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An Analysis of the Potential Economic Impact of Huanglongbing On AN ANALYSIS OF THE POTENTIAL ECONOMIC IMPACT OF HUANGLONGBING ON THE CALIFORNIA CITRUS INDUSTRY A Thesis by SAMANTHA DURBOROW Submitted to the Office of Graduate Studies and Research of Texas A&M University-Commerce In partial fulfillment of the requirements for the degree of MASTER OF SCIENCE August 2012 AN ANALYSIS OF THE POTENTIAL ECONOMIC IMPACT OF HUANGLONGBING ON THE CALIFORNIA CITRUS INDUSTRY A Thesis by SAMANTHA DURBOROW Approved by: Advisor: Jose Lopez Committee: Jose Lopez Jim Heitholt Robert Williams Head of Department: Jim Heitholt Dean of the College: Grady Blount Dean of Graduate Studies and Research: Allan Headley iii ABSTRACT AN ANALYSIS OF THE POTENTIAL ECONOMIC IMPACT OF HUANGLONGBING ON THE CALIFORNIA CITRUS INDUSTRY Samantha Durborow, MS Texas A&M University-Commerce, 2012 Advisor: Jose Lopez, PhD The disease Huanglongbing (HLB), also known as Citrus Greening, was first discovered in the United States in 2005, in a Florida commercial citrus grove. HLB is a phloem limiting bacterium that reduces the life span of affected citrus orchards. Since its discovery in Florida in 2005, HLB has not only decreased citrus production, but has drastically increased production costs. With California contributing over 80% of the nation’s fresh oranges, it is important to attempt to keep HLB from being introduced to the state. Quantifying the potential economic impact of HLB under different management approaches is essential in developing the most appropriate mitigation actions to take if HLB is discovered in California. The total avoidable damages by keeping HLB out of California over a 20 year period is simulated under two different scenarios. If HLB is allowed to spread throughout the state without any attempts to limit its spread (i.e., a do-nothing or pessimistic scenario) for a period of iv 20 years, today’s total loss in production value, on average is estimated to be $2.7 billion. However, if California orange growers take aggressive actions attempting to limit the spread of HLB (i.e., an optimistic scenario), today’s total damages over the 20-year period considered are on average estimated to be $2.2 billion. v ACKNOWLEDGEMENTS I would like to thank my advisor Dr. Lopez for his assistance throughout the entire process of completing this thesis. His directions and support encouraged me to keep at it and complete this study. Having someone to bounce ideas off of and gain insight to make my research stronger has been a rewarding experience. I would also like to thank Dr. Heitholt and Dr. Williams for being a part of my committee and for their feedback while completing this project. In addition, I would like to express my sincere appreciation to Dr. Williams. He will never fully understand how he has impacted my life by being instrumental in my pursuing an M.S. degree at Texas A&M University-Commerce. Finally, it would not be right to go without expressing my deepest gratitude to Guy Eubank for his support and encouragement. Without his belief in me I would not have made the decision to relocate to Texas and complete my M.S. degree. Although he is no longer walking this earth and is not able to rejoice in this achievement with me, I know he would be proud. vi TABLE OF CONTENTS LIST OF TABLES ..................................................................................................................... ix LIST OF FIGURES ................................................................................................................... xi CHAPTER 1. INTRODUCTION ..................................................................................................... 1 Huanglongbing ................................................................................................... 1 World Citrus Production and Huanglongbing ................................................... 6 U.S. Citrus Production ....................................................................................... 7 Florida’s Citrus Industry .................................................................................... 8 California’s Citrus Industry ............................................................................... 10 Objectives .......................................................................................................... 20 Specific Objectives ............................................................................................ 21 2. LITERATURE REVIEW .......................................................................................... 22 Asian Citrus Psyllid ........................................................................................... 22 Economic Impact of Invasive Species and Plant Pathogens .............................. 23 Pest and Pathogen Dispersion ............................................................................ 30 Management Practices ....................................................................................... 33 3. METHODS AND PROCEDURES ............................................................................ 38 The Pessimistic Approach .................................................................................. 38 HLB Severity in Individual Trees .......................................................... 39 HLB Spread Through a Grove of Trees ................................................. 41 HLB Implications on Orange Yields ..................................................... 44 HLB Impact on California Orange Yields Over Time ........................... 47 vii Simulation .............................................................................................. 49 The Optimistic Approach ................................................................................... 58 Total Damages ....................................................................................... 58 Scouting ..................................................................................... 63 ACP Control ............................................................................... 64 Tree Removal and Tree Replacement ........................................ 66 Yield Reduction ..................................................................................... 67 Simulation .............................................................................................. 69 Data .................................................................................................................... 72 4. RESULTS AND DISCUSSION ................................................................................ 74 Pessimistic Approach Results ............................................................................ 74 Healthy Orange Yields ........................................................................... 78 Relative Orange Yield ............................................................................ 80 HLB Orange Yields ............................................................................... 83 Fresh and Processed Orange Prices ....................................................... 85 Net Present Value of the Loss in Production ......................................... 87 Optimistic Approach Results ............................................................................. 87 Healthy Orange Yields ........................................................................... 90 HLB Spread Rate ................................................................................... 92 HLB Orange Yields ............................................................................... 94 Incurred Costs of Controlling ACP ........................................................ 96 Net Present Value of Total Damages ..................................................... 97 Comparison of the Pessimistic and Optimistic Approach ................................. 98 viii Discussion of Results Compared to Similar Studies .......................................... 101 5. CONCLUSION AND IMPLICATIONS ................................................................... 105 Limitations ......................................................................................................... 108 Suggestions for Future Research ....................................................................... 110 REFERENCES .......................................................................................................................... 112 APPENDIX ................................................................................................................................ 125 A: Distributions .............................................................................................................. 126 PERT Distribution ............................................................................................. 127 Uniform Distribution ......................................................................................... 129 Normal Distribution ........................................................................................... 130 VITA .......................................................................................................................................... 131 ix LIST OF TABLES TABLE 1.1 ACP and HLB Detections and Quarantine Information for the United States ............. 4 2.1 Summary of Available Options to Manage HLB ......................................................... 36 3.1 Parameters Related to the Age of Trees and HLB Severity .......................................... 41 3.2 Biological Parameters Included in the Pessimistic
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