumper crop season of 1979-80, according to a preliminary report released nine days ago. The wholesale value, including the cost of harvesting and transportation, was estimated at about $3.3 billion.

Although high prices are lifting the spirits of growers, the industry is facing severe tests on a number of fronts.

The U.S. Supreme Court last week let stand a Florida court ruling that requires the state to pay full market value for healthy trees destroyed in the canker eradication program. About 20 million trees were burned, and growers were reimbursed about $17 million as partial compensation. Full compensation might cost more than $200 million.

Officials of the state Agriculture Department say it would be up to the Legislature to decide any additional compensation, but legislators have shown little enthusiasm for taking such action.

Another controversy threatens to spill into courtrooms. U.S. Customs officials in Tampa last week announced that criminal fraud charges had been filed against Allsun Pure Juice Corp. The Polk County juice processor is charged with defrauding the government of at least $750,000 in import fees by mislabeling products to obtain import fee refunds.

An investigation of the practices of other processing companies is continuing, said Brad Knutter, a Customs fraud investigation supervisor.

″Obviously we can’t guarantee (other) indictments, but if we didn’t think there was more fraud out there, we wouldn’t say that we consider this just the beginning,″ said Knutter.

Brazil is the final question mark.

If Brazilian crops are large and juicy, that can mean lower prices for Florida fruit. But if the Brazilians decide to export more orange juice to Europe, as they did last year, that can mean higher prices in Florida.

While Florida growers and processors have a difficult enough time keeping track of the state of their own industry, divining the situation in Brazil is even tricker. Brazil does not conduct its own scientific surveys to make monthly crop forecasts as does Florida.

″Brazil is definitely the wild card,″ said Phil Herndon, president of Alcoma Packing Co., a citrus processing company in Polk County.

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