Agriculture: A year after the freeze
Pacific Coast Business Times
By Stephen Nellis
Staff Writer
A brutal freeze last January devastated some California fruit farmers, destroyed their crops and damaged their trees.
But one year later, agribusinesses that escaped the frost say last year was one of their best ever. They are optimistic about 2008.
Harold Edwards, chief executive officer of Limoneira Co., the Santa Paula-based lemon and avocado powerhouse, said: “The freeze was devastating across the industry, but it was just a little less devastating in areas where we have assets. All in all, the freeze turned out to be a very positive thing for our company. We experienced our most profitable year ever in our agribusiness.”
A large contributor to Limoneira’s good fortune last year was a stellar lemon crop, one that turned an $11 million profit, up from the $5 million lemons earned the previous year.
The cold-but-not-freezing weather that hit Limoneira’s trees bolstered lemon production, and market forces boosted the price. “Lemons are typically oversupplied,” Edwards said, noting that federal market orders typically hold up the fruit’s price. “[The freeze] brought into balance our supply with demand.”
While Limoneira’s lemons fared well, its avocados didn’t. In 2006, the firm produced about 18 million pounds of avocados. The 2007 forecast called for 10 million pounds – but only 4 million pounds survived the freeze.
Statewide, the avocado crop for 2006-2007 was the weakest since the 1989-1990 season, and scored the slimmest sales since 1995-1996, according the California Avocado Commission.
And with avocado trees, Edwards said, the damage is lasting. He expects a muted crop again this year and perhaps even next year. Typically, a U.S. shortage of avocadoes wouldn’t translate into a higher price for the fruit because producers from Chile, Argentina and Mexico would fill the supply gap. But those areas experienced freezes and production disruptions as well, Edwards said.
“All of this spells shorter supplies, which will translate into higher prices for consumers,” Edwards said.
Santa Paula-based Calavo Growers also notched a record year last year, despite the freeze. The company blew past the $300 million mark in revenue.
In a news release, Calavo Chief Executive Officer Lee Cole cited double-digit sales growth in the company’s fresh and processed avocado businesses, where revenues rose 10 and 13 percent, respectively – another sign that consumer demand for the fruit was high, despite choked supplies.
A diverse agribusiness portfolio also likely helped Calavo mark a record year in spite of tough times for avocados.
“The new agreements that move our company significantly into the fresh tomato, mushroom and pineapple categories are solidly based on our commodity-produce distribution and marketing prowess, which extend far beyond our core avocado capabilities,” Cole said in a news release. Although Ventura County’s strawberry producers took a short-term hit after last year’s freeze, they finished out the year strong and with no lasting effects into this year, said Earl McPhail, Ventura County agricultural commissioner.
“They lost six to eight weeks of production, but ended up coming back pretty well,” McPhail said. “The weather came back just about perfect for them.”
In the Santa Maria Valley, strawberry farmers initially lost about four weeks of production to the 2007 freeze, but wound up with a record production year, said Santa Barbara County Agricultural Commissioner Bill Gillette.
“On the short term, we lost a small percentage of flowers and fruit,” said Daren Gee, the owner and operator of DB Specialty Farms in Santa Maria. “In the long run, the cold strengthened up our plants, and even though we harvested a little later, we ended up with a greater harvest than anticipated.”
The production cycle delay also helped Santa Maria strawberry growers miss an early market glut that left Oxnard producers struggling with lowered prices. Good timing and ever-growing consumer demand equaled yet another good year last year, Gee said.
“I think we have to say something is going on,” Gee said. “The strawberry industry in California has increased sales the last four years in a row. We have to attribute most of it to the quality of the varieties that are being sold right now.”
For this year’s strawberries, all eyes are on the Oxnard plain, which, when combined with the Santa Maria Valley, makes up more than half of California’s strawberry land.
Consumers will get their first taste of 2008’s strawberries from Oxnard, and their reactions to the berries will temper their buying attitudes the rest of the year.
Oxnard’s berries likely will start pouring in later this month, with Santa Maria’s following by February.
“If we run into some quality issues, demand drops like a rock,” Gee said. “Say you have a rain and the fruit isn’t holding up, and people buy berries and they rot right away. It turns people off to strawberries. That first go around – if it’s not good, it makes it a lot harder to sell strawberries.”
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