Texas Citrus Tree Valuesjuan R

EHT-011 7/13 Texas Citrus Tree ValuesJuan R. Anciso and Luis A. Ribera* Photo courtesy of Rod Santa Ana ommercial citrus growers and homeowners To figure the total value per tree for years 2 to often need to determine the value of their 6, add the value of a tree the previous year plus mature citrus trees. The objective is to deter- the potential gross revenue the new tree is bring- mine the value of a mature grapefruit tree (Rio ing. RedC variety) and a mature orange tree (Valencia Finally, calculate the total value of mature variety) to assess the value of a tree or an orchard. trees (7 years and older) by adding the cumula- Grapefruit and orange trees usually reach full tive potential net revenue of a mature tree over 7 maturity by year 7 with an estimated yield of 23 years, plus the planting cost minus the cumulative and 18 tons per acre, respectively (Table 1.) How- potential net revenue of a new tree, years 1 to 6. ever, some production is expected from year 2 Overall, citrus tree values vary from year 1 with yearly increments until they reach maturity. through 7. At year 7, citrus trees are fully mature The price per ton used in this study is the due to their commercial production potential. Of 5-year average (2008–2012) producers received course, the longevity or lifespan of a citrus tree for either grapefruit or Valencia oranges. The cost depends on its care and whether it endures any of production is separated into planting costs or type of cold injury and rehabilitation, but the esti- establishment costs and annual production cost. mated mature life span for citrus is 31 to 35 years. Establishment cost is higher for oranges because Then, productivity declines due to various factors there are more trees per acre, 189 trees compared even though citrus trees have been known to live to 140 trees per acre for grapefruit. well beyond 60 years. Therefore, mature grape- Calculate the total value per tree for year 1 by fruit trees have a tree value of $57.41 from year 7 dividing the planting cost per acre by the number through year 35, while Valencia orange trees have of trees per acre. For grapefruit, divide the $2,000 a tree value of $52.70 from year 7 through year planting cost by 140 trees per acre for a value of 31. These values are based on current fruit val- $14.29 per tree. ues and will change due to changes in prices and production costs, but this estimate gives growers Associate Professor and Extension Vegetable Specialist, and homeowners a reference value for their citrus and Associate Professor and Extension Economist trees. Table 1. Calculations to determine the value of a mature grapefruit and orange tree Grapefruit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Yield (tons/ac) 0.0 0.2 2.5 5.0 10.0 15.0 23.0 Price ($/ton) (5-year average) $150.72 Number of Plants per Acre 140 Planting Cost ($/ac) $2,000.00 Cost of Production ($/ac) $1,900.00 Total Value ($/plant) $14.29 $14.50 $17.19 $22.58 $33.34 $49.49 $57.41 Valencias Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Yield (tons/ac) 0.0 0.2 2.0 3.9 7.8 12.7 18.0 Price ($/ton) (5-year average) $192.67 Number of Plants per Acre 189 Planting Cost ($/ac) $2,700.00 Cost of Production ($/ac) $1,700.00 Total Value ($/plant) $14.29 $14.45 $16.44 $20.43 $28.41 $41.35 $52.70 Historic Freezes: Catalysts for Better Production Practices Two devastating freezes in Texas in the ’80s season was virtually zero. In the following (December 1983 and December 1989) affect- 3 years, production on rehabilitated trees ed the size of the citrus industry in the Rio reached about 2 to 3, 18 to 20, and 35 to 40 Grande Valley and led to growers developing percent of prefreeze levels, respectively. more efficient management practices. Before In the 1989 freeze, about 67 percent of the the 1989 freeze, the citrus industry was tied citrus trees died, reducing citrus tree acre- to large investments in groves that did not age from approximately 36,000 to 12,000 provide returns comparable to alternative ag- acres. Production in 1990 was zero as the ricultural investments. The industry recovered industry again began rehabilitating surviving by vigorously reestablishing productive land trees (many of which were survivors of the with newer, more marketable varieties, more ’83 freeze). The freeze damaged or destroyed sophisticated production and management much of the nursery stock, slowing the rees- systems, and better ownership arrangements, tablishment of highly productive fields. which increased the profit potential of the Growers predominantly chose the newer, land. redder grapefruit varieties such as the Rio Red In the 1983 freeze, about 70 percent of the for replanting. Orange varieties were mixed, citrus trees died, reducing citrus tree acreage with Valencia more widely grown. Production from approximately 69,000 to 22,000 acres. in the citrus trees planted after the 1989 freeze Trees that remained alive required extensive continues to increase, with accompanying rehabilitation. Production in the 1984–85 increases in production costs and returns. Texas A&M AgriLife Extension Service AgriLifeExtension.tamu.edu More Extension publications can be found at AgriLifeBookstore.org Educational programs of the Texas A&M AgriLife Extension Service are open to all people without regard to race, color, sex, religion, national origin, age, disability, genetic information, or veteran status. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating. New.

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