Texas Citrus Mutual
Texas Citrus Mutual, a non-profit trade association representing Texas citrus growers, was founded 50 years ago to work with and represent the interest of those growers as well as the statewide citrus industry.
Initially, the organization responded to the demands of growers, with its efforts focused on marketing, which didn’t previously exist at any measurable level. The group’s work produced tangible results.
Texas Citrus Mutual continues to market the industry on behalf of its members, but production issues are now competing for the time and attention of its leaders.
The Texas citrus industry is concentrated in the lower Rio Grande Valley of Texas, with about 400 growers located in that area. The majority of land devoted to citrus production in the three-county region is owned and managed by growers who also live on their land, and most of the larger citrus growers are members of Texas Citrus Mutual.
Since its inception, Texas Citrus Mutual has addressed the needs of growers as certain issues arise. In its early years, much of its work was focused on marketing issues.
Today, TexaSweet functions as the marketing arm of the Texas citrus industry, and Texas Citrus Mutual works cooperatively with that organization on several projects. One of those projects involved an investment in a promotion related to choice grade citrus produce, stemming from a decline in demand for the choice grade citrus from retailers.
At the same time, Texas Citrus Mutual was working through the Texas Citrus Growers League, a legal entity that could address pricing issues without violating antitrust laws.
“We know we had an impact on the price and the movement of choice fruit for two or three years when we were doing that,” said Ray Prewett, president of Texas Citrus Mutual since 2003. “There’s been a little talk about trying to do something like that again, but we haven’t got that going at this point.”
Fresh vs. Choice
Citrus growers aim to sell as much of their crop as possible as fresh produce. But over the course of the growing season, Prewett said only 60 to 65 percent of the entire harvest is distributed as fresh produce, with the remainder being processed into juice.
When it comes to fresh produce, Prewett said Texas growers aren’t necessarily competing with Florida growers for market share, but rather are competing with other products for shelf space at the grocery store.
Retailers have given high priority to Texas’ fancy fresh produce, the industry’s top grade of fresh citrus produce. “So consequently, we do pretty well on the price on that,” Prewett said.
But the second grade, referred to as choice, hasn’t fared as well. Retailers aren’t as interested in it and have put a preference on stocking other types of produce. They occasionally run some promotions with choice citrus, but won’t pay a high price for it.
“Consequently, the price that we get for choice is kind of break-even,” Prewett said.
Juice, Prewett said, has presented growers with an even greater challenge.
The Texas citrus industry is concentrated within the Rio Grande Valley in Texas’ southernmost tip. A single juice production plant operates within the three-county area, and a large percentage of its product is sold in bulk overseas at a premium price.
The industry has fewer acres in production than in the past. Two juice plants were in operation with two well-established brand names. But Prewett said they were competing against each other and eventually recognized the need to merge. Both brands are now sold by the Texas Citrus Exchange Juice Processing Plant in Mission, the only remaining processing facility in the valley.
“It’s still a big struggle for them,” he said.
Texas is at an obvious competitive disadvantage when compared to Florida’s juice operation. In that state, 95 percent of its oranges go into juice production. At times, a groves entire harvest will be processed into juice.
“The Tropicanas of the world have the marketing resources to really get their production out there,” Prewett noted. “It’s tough competition for a smaller, independent operation.”
All Texas-grown citrus is processed and sorted, and the produce that does not make the fresh grade is sent to the juice plant. By the time the fruit is sorted, “we’ve already got a lot invested in it,” he said. He called it a losing proposition, one that has guided Texas Citrus Mutual’s interest in value-added agriculture.
Much of the market for Texas-made citrus juices comes through the federal Women, Infants and Children food program. But new federal guidelines will restrict how much juice will go into WIC food packages.
“So they’re facing a decision there about what they’re going to do to fill that void,” Prewett said.
In more recent years, Prewett said Texas Citrus Mutual has continued to work on marketing issues on behalf of its members. But more of its focus has been directed on issues related to production, with the organization spearheading noteworthy efforts to combat some of these problems as they’ve arisen.
The organization helped to launch a first-in-the-nation tree insurance program. Parts of Texas were hit by freezes in 1983 and 1989, and Prewett said the insurance program was credited with the industry’s recovery.
“That has to stand out as maybe the biggest single thing,” he said.
Furthermore, Texas Citrus Mutual has funded the Texas Citrus Producers Board, which has invested more than $500,000 into a citrus redwood program aimed at combating disease. The board succeeded in getting legislation passed at the Texas statehouse to help fund the program.
Texas citrus growers, like other agriculture producers, are in a constant battle with a variety of pests, such as the Mexican fruit fly and the citrus rust mite. Texas Citrus Mutual remains vigilant as the threat posed by some of these pests persists.
Growers have watched with some degree of anxiety as citrus greening, also known as huanglongbing, has hit the Florida citrus industry, resulting in significant losses for that state’s growers. Texas has the vector for the disease, but not the disease itself. But that isn’t enough to ease their fears.
“It is absolutely decimating the Florida citrus industry and has the potential to do the same here,” said Prewett. Citrus greening, he added, is far and away the most significant challenge facing the association today.
Texas Citrus Mutual worked cooperatively with Texas A&M University on an application for a USDA Value Added Producer Grant, with the grant funding research within the school’s agriculture economics and horticulture departments.
Much of the processing of preserved citrus is done in Mexico and other areas where labor costs are less than in the United States. There has been a great deal of time and effort put in over the years toward finding a way to mechanically process fresh citrus fruit in a way that would save on labor costs and make it economically viable to process produce in the United States.
But that has led to questions related to packaging and shelf life, which the university’s researches have attempted to address.
“What we’re looking to do is to try to still find a way where we can move this project forward to where we can show the practicality (to co-op growers) and the economics of it,” Prewett said. “We’re trying to be the catalyst for change here, but before we can make change happen, we have to have some kind of operating entity or we’ve got to create a new one. We haven’t quite gotten there yet.”
About USDA VAPG
VAPG funding has been offered by the USDA periodically since the early 2000s. A new round of funding is anticipated to be announced in the coming months. To be considered value added, projects must show how products are differentiated in specific ways from commodity crops. Typically, projects must also show how they may deliver greater returns to producers.
Independent producers, farmer or rancher cooperatives, agricultural producer groups, and producer-owned business ventures, including non-profit organizations, may apply. In previous cycles, applicants were required to be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value-added product. Grants have been available for planning projects (such as marketing and business plans and feasibility studies) and working capital projects (which might include wages or packaging supplies). (http://www.rd.usda.gov/)