USDA is projecting U.S. citrus output to decline over the next decade much of which is attributable to HLB challenges in Florida and Texas. Recognizing that tonnage output is now being reduced, USDA anticipates existing production acreage will not be replanted to citrus. USDA forecasts a 1.3 Billion pound reduction in tonnage.
Meanwhile, South Africa anticipates a 25% increase in potential export volume by 2021. In 2018 South Africa shipped a record 2 million MT which translates to another 500k MT available in 2021. Much of that production is anticipated to be in lemons and mandarins. At one time, South African industry officials believed a new rule from USDA/APHIS would be allowing additional tonnage into the United States from the Eastern Cape. Concerns expressed by CCM and others have placed that rule on hold for the time being. A South African citrus official has stated that “it is essential that this rule be finalized without further delay.” Discussions with USDA have been held by South African officials to that effect.
The dichotomy is that much of the U.S. production reduction is in processed product whereas the increased tonnage to be exported is fresh, presenting a greater challenge to the California industry which is obviously fresh oriented. The crystal ball also has visions of more fresh tonnage originating in China, Brazil, and Australia in the coming years. Where do they want to go? The U.S. market remains the go-to opportunity in which the competitive disparity in costs offers margins to offshore producers that California growers only think about.