The COVID pandemic continues to have rippling effects worldwide. For the California citrus industry, COVID and now a devastating drought, have resulted in staggering increases in farming and production costs for growers and minimal price correction in the market.
An internal industry survey of California citrus growers conducted by California Citrus Mutual (CCM) found that, on average, farming costs for the 2020-21 season increased by nearly $1,000 per acre. This represents a 19% increase since the start of the pandemic.
The two largest cost drivers are water and shipping. The spot market for surface water has increased 400% and in many cases is not available at all. Shipping costs are up as much as 380%, since the start of the pandemic due to the limited supply of containers and delays at ports around the world.
While water and shipping costs are up significantly, all farming costs have increased over the past 18 months. Fertilizer costs are up 49% and diesel fuel costs are up 38%, leading to additional costs throughout the supply chain.
“As the cost of growing and delivering high-quality California citrus increases, so must the prices consumers pay at the grocery store,” said Casey Creamer, President/CEO of California Citrus Mutual. “Growers simply cannot absorb these increases and stay in business. Now more than ever, growers, retailers, and consumers must work together to maintain cost controls and support policies that keep fresh and healthy food like California citrus plentiful and affordable.”