Production, Utilization and Demand The Texas citrus industry is located in a comparatively small area (Hidalgo, Cameron, and Willacy counties) in the Texas Lower Rio Grande Valley. Since the growing acreage of Texas citrus is prevalent in this region only, the industry is subjected to heavy impacts from weather extremes and other extraneous factors. This industry was greatly impacted by freezes that hit the Rio Grande Valley in 1983 and 1989. While one could postulate that a decade without extraneous weather factors would propel the industry back to pre-freeze levels of production, the reality is that the urbanization of the Rio Grande Valley has limited acreage re-growth. Fortunately, by implementing new hybrids, production levels have improved to 60% of pre-freeze levels without requiring the same acreage. The bearing acreage of citrus in the Rio Grande Valley is presently at 29,000 acres. The 1983 freeze destroyed 47,000 acres of the 69,000 acres of citrus. By 1989, acreage had grown to 35,700; however, the December 1989 freeze destroyed 24,000 acres. By combining the devastation of the groves due to the freezes with the booming urbanization of this area, it can be assessed that the acreage levels of citrus will not return to prefreeze levels. Production and utilization data show eleven years after the last freeze, the industry has not been able to return to pre-freeze levels. For comparison purposes, an average of the five years preceding the 1983 freeze was taken. The current level (2000-01 growing season) of production is at 83% of the 5-year period for grapefruit and 42% of the 5-year period for oranges. After the 1989 freeze, production levels fell to zero for the 1990-91 season. Since the 1989 freeze, there has been a 296% increase in the production level of Texas citrus. Production utilized for the 1999-2000 season was 237,200 tons or 68% of the 1983 prefreeze average for grapefruit and 70,550 tons or 31% for oranges. The most recent season completed (2000-01) estimates yields of 288,000 tons or 83% of the 1983 prefreeze average for grapefruit and 94,988 or 42% for oranges. Roughly 25 countries produce citrus worldwide. Of these countries, the United States ranks first in grapefruit production and second to Brazil in orange production. The three major production areas of the United States (California/Arizona, Florida, and Texas) have all fell victim to acreage reduction due to weather, urban expansion, and general economic conditions. However, simply considering acreage reductions alone does not provide an accurate picture of the status of the industry. Other factors, such as orchard age, density, rootstocks, variety, management, climate, etc, determine orchard productivity. Production and utilization data provides a clearer picture of the supply and market share, than actual acreage data. GRAPEFRUIT Production, utilization, and value of all grapefruit production in the United States are presented in Table 1 by production area for the 1978-79 season through the 2000-01 season. Texas ranks third in terms of production and in market utilization (both fresh and processed), representing an average of 6.86% of total U.S. grapefruit production since 1978-79. Florida supplies nearly 72% of the U.S. fresh grapefruit market, however, over half of their total production is sent to processing. Texas and California/Arizona, on the other hand, utilizes an average of over 60% of their grapefruit in the fresh market. Table 1: Annual production, utilization and value of US grapefruit by area for 1978-2001 Season Production Fresh Processed Percent Value (tons) Utilization Utilization (tons) (tons) Fresh ($1000) California/Arizona 1978-79 154,350 118,115 56.65% 36,967 155,540 185,410 45.62% 29,997 198,150 155,070 56.10% 48,338 157,415 121,781 56.38% 25,325 136,992 60.38% 32,822 111,798 64.87% 40,414 122,980 69.00% 81,869 400,688 37.96% 72,822 149,410 62.99% 70,175 125,625 66.06% 65,388 104,353 68.69% 58,085 131,823 66.08% 97,460 117,518 66.27% 67,133 146,060 65.94% 77,447 141,906 62.68% 52,041 272,465 1979-80 340,950 1980-81 353,220 1981-82 279,196 1982-83 345,770 1983-84 208,778 318,196 206,398 1984-85 396,720 1985-86 645,818 273,740 245,130 1986-87 403,675 1987-88 254,265 370,175 244,550 1988-89 333,325 228,973 1989-90 388,600 256,778 1990-91 348,400 230,882 1991-92 428,800 1992-93 282,740 238,319 380,225 1993-94 370,175 241,602 128,573 65.27% 55,625 241,971 116,480 67.50% 60,207 213,462 98,088 68.52% 57,715 218,889 85,961 71.80% 55,064 92,594 68.59% 71,068 29,648 89.01% 83,010 213,797 42,478 83.42% 59,784 226,125 174,368 51,758 77.11% 52,166 Average 347,715 220,971 126,744 65.08% Percent of US 13.38% 18.64% 8.97% 1994-95 358,450 1995-96 311,550 1996-97 304,850 1997-98 294,800 202,206 1998-99 269,675 1999-00 240,028 256,275 2000-01 a 59,725 18.15% Total Florida 1978-79 2,125,000 1979-80 2,329,000 841,075 1,283,925 39.58% 177,009 1,500,207 35.59% 246,458 1,408,152 34.13% 248,294 1,333,693 34.76% 165,540 896,198 46.48% 129,851 1,030,158 40.74% 170,511 1,233,010 34.06% 228,661 1,153,025 41.97% 267,067 828,793 1980-81 2,137,750 729,598 1981-82 2,044,251 1982-83 1,674,501 710,558 778,303 1983-84 1,738,461 708,303 1984-85 1,870,000 636,990 1985-86 1,986,875 833,850 1986-87 2,116,500 1,226,635 42.04% 329,098 889,865 1987-88 2,288,625 982,175 1,306,450 42.92% 387,446 1988-89 2,326,875 1,015,835 1,311,040 43.66% 332,849 1989-90 1,517,250 567,120 950,130 37.38% 260,275 1990-91 1,916,750 1,016,728 900,023 53.04% 328,770 1991-92 1,802,000 831,258 53.87% 349,688 1,359,830 41.98% 236,717 1,213,290 44.08% 271,114 1,422,093 39.93% 231,779 1,254,048 43.64% 211,180 1,383,928 41.64% 207,607 1,206,575 42.70% 174,956 1,151,920 42.39% 216,309 1,495,278 34.11% 314,206 1,212,738 37.97% 198,322 41.25% 247,118 970,743 1992-93 2,343,875 984,045 1993-94 2,169,625 956,335 1994-95 2,367,250 1995-96 2,224,875 945,158 970,828 1996-97 2,371,500 987,573 1997-98 2,105,875 899,300 1998-99 1,999,625 847,705 1999-00 2,269,500 774,223 2000-01 a 1,955,000 742,263 Average Percent of US 2,073,085 852,929 1,220,157 79.76% 71.93% 86.33% 76.37% Total Texas 1978-79 160,000 360,000 200,000 44.44% 17,680 1979-80 316,000 1980-81 168,000 148,000 53.16% 26,237 186,000 82,000 69.40% 27,260 266,800 52.01% 38,173 99,450 58.80% 24,148 47,600 55.38% 9,385 - 0.00% - 93.55% 2,076 14,800 80.78% 15,122 268,000 1981-82 556,000 289,200 1982-83 241,400 1983-84 106,675 141,950 59,075 1984-85 - 1985-86 13,175 - 12,325 1986-87 77,000 850 62,200 1987-88 152,000 111,400 40,600 73.29% 25,754 1988-89 192,000 155,600 36,400 81.04% 25,107 1989-90 80,000 15,800 80.25% 14,162 - 0.00% - - 100.00% 983 19,120 74.51% 12,856 33,800 71.83% 15,238 64,200 1990-91 - - 1991-92 2,600 1992-93 2,600 75,000 55,880 1993-94 120,000 86,200 1994-95 186,000 128,040 57,960 68.84% 15,539 1995-96 182,000 120,880 61,120 66.42% 21,257 1996-97 212,000 148,720 63,280 70.15% 2,078 1997-98 192,000 139,760 52,240 72.79% 22,574 163,480 80,520 67.00% 35,307 1998-99 244,000 1999-00 154,880 82,320 65.30% 37,342 162,200 125,800 56.32% 19,324 178,307 111,852 66,455 63% 17,722 6.86% 9.43% 4.70% 237,200 2000-01 a 288,000 Average Percent of US 5.48% Total a. Preliminary data for the 2000-01 growing season SOURCE: September 2001 Fruit and Tree Nut Situation and Outlook Yearbook, ERS, USDA Since 1978, on the average, Texas as shipped 63% of its total grapefruit to the fresh market. However, Texas grapefruit remains a distant third, as its almost 7% share of U.S. production only generated over 5% of the U.S. total value. The California/Arizona average value of production was the highest at $171.76 per ton, Florida=s came in second at $119.20 per ton, and Texas= value of production is $99.39 per ton (calculated by dividing the average value of production by the average production for the 22 year period). ORANGES Annual production, utilization and value of U.S. oranges by production area for the growing seasons of 1978-79 to 2000-01 are presented in Table 2. Texas ranks as third in the production of oranges, averaging less than 1% of total U.S. production. Florida is ranked as 1st in total U.S. production with production levels exceeding 76% of the U.S. total. However, processing is the primary market utilizing Florida oranges. Roughly 6% of Florida oranges are utilized in the fresh market, while California/Arizona and Texas oranges exceed 65% fresh market utilization. Table 2: Annual production, utilization and value of US oranges by area for 1978-2001 Season Fresh Processed Production Utilization Utilization Percent Value (tons) (tons) (tons) Fresh ($1000) California/Arizona 1978-79 1,507,500 991,500 516,000 65.77% 994,990 1979-80 2,358,750 1,563,000 795,750 66.26% 1,068,408 1980-81 2,581,875 1,513,500 1,068,375 58.62% 1,045,600 1981-82 1,685,625 1,332,000 353,625 79.02% 387,020 1982-83 1,883,625 1,717,313 1,278,938 91.17% 335,257 1983-84 2,041,875 1,562,500 421,125 76.52% 411,869 1984-85 2,097,375 1,575,188 466,688 75.10% 525,271 1985-86 2,272,500 1,696,687 400,688 74.66% 378,920 1986-87 2,207,700 1,637,250 570,450 74.16% 450,859 1987-88 2,280,750 1,602,188 678,563 70.25% 473,109 1988-89 2,272,500 1,568,063 704,438 69.00% 477,006 1989-90 2,737,875 1,809,713 928,163 66.10% 568,719 1990-91 1,025,625 660,675 364,950 64.42% 404,031 1991-92 2,616,750 1,618,350 998,400 61.85% 450,400 1992-93 2,574,375 1,897,350 677,025 73.70% 481,529 1993-94 2,456,250 1,785,488 670,763 72.69% 475,130 1994-95 2,139,375 1,691,063 448,313 79.04% 480,408 1995-96 2,236,875 1,716,300 520,575 76.73% 498,102 1996-97 2,452,500 1,980,113 472,388 80.74% 593,552 1997-98 2,625,000 2,114,325 510,675 80.55% 619,955 1998-99 1,393,125 765,300 627,825 54.93% 424,077 1999-00 2,441,250 1,668,975 772,275 68.37% 350,962 2,246,250 1,902,375 343,875 84.69% 567,215 2,179,797 1,581,270 634,342 72.36% 541,843 22.31% 76.53% 8.20% 2000-01 a Average Percent of US Total 33.30% Florida 1978-79 7,380,000 526,545 6,835,455 7.13% 994,990 1979-80 9,301,500 494,550 8,806,950 5.32% 1,068,408 1980-81 7,758,000 372,420 7,385,580 4.80% 1,045,600 1981-82 5,661,000 342,900 5,318,100 6.06% 752,547 1982-83 6,282,000 464,400 5,817,600 7.39% 955,741 1983-84 5,251,500 343,800 4,907,700 6.55% 880,377 1984-85 4,675,500 299,340 4,376,160 6.40% 930,139 1985-86 5,364,000 403,200 4,960,800 7.52% 708,356 1986-87 5,386,500 399,150 4,987,350 7.41% 864,171 1987-88 6,210,000 428,400 5,781,600 6.90% 1,288,199 1988-89 6,597,000 381,960 6,215,040 5.79% 1,357,529 1989-90 4,959,000 266,490 4,692,510 5.37% 888,097 1990-91 6,822,000 560,295 6,261,705 8.21% 1,180,715 1991-92 6,291,000 519,840 5,771,160 8.26% 1,094,369 1992-93 8,397,000 482,580 7,914,420 5.75% 1,004,253 1993-94 7,848,000 445,410 7,402,590 5.68% 1,061,122 1994-95 9,247,500 469,845 8,777,655 5.08% 1,138,825 1995-96 9,148,500 448,605 8,699,895 4.90% 1,316,167 1996-97 10,179,000 481,320 9,697,680 4.73% 1,235,547 1997-98 10,980,000 495,450 10,484,550 4.51% 1,339,529 1998-99 8,370,000 488,700 7,881,300 5.84% 1,252,704 1999-00 10,485,000 422,685 10,062,315 4.03% 1,304,965 10,048,500 433,035 9,615,465 4.31% 1,063,496 7,506,196 433,518 7,071,895 6.00% 1,075,037 76.82% 20.98% 91.37% 2000-01 a Average Percent of US Total 66.06% Texas 1978-79 272,000 89250 182750 32.81% 26,970 1979-80 171,275 88400 82875 51.61% 19,791 1980-81 184,025 121125 62900 65.82% 20,363 1981-82 252,450 141100 111350 55.89% 28,228 1982-83 241,400 141950 99450 58.80% 26,402 1983-84 106,675 59075 47600 55.38% 11,492 0 0 0.00% - 1984-85 1985-86 13,175 12325 850 93.55% 3,168 1986-87 37,188 33,363 3,825 89.71% 7,469 1987-88 60,775 89.23% 54,230 6,545 12,373 1988-89 78,625 66,130 12,495 84.11% 13,932 1989-90 51,213 28,178 23,035 55.02% 8,256 - - 0.00% - 1990-91 1991-92 1,275 1,275 - 100.00% 431 1992-93 21,675 19,040 2,635 87.84% 4,156 1993-94 23,375 21,420 1,955 91.64% 5,044 1994-95 44,838 30,515 14,323 68.06% 4,828 1995-96 39,950 33,490 6,460 83.83% 7,310 1996-97 60,350 40,630 19,720 67.32% 7,563 1997-98 64,813 47,983 16,830 74.03% 5,874 1998-99 60,775 47,515 13,260 78.18% 11,147 1999-00 70,550 54,358 16,193 77.05% 10,173 94,988 54,018 40,970 56.87% 5,539 84,843 51,538 33,305 66% 10,457 0.87% 2.49% 0.43% 2000-01 a Average Percent of US Total a. Preliminary data 0.64% SOURCE: September 2001 Fruit and Tree Nut Situation and Outlook Yearbook, ERS, USDA The value of Texas oranges exceeded that of Texas grapefruit, however, the less than 1% level of total U.S. production represented just over half of 1% of total U.S. value. The average value of production of California/Arizona orange value was the highest at $248.57 per ton, Florida=s was second at $143.22 per ton, while Texas= came in third at $123.25 per ton (calculated by dividing average value by average production for the 22 year period). Texas grapefruit acreage over the past decade (since the 1989 freeze) is over 2.25 times that of the acreage for oranges. Grapefruit production per acre in the last ten growing seasons averaged 1.5 times that of oranges. Additionally, the overall average value of the grapefruit was 2.9 times higher than that of oranges ($18.3 million and $6.2 million, respectively). DEMAND A shift has occurred in the demand for citrus. In the past 22 years, the Amarket basket@ of consumers has changed to reflect the growing demand for convenience foods. In the U.S., the average from 1978/79 to 2000/01 processed market utilization of oranges was 79%, while the processed market during this same period utilized 54% of grapefruit. Past utilization trends provide the basis for examining changes in consumption patterns, which reflect the interaction of factors such as production, price, income, population, demand, consumer preference, and taste. Table 3 summarizes the trends in per capita consumption by product form. The consumption of fresh citrus declined steadily from 1950 to 1960, remained fairly consistent to 1976, and then continued to decline through 1990. This decline has been offset by a steady increase in per capita consumption of frozen concentrated orange juice, which increased from 21.9 pounds in 1970 to 29.2 pounds by 1990. Chilled juice consumption increased from 4.6 pounds per capita in 1970 to 6.3 pounds in 1990 (Taylor, Hall, Gustavo; Texas Citrus-Production, Utilization, and Demand, 1994). Table 3: U.S. per capita consumption by product form, 1970-1990 Year 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Fresh (lbs) 28.9 29.0 27.3 27.2 27.0 29.1 28.5 26.0 26.1 23.0 26.1 23.5 23.5 27.9 22.7 21.5 24.2 23.9 25.5 23.6 21.4 Canned Juice (lbs) 5.2 5.3 5.1 5.5 5.3 5.2 5.1 4.9 5.5 5.5 5.0 4.8 3.9 2.9 2.8 2.3 2.0 2.0 1.7 1.6 1.8 Frozen Juice Chilled Juice Total Citrus (lbs) (lbs) (lbs) 21.9 4.6 60.6 25.6 4.7 64.6 29.4 5.1 66.9 28.5 5.2 66.4 31.1 5.1 68.5 35.0 5.6 74.9 35.1 6.0 74.7 36.6 5.6 73.1 30.3 6.0 67.9 32.9 5.4 66.8 33.8 5.8 70.7 33.2 4.1 65.6 36.9 3.5 67.8 41.7 4.1 76.6 35.6 3.7 64.8 40.5 3.2 67.5 43.3 3.8 73.3 40.2 4.5 70.6 40.1 5.1 72.4 34.3 6.5 66.0 27.2 6.3 56.7 Sources: 1993 Fruit and Tree Nuts Situation and Outlook Yearbook, ERS, USDA 1991 Fruit and Tree Nuts Situation and Outlook Yearbook, ERS, USDA From 1970 until 1990, the data collection methods broke down the juice consumption by product form. However, in 1992, the USDA instituted new reporting procedures. Rather than reporting juice statistics by product form, consumption is now reported as gallons of single strength equivalent. This new method takes into consideration juices that were not previously estimated, as well as juice blends. In order to adjust for these changes, Table 4 and Table 5 provide information for the U.S. per capita consumption for processed and fresh market citrus fruit, respectively. Despite fluctuations in the consumption patterns of both fresh and processed fruit, there has been an overall trend of decreased per capita consumption of oranges, temples, and grapefruit. On the other hand, the overall consumption of fresh and processed tangerines and tangelos, lemons and limes have increased. Grapefruit has had the largest decreased consumption of 35% in the combined processed and fresh fruit markets from 24.36 pounds combined processed and fresh market per capita consumption in 1977/78 to 15.77 pounds combined processed and fresh market per capita consumption in 2000/01. Oranges have also seen a decreased per capita consumption level of 3.5% from 91.78 pounds in 1978/79 compared to 88.57 pounds in 2000/01 of combined processed and fresh market citrus. While U.S. per capita consumption has been decreasing, the export market growth has become extremely important. Table 4: U.S. per capita consumption of processed b citrus fruit, freshweight equivalent, 1977/78 to date Year a 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 Oranges & Tangerines Grapefruit Lemons Temples & tangelos in pounds 78.34 2.00 16.01 4.71 74.58 1.91 14.09 2.56 80.98 2.85 10.20 3.33 82.82 2.02 13.03 6.53 74.98 2.48 12.19 4.63 91.04 1.69 11.53 4.36 80.26 1.60 6.23 3.02 78.36 1.40 11.12 3.82 82.44 1.14 8.49 2.80 78.00 1.58 11.54 5.38 72.42 1.56 6.07 2.67 73.88 1.59 9.70 2.73 71.97 1.08 9.86 3.63 73.71 0.95 7.40 3.49 63.46 1.01 6.30 3.23 74.59 1.13 9.55 4.39 72.53 1.44 8.80 4.78 78.90 1.27 10.45 3.24 77.62 1.26 11.62 4.07 Limes Total 0.05 0.10 0.19 0.19 0.26 0.27 0.23 0.29 0.39 0.38 0.19 0.25 0.57 0.47 0.39 0.20 0.24 0.51 0.29 101.11 93.23 97.56 104.59 94.53 108.90 91.35 94.99 95.26 96.88 82.92 88.15 87.12 86.02 74.39 89.86 87.79 94.37 93.99 1996/97 1997/98 1998/99 1999/00 2000/01 c 71.65 82.59 78.34 79.47 75.59 2.04 1.51 1.23 1.61 1.57 10.17 9.11 9.69 10.13 10.94 4.26 3.40 3.09 4.00 5.40 0.50 0.23 0.22 0.49 0.54 88.62 96.84 92.57 95.71 94.03 a. Marketing years begin in November of the first year shown for fresh oranges, temples, tangerines, and tangelos; grapefruit in September; lemons in August; and limes in April b. Juice marketing years begin in December of the first year shown for oranges, Temples, tangerines, tangelos, and grapefruit; lemons in August, and limes in April. C. Preliminary SOURCE: September 2001 Fruit and Tree Nut Situation and Outlook Yearbook, USDA Table 5: U.S. per capita consumption of fresh market citrus fruit, freshweight equivalent, 1977/78 to date Year a 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 c Oranges & Tangerines Grapefruit Lemons Temples & tangelos in pounds 13.44 2.09 8.35 2.13 11.50 2.02 7.29 1.91 14.28 2.21 7.30 1.92 12.36 2.03 6.65 2.01 11.69 2.07 7.20 2.07 15.04 2.25 7.84 2.32 11.87 2.08 5.98 2.16 11.60 1.51 5.51 2.30 13.43 1.59 6.13 2.47 12.81 1.78 6.35 2.48 13.90 1.77 6.69 2.47 12.17 1.71 6.60 2.39 12.37 1.31 4.43 2.60 8.46 1.38 5.87 2.60 12.91 1.94 5.95 2.54 14.25 1.87 6.24 2.65 13.07 2.11 6.13 2.68 11.98 2.01 6.07 2.87 12.77 2.19 5.93 2.90 14.16 2.57 6.28 2.80 14.91 2.21 6.05 2.51 8.57 2.26 5.87 2.67 12.04 2.91 5.24 2.50 12.98 2.73 4.83 3.05 Limes Total 0.22 0.27 0.36 0.42 0.38 0.52 0.45 0.56 0.58 0.51 0.56 0.69 0.66 0.75 1.03 0.96 0.98 1.20 1.16 1.17 1.43 1.36 1.32 1.54 26.23 22.99 26.07 23.48 23.42 27.96 22.53 21.47 24.21 23.93 25.39 23.56 21.37 19.06 24.36 25.97 24.97 24.13 24.95 26.98 27.10 20.73 24.01 25.13 a. Marketing years begin in November of the first year shown for fresh oranges, temples, tangerines, and tangelos; grapefruit in September; lemons in August; and limes in April b. Juice marketing years begin in December of the first year shown for oranges, Temples, tangerines, tangelos, and grapefruit; lemons in August, and limes in April. c. Preliminary SOURCE: September 2001 Fruit and Tree Nut Situation and Outlook Yearbook, USDA The changes in consumption patterns can be traced to various socio-economic factors. These factors include rising incomes, changes in lifestyles, eating habits, and consumer tastes and preferences. As incomes rise and people feel they have less time for food preparation, the demand for convenience foods will continue to rise and the willingness to pay the value-added price will increase accordingly. Even though it can be assumed there will continue to be a slow decline in citrus consumption, the data found in tables 1 and 2 suggest there is a substantial amount of Texas citrus utilized in the fresh market. It is important for the sustainability of the Texas industry to continue to create brand recognition for Texas grapefruit and oranges through its TexasSweet promotions.