Fruitful harvest Limoneira reports record lemon profits
Ventura County Star
By Jim McLain
Correspondent
Despite a devastating freeze in January, a major Ventura County citrus and avocado grower announced record profits this week.
Limoneira Co. said its lemon crop turned an $11 million profit this year, more than double the $5 million that lemons earned the company in 2006.
CEO Harold Edwards said in a letter to shareholders that the cold damaged relatively small quantities of Limoneira's fruit while many other growers incurred major losses.
Limoneira's lemons sold for premium prices because the overall market supply was reduced.
But the Santa Paula company's avocados did not fare nearly as well. More than 40 percent of that crop was damaged, resulting in a break-even year, down from a 2006 profit of $6 million, Edwards said in his letter. The damage is expected to hurt Limoneira's avocado production for the next three years. Other growers reported similar or worse losses to avocado trees, which were either killed or badly damaged in the freeze.
Still, Limoneira's results should help boost the outlook for the Ventura County ag industry, which grossed $1.5 billion in 2006 and provides about 20,000 seasonal jobs.
The Jan. 12-19 cold snap was one of the worst on record, causing crop damage totaling $280.8 million in Ventura County, Agricultural Commissioner Earl McPhail said.
While some growers lost their entire crops, others escaped relatively unscathed. That was attributed to microclimates that can reduce the impact of frigid weather in some areas. Winds or slightly warmer temperatures can spare one grower's crop, while another nearby incurs heavy losses.
Freeze damage can be hit and miss, McPhail said, similar to the havoc tornadoes bring.
"That's pretty much the scenario," he said. "Those who had lemons have done very, very well this year, while those who got frozen out have had it really tough. A lot of people just don't have anything. They weren't able to harvest anything."
McPhail estimated the freeze losses in a Jan. 23 report to the Board of Supervisors, predicting the $280.8 million toll probably would increase. However, he has not raised the figure.
He said this week he still believes the loss amount is "fairly accurate." Of the county's 1,800 to 2,000 commercial farming operations, about half reported losses.
Freeze damage estimates show nursery stock was the hardest hit, with losses totaling $85.4 million. That was followed by avocados, $66.5 million; berries, $62.8 million; lemons, $46.6 million; oranges and other citrus, $13.8 million; and leafy vegetables, $5.5 million.
The estimates reflect losses for the current crop only and do not reflect additional costs, including losing trees that took years to grow, replanting and reduction of future crop revenues. The damage report also didn't show the much larger effect of the freeze on the local economy, which McPhail estimated at $750 million. Industries dependent on agriculture, such as trucking and packaging, also suffered losses.
Limoneira, founded in 1893, is one of California's oldest and largest agribusiness companies. It produces crops on about 7,000 acres across California. About 75 percent of the company's 2,000 acres of lemon orchards are in Ventura County, said John Chamberlain, director of marketing.
Limoneira has another 1,400 acres of avocados, with all but 100 of them in the county.
In the aftermath of the freeze, Limoneira had a good supply of lemons while many other producers did not.
"It's supply and demand," said Chamberlain. "If the supply is really limited, then obviously the pricing goes up."
In his letter to shareholders, Edwards said strong operating profit growth in the company's orange and specialty crop operations this year led him to believe that, despite the freeze, Limoneira will report robust growth in its agribusiness operating profits over 2006.
Edwards also forecast a 20 percent growth in Limoneira's housing and commercial real estate profits, a 34 percent growth in profits on its leased land, a 50 percent growth in organic recycling profits with its partner Agromin and "significant growth" in operating profits contributed from investments.
The closely held company's fiscal year ends Oct. 31, Chamberlain said. In September, Limoneira's board of directors voted a $1-per-share dividend for the third consecutive year. He declined to say how many shareholders own Limoneira stock or divulge the number of shares outstanding.
The company's stock is "thinly traded" on the over-the-counter market, or pink-sheets, under the ticker symbol LMNR, Chamberlain said.
In recent years, Limoneira has diversified. Among other things, it operates a shopping center and an agriculture tourism business that offers hot-air balloon rides and catered dinners in orchards. The company has also proposed a development of up to 1,500 single-family homes, condominiums and apartments on land it owns just east of Santa Paula. | 
