The Pressure Is On for US Citrus Marketers
When it comes to on-farm cash flow, mandarins are dominating the US fresh citrus space. With supply booming, the leading mandarin suppliers will have to make sure that demand for mandarins follows suit.
Mandarins, also known as ‘easy-peel’ oranges, have rapidly come into favour with consumers over the past decade. And they’re popular with farmers too. Based on current prices and costs of production, mandarins appear to be the clear choice for new citrus plantings in California, but the mandarin-versus-orange and mandarin-versus-lemon profitability spreads are likely to narrow. Maintaining current price levels, in light of domestic supply increases, means mandarin marketers need to resist the urge to lower prices for market share gain and continue to work on the branded presence of easy-peel in the US and abroad.
Lemons have also continued to grow in popularity, with US domestic demand currently at an all-time high. Lemons appear to have less supply-side price pressure than mandarins, but that can quickly change, as increasing demand, coupled with supply limitations have resulted in favourable prices. Decoupling the price impacts of short-term supply-side issues, from those of longer-term, positive, global demand trends, is the key challenge for lemon suppliers.
The growing popularity of mandarins is eating into the traditional domestic demand for navel oranges. However, there are forces on both the supply and the demand side that could continue to support higher navel prices in the future. Navel orange suppliers must continue to focus on improving the eating experience in both domestic and export markets to ensure that recent, higher price levels can be maintained.
Find more details on developments in the US citrus market in the Rabobank AgFocus “U.S. Citrus—How Does Easy-Peel Change the Game?”
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Roland FumasiSenior Analyst - Fruit, Vegetables, Floriculture Read more