Marty McKenna on what the Florida Citrus industry needs now
A version of these remarks was delivered during the Florida Citrus Commission meeting held at the Florida Citrus Mutual Annual Conference on June 17, 2015.
As my term as Chairman of the Florida Department of Citrus winds down, I would like to take what may be my last opportunity to address those gathered here at the Florida Citrus Mutual Annual Conference.
First of all, thank you for allowing me to serve. And a big thank you to Mike Sparks and his entire staff for all the effort and hard work that goes into making this a great annual event. The first FCM conference pre-dates Mike Sparks’ leadership and I want to thank him for nurturing and continuing to grow this event each year.
As you all know, the industry is being challenged. Citrus greening continues to wage war on our crops. As growers, we are expected to continue to produce the high-yielding, high-quality oranges we are historically known for – juice oranges that set the world standard for our industry. At the same time, low production and high care costs have driven fruit price up. Brands are trying to source quality fruit at competitive prices. Imports are rising. Retail prices are increasing and consumption is falling.
Clearly, something needs to change.
But, as we make decisions on the future of this great industry, let’s take a minute to look back at where we came from. Eighty years ago, the pioneers of our industry had the ingenuity and foresight to establish the Florida Department of Citrus, thus creating a market for 100% Florida Orange Juice. Backed by the finances of Florida Growers, the Department successfully helped position orange juice as America’s favorite 100 percent juice.
While the Department has served as a promotional arm of the industry, FCM has a vast history of helping the Florida Citrus grower succeed in business, regulatory trade and the political arena. Actions of legendary leaders from the past are why we are able to convene for this conference today.
As most of you know, Matt McGrath was a huge component in many of FCM’s successful trade battles. His association with FCM goes back to the Bobby McKown days. If my memory serves correct, FCM has prevailed three times in anti-dumping cases representing Florida Citrus growers against importers of foreign orange juice. To be successful in a dumping case, it had to be shown that unfair trade practices caused harm to Florida Citrus Growers. Mutual prevailed, and the Florida grower benefited greatly.
I would also like to acknowledge FCM’s relationship with the lobbying firm Akin Gump, which began as our citrus industry saw a need to step up our presence in Washington to protect the tariff on imported OJ. They have been a very integral part of FCM’s successful Washington, D.C. lobbying efforts, and we in the industry appreciate their support.
As these examples illustrate, we have been entrusted with a great legacy and given the tools by past leaders to make this a great industry. We have an obligation to the future generations of Florida Citrus growers to stay strong going forward. In November 2014, I was invited to meet with Andy Taylor, of the Peace River Processors Association, as well as Fran Becker, Mike Sparks and Larry Black, of Florida Citrus Mutual. They requested that I consider appointing a committee to study a Federal Marketing Order for Florida Citrus. Since then, I have put a lot of thought into this concept, and, as requested, the FDOC began studying the Federal marketing concept in January. Unfortunately, I have more questions than answers. As orange juice sales continue to decline, the question seems to be whether marketing generic OJ – with the potential $21 million a marketing order could bring in – would benefit Florida growers. In a recent presentation to the FDOC, University of Florida economist Ron Ward defined generic advertising as “cooperation among a group of producers of a homogeneous product for the purpose of disseminating information to enhance the demand of the commodity.”
This begs the following questions: Are Florida growers producers of a homogeneous product? Does the Florida grower want to take steps to ensure that they will be a producer of a worldwide commodity?
In a commodity market, production of a product becomes concentrated only in areas that have low cost of production. If our actions lead to Florida Growers simply being a commodity producer – have we served future growers and the Florida industry well?
Or, do we want to retain the position of Florida Orange Juice as the gold standard among the growing portfolio of fruit juices available to the consumer? If so, can we maintain our quality in the face of HLB and differentiate our product?
If Florida retains ownership of its origin and is successful in differentiating, we can pass the ability to receive higher-than-commodity prices for our oranges to the next generation.
It is possible.
Through the dedication and vision of our plant breeders, 30 years of work is coming to fruition. We will soon be replacing our sick trees with superior cultivars. These cultivars will allow for traditional Valencia-quality juice from November to June. Effective product differentiation must be available to future Florida growers to allow them to be compensated for the high quality.
Can we expect increased-quality, better-tasting juice to translate into increased consumption?
Yes – but only if we look at our current situation as a way to rebuild our industry with the best cultivars and a goal to produce the best NFC juice products in the world.
In the time it takes to implement a generic commodity orange juice federal program we can have thousands of new cultivars growing.
The citrus cultivar improvement team at the University of Florida’s Institute of Food and Agriculture Sciences has worked diligently with their stated goal. The Citrus Research and Education Center’s sweet orange improvement program has developed a set of cultivars that can be used in a progressive harvesting scheme to provide high-yielding Valencia-quality oranges form November to June to allow our industry to efficiently produce the absolute best NFC juice. Dr. Jude Grosser is excited to report that budwood will be available to nurseries for propagation this fall.
I, like most in this room, believe we will whip HLB.
I believe we will do so through the use of rootstock and cultivars.
Now, let us ask ourselves: Do we want to race towards a federal marketing order that would ensure the commodification of orange juice where the low-cost producer will survive?
Or should we race toward rebuilding our industry with new cultivars developed here in Florida that would solidify Florida as the premier orange juice grower in the world?