Corny Australian citrus industriesdata.daff.gov.au/.../rr92.14_us_aust_citrus.pdfFore word The citrus industry is one of the largest horticultural industries in Australia. As for many

Corny etitiveness of the US and Australian citrus industries

Wendy Proctor, Brian Phillips, James Kelly and Roger Van Hilst

ABARE RESEARCH REPORT 92.14

O Commonwealth of Australia 1992

This work is copyright. The Copyright Act 1968 permits fair dealing for study, research, news reporting, criticism or review. Selected passages, tables or diagrams may be reproduced for such purposes provided acknowledgment of the source is included. Major extracts or the entire document may not be reproduced by any process without the written permission of the Executive Director, ABARE.

ISSN 1037-8286 ISBN 0 642 18331 7

Australian Bureau of Agricultural and Resource Economics GPO Box 1563 Canberra 2601

Telephone (06) 272 2000 Facsimile (06) 272 2001

ABARE is a professionally independent research organisation attached to the Department of Primary Industries and Energy.

ABARE project 8229.102

Fore word

The citrus industry is one of the largest horticultural industries in Australia. As for many other horticultural industries, there are growing pressures on citrus growers in Australia to market increasing amounts of production in overseas markets in order to maintain or increase returns. In this analysis, ABARE follows a case study approach and compares the Australian citrus industry with its US counterpart in order to gain some insights into the ways in which Australia's competitiveness may be improved on world horticultural markets.

This study formed the basis of ABARE's submission earlier this month to the Industry Commission inquiry into horticulture. ABARE's submission essentially addressed the Commission's second term of reference, which was to '. . . examine the production and cost structure of the Australian horticultural industry, assess the methods used by selected other countries to support their horticultural exports and identify structural and other issues which, in comparison with overseas producers, affect the competitiveness of Australian producers in overseas markets'.

BRIAN HSHER Executive Director, ABARE

August 1992

1 iii

Contents

Summary

1 Background Impediments to horticultural efficiency Australian and world horticultural trade

2 The Australian citrus industry Production Distribution The Queensland citrus industry Marketing Factors affecting competitiveness Research and promotion

3 The US citrus industry Production Marketing Factors affecting competitiveness

4 Differences between the Australian and US citrus industries and policy implications

Cost of citrus production Juice yield and the production of frozen concentrated

orange juice Size and structure Government regulations, research and development and

promotion Applicability of citrus findings to other horticultural

industries

References

Figures

Australian gross value of horticultural production Brazilian supply and disposal of orange juice Citrus growing areas of Australia Distribution of citrus production, by state, 1989-90 Average farm cash income of citrus farms by region,

1990-91 Utilisation of the Australian citrus crop Citrus growing areas of the United States Orange yield per bearing hectare

Tables 1 World citrus production and fresh citrus exports 2 World apple production and exports 3 World canned deciduous fruit production and exports 4 World orange juice production and exports 5 World raisin production and exports 6 Value of Australian fruit exports 7 US citrus production, utilisation and value 8 Oranges processed, Florida 9 Government program allocations to citrus 10 Citrus receipts and costs in Australia, California and

Florida in 1988-89 11 Costs of citrus production in Australia

Summary

Australia's horticultural producers are now being A case study placed under increasing pressure to find alternative approach of US outlets for their rising production. Some countries and Australian overseas appear to have been very successful in citrus industries establishing export oriented horticultural industries. A case study approach of the Australian and US citrus industries is used in this study to determine which factors affect the competitiveness of horticultural producers on world markets.

The Australian citrus industry Citrus is the major fruit produced and traded in the Citrus is world. In Australia, the citrus industry is the third Australia's third largest fruit industry after grapes and bananas in largest terms of gross value of production. For citrus and horticultural just about all other horticultural products, Australian industry production and exports are small by world standards.

Fruit production in Australia is largely oriented to . . . oriented the domestic market and, despite the growth in mainly to the world trade, the quantity of Australian fruit exported domestic market has remained fairly constant over recent years. Competition is likely to intensify over the medium term from other southern hemisphere fruit producing countries, in particular, Chile and Brazil.

In Australia, citrus fruit is grown mainly in the Over half the 1 irrigated regions along the Murray and citrus produced

Murrumbidgee Rivers as well as in the Central is processed Burnett region of Queensland. On average, over the past five years, 56 per cent of citrus production has been processed, 37 per cent sold fresh to the domestic market, and 7 per cent exported as fresh fruit. Most . . . over a third is citrus farms are mixed fruit growing operations and sold fresh

1 ~ompetidiveness of citrus industries 1

. . . while only 7 per cent is exported

South Australia is the main fresh fruit exporter

Queensland citrus farms are the biggest

Spending on promotion and R&D

Most US production is processed

. . . dominated by large firms

relatively small. Some growers supply fruit direct to processors while others deliver their fruit to packing houses, where it is graded, packed and forwarded to processors. There are around fifteen major processors in Australia. Fruit of suitable quality can be sold on the fresh domestic and export markets for fresh fruit. There are around 150 licensed packers operating within the Australian citrus industry at present.

South Australia is the main fresh fruit exporting state. In 1990-91 there were 60 cooperatives and private companies in Australia that were licensed to export fresh citrus.

The citrus industry in Queensland differs significantly from the rest of the Australian industry. Much higher farm cash incomes are achieved in Queensland. This can be attributed to larger farm sizes, higher yields, higher valued crops and more profitable target markets.

Citrus promotion and research and development in Australia are funded by both government and industry contributions. In 1990-91, about 0.28 per cent ($570 000) of the gross value of citrus production was spent on promotion and 0.29 per cent ($600 000) on research and development.

The US citrus industry Most citrus production in the United States is processed. Florida is the main processing state, while California, Arizona and Texas direct most of their production to fresh fruit markets. The processing sector in the United States is dominated by large grower controlled cooperatives, large vertically integrated family operations or large subsidiaries of national food conglomerates. Similarly, the fresh fruit markets are dominated by a few large cooperative handlers and marketers.

2 M A R E research report 92.14

The main forms of government assistance accorded US spending on the US citrus industry include government and promotion and industry funded market programs (for promotion incentive programs and export) and marketing orders. Under the market program category, almost US$20 million a year of government and industry funds are allocated to citrus promotion and export incentive programs.

Marketing orders allow citrus production to be US marketing controlled and therefore prices supported. Under orders support these orders there are also powers to allow production and intraseasonal regulation, quality control, container prices regulations, research and development, and promotion. For Florida alone in 1989-90, over US$65 million (funded by taxes on domestic and imported citrus production) were spent under the marketing order category for citrus and US$3.9 million on research (including US$1.1 million for market research, US$0.4 million for economic research and US$2.4 million for scientific research).

Comparisons between the Australian and US citrus industries One of the most significant differences between the Juice yields are industries in the two countries is the juice yield that lower in Australia can be extracted from a given quantity of fruit. The processing sector in Florida appears to be able to do this much more efficiently than its Australian counterpart. It is estimated that in Australia it may take between 25 and 40 per cent more fresh oranges to produce the same amount of orange juice concentrate as in the United States. And the Australian citrus industry is largely dependent on the processing sector as the basis of its total returns.

1 One possible reason for the difference in juice Poor access to new yields in the two countries is the limited access of varieties may be horticultural' producers in Australia to new varieties the cause of lower because of a former quarantine ban on imported yields in Australia

Competitiveness of citrus industries 3

Australian processing costs are higher

US industry may have better economies of size

US budget for promotion and research is greater than Australia's

budwood. Although this ban was lifted in 1986, problems still exist with lags in the time taken to introduce new varieties to Australia. In competing with overseas countries for superior varieties, such strict quarantine regulations and lack of resources for trialing new varieties could impede the development of viable alternative sectors of the Australian industry (for example, fresh exports).

When competing with the Florida processed citrus industry, Australia is immediately placed at a disadvantage because of its higher production costs per tonne of juice concentrate. The Australian industry has been supported by tariff arrangements on imported juice as well as by local content concessions under fruit juice sales tax provisions. This suggests that, as tariff levels are gradually reduced in Australia, the citrus industry may be placed in a position which encourages efforts to reduce its reliance on the concentrate sector and to introduce higher yielding and thus more competitive varieties better suited to Australian conditions.

Comparing farm level survey data for the Florida, Californian and Australian citrus industries implies some important findings on potential economies of size to be captured in the citrus industry. There is no conclusive evidence to suggest that the US citrus industry is advantaged by economies of size at the farm level. Beyond the farm gate, however, there may be size advantages in the US industry in the latter stages of the production process (processing, converting, packing and distribution). However, with data not available on cost structures of such firms in the United States and Australia, it is not possible to draw firm conclusions.

Both the Australian and US governments offer similar forms of assistance to market promotion, research and quality control for citrus industries. In the United States, however, the budget for promotion

ABARE research report 92.14

and research is a bigger percentage of the gross value of production.

Other differences include the specific targeting of export markets in promotion and the brand specific nature of promotion in the US major export markets. However, further research is required to determine whether these options would be effective for the Australian industry.

Marketing orders in place in the United States allow the citrus industry to support domestic prices by exercising quantity controls. A US study found that the benefits to producers from such arrangements were outweighed by the costs to consumers. Implementing such an option would not be in the best interests of Australia overall because of the associated distortions to resource use.

Implications for other horticultural industries From ABARE's analysis the following conclusions are drawn and can be applied to other horticultural industries.

There now exists an increasing need for research into new varieties. In particular, objective benefit- cost analyses of a more rapid introduction of new plant materials from both overseas and Australia are required.

Research should be carried out on the relative effectiveness of different methods of promotion of horticultural products.

Increased funding for promotion and research and development should be encouraged for some of the Australian horticultural industries. Benefit- cost analyses should be used as the basis for allocating scarce funds between different forms of promotion and research and development.

Product and market targeting may be better in the US

Marketing orders are a distortion

and are not recommended for Australia

New varieties to be assessed

Promotion research to be encouraged

Funding for promotion and

R&D to be encouraged


Background

Impediments to horticultural efficiency ABARE has previously addressed many of the issues associated with institutional and regulatory factors impeding the development of efficiency in Australian horticultural industries.

In its submission to an Industries Assistance Commission inquiry into the fresh fruit and fruit products industries, ABARE (1987) addressed the following issues:

institutional influences on resource movements, including plant variety rights, water rights, land zoning and managed pollination;

international transport policy including air freight policy, liner shipping policy and onshore impediments to shipping efficiency; and

grades and standards.

In Proctor et al. (1992), Future Directions for Horticulture, the following impediments to adjustment were reviewed and discussed:

the perennial nature of most fruit crops and the associated production response lags;

the effects of protective arrangements such as tariffs, price pooling and underwriting on adjustment and efficiency; and

the implications of institutional arrangements such as water quotas and restrictions on farm size and transferability of water rights.

A review of current assistance measures was also provided for many of the horticultural industries.

Institutional and regulatory issues specific to individual industries have also been covered in BAEIABARE submissions to the Industries Assistance Commission, including BAE (1985), Vegetable Growing and Processing Industries, BAE (1986a), Citrus Fruit Growing Industry, BAE (1986b), Deciduous Canning Fruit Industry, ABARE (1988), The Dried Vine Fruit

6 ABARE research report 92.14

Industry, and ABARE (1989), Export Underwriting in the Apple and Pear Industries. In addition, Simmons, Poulter and Hall (1991) have specifically addressed the efficiency problems associated with current water regulations in the Murray-Darling Basin.

Because of the coverage already given by ABARE to these institutional and regulatory factors and because many of these issues have remained unchanged, they will not be addressed here. A review of the progress that has been made on some of these issues is provided in Proctor et al. (1992).

Australian and world horticultural trade World production of fruits is dominated by citrus (20 per cent of total fruit production), grapes (17 per cent), bananas (13 per cent) and apples (13 per cent). World trade in fresh fruit is small compared with the volumes of production. Fresh citrus is the major fruit traded (in value terms), followed by bananas, apples and fresh grapes. Of the processed fruit, wine, citrus juice and apple juice are the most important commodities produced and traded throughout the world (Rabobank 1990).

The major fruits grown in Australia, in order of size of gross value of production, are grapes, bananas, citrus, apples, pears, peaches and apricots, as shown in figure A (Australian Bureau of Statistics 1991).

In most, if not all, horticultural products, Australia is a relatively small producing nation (tables 1-5). Australia contributes only slightly more than 1 per cent of world citrus production and under 2 per cent of world

Australian gross value of horticultural production Average 1988-89 to 1990-91


Peaches

Apricots

Citrus

Bananas

Grapes

- I I

I I I I I I I I $m 50 100 150 200 250 300 350 400 450

1 World citrus production and fresh citrus exports Selected countries

Egypt Greece Israel Italy Morocco Spain Turkey Cuba Japan Mexico United States Argentina Australia Brazil South Africa

Production Exports

Source: US Department of Agriculture (1992).

2 World apple production and exports Selected countries

Production Exports

1988-89 1989-90 1990-91 1988-89 1989-90 1990-91

European Community 6861 6942 6296 1372 1415 1408 Other Europe 1541 1245 1241 37 1 34 1 329 United States 4 140 4 519 4 398 249 333 360 Other North America 1 044 1 002 990 67 73 82 Japan 968 964 965 2 1 2 Other northern hemisphere 1 962 1 868 1 913 73 83 76

Argentina 1029 1100 950 226 23 1 200 Australia 328 330 292 20 27 31 Chile 650 680 750 327 318 390 New Zealand 328 37 1 394 174 207 219 South Africa 534 530 542 225 218 220

Source: US Department of Agriculture (1992). - -


3 World canned deciduous fruit production and exports Selected fruit and countries

Production

Canned peaches France Greece Italy Spain Argentina Australia Chile Japan South Africa

Canned pears France 19 Italy 57 Spain 12.2 Australia 39 Japan 1 South Africa 26

Canned mixed fruit France 16 Greece 35 Italy 80 Argentina 6 Australia 22 Chile 2 Japan 3 South Africa 38

Canned apricots Greece 39 Spain 11 Australia 8 South Africa 12

Export

( - Negligible. Source: US Department of Agriculture (1992).


4 ~ i r l d orange juice production and exports 65 degrees brix

Production Exports

1988-89 1989-90 1990-91 1988-89 1989-90 1990-91

Germany Greece Israel Italy Mexico Morocco Netherlands Spain Turkey United States Argentina Australia Brazil South Africa

r Re-exports. Source: US Department of Agriculture (1992).

World raisin and sultana production and exports 5 Selected countries (dry weight)

Production Exports

Greece 78 Mexico 11 Turkey 150 United States 3 15 Argentina 7 Australia 60 Chile 25 South Africa 21

Source: US Department of Agriculture (1992).


frozen concentrated orange juice production, around 1.5 per cent of world apple production, about 3 per cent of world pear production and between 7 and 12 per cent of world sultana and raisin production.

Most Australian horticultural production is directed to the domestic market, with exports varying markedly from year to year mainly because of the residual nature of the export market (table 6). Australia's export volumes are only a fraction of those of the large world producers and exporters. Between the years 1985-86 and 1990-91, Australia exported less than 10 per cent of total Australian fresh citrus production, about 10 per cent of apple production and around 16 per cent of wine production.

Of the major horticultural industries only dried vine fruit and canned deciduous fruit stand out from this pattern. Between 60 and 70 per cent of Australian dried vine fruit production is exported in most years, and between 40 and 60 per cent of canned peaches, 60 and 80 per cent of canned pears, 35 and 45 per cent of mixed canned fruits and 10 and 35 per cent of canned apricots.

Similarly, it is only in dried vine fruit and canned deciduous fruit that Australian exports make up a significant proportion of world trade. In the years 1985-86 to 1990-91, Australian exports of dried vine fruit averaged around 9.5 per cent and canned deciduous fruit 11.5 per cent of total world trade. In other horticultural products, Australia generally contributes less than 2 per cent of world trade. For example between 1988-89 and

6 Value of Australian fruit exports

Apples, fresh Pears, fresh Pears, canned Peaches, canned Citrus, fresh Grapes, fresh Dried vine fruit Wine

- -

p Preliminary. Source: Australian Bureau of Statistics (1992); ABARE (1992).


1990-91, Australia contributed between 0.3 per cent and 0.5 per cent of world fresh citrus exports, between 0.8 and 1.1 per cent of world apple exports and between 0.1 and 0.3 per cent of world fruit juice exports.

Another feature of Australian horticultural industries is that, in a world trading environment that has grown rapidly in recent years, Australian horticultural exports have remained relatively constant for most products. There are a few exceptions to this, notably the cut flower export industry and the wine industry, both of which have substantially increased their exports in recent years.

Australia's main competitors in most overseas fruit markets are other southern hemisphere producing countries, such as New Zealand, South Africa and, in particular, Chile and Brazil. These suppliers compete with Australia in South East Asia and are also off-season suppliers to the northern hemisphere markets. Chile alone produces twice and Argentina three times Australia's apple production. Brazil is the largest producer of citrus and frozen concentrated orange juice in the world, producing around nineteen times more citrus fruit than Australia and exporting almost four times Australia's total fresh citrus exports. South Africa is also emerging as a significant competitor on export markets, particularly in wine and deciduous fruit. This has come about largely as a result of the removal of trade sanctions previously placed on that country.

Australia is the largest southern hemisphere producer and exporter of dried vine fruit but competes in European markets with northern hemisphere countries such as the United States, Turkey and Greece. Because dried vine fruit can be stored, the segregation of northern and southern hemisphere competitors is not as relevant. The United States alone produces four times the production and exports twice the quantity exported by Australia.

Australian horticultural producers are likely to face increasing competition on world markets because of the following factors.

Chile has a fast growing and vigorous horticultural sector. Chilean horticultural exports to the United States alone increased in value from US$39 million in 1979 to US$324 million in 1988. Total Chilean apple exports increased from 163 000 tonnes in 1979-80 to 345 000 tonnes in 1987-88. In the same period, pear exports grew from 22 000 to 78 000 tonnes, peaches from 10 000 to 48 000 tonnes, plums from 3000 to


1b Brazilian supply and disposal of orange juice

36 000 tonnes and table grapes from 50 000 to 390 000 tonnes (US Department of Agriculture 1989).

There has been steady growth in Brazilian production and exports of frozen concentrated orange juice with the continued export orientation of that country's industry. Frozen concentrated orange juice production increased by 28 per cent and exports by 21 per cent over the period 1983-91 (figure B). Fresh orange exports increased by 149 per cent to 212 000 tonnes over the same period. Apple production has been increasing, with Brazil expected to have harvested 390 000 tonnes of apples in 1991-92, an increase of 28 per cent on the 1990-91 season. Around 20 000 tonnes are expected to be exported to Europe, around four times the amount exported in 1990-91. Most of these exports are likely to be the newer gala and fuji varieties.


The Australian c h s industry

The citrus industry is one of the largest horticultural industries and one of the largest horticultural exporters in Australia. Nevertheless, it still has similarities with most of the traditional Australian horticultural industries in that:

it is oriented to the domestic market,

it is concentrated in the major irrigation regions,

it has opportunities for both fresh fruit production and a simple processed product - juice,

it faces import competition and

it is undergoing structural changes - farm numbers and real returns are falling and long lead times are hampering adjustment (Proctor et al. 1992).

The analysis does not strictly apply to the annual horticultural industries such as vegetables and parts of the nursery industry.

Production The citrus industry in Australia has regularly accounted for about 20 per cent of the total value of horticultural production over recent years, with a gross value of production of approximately $204 million in 1990-91. Total citrus production over the past five years averaged almost 590 000 tonnes a year.

The Australian Bureau of Statistics (1990) estimated that there were 2621 citrus growers in Australia in 1989-90. The largest number of growers are situated in the Riverland region of South Australia. In Australia, most citrus farms are mixed fruit growing operations and are relatively small, with the average area harvested being 17.4 hectares in 1990-91 (Proctor et al. 1992).


C Citrus growing areas of Australia

1 ~ i G o r areas

Distribution Citrus fruits are grown commercially in almost all Australian states (figure C). They are not grown commercially in Tasmania or the Australian Capital Territory. The main growing areas are regions along the Murray River in South Australia, Victoria and New South Wales, the Murmmbidgee Irrigation Area (MIA) in New South Wales, the central coast region of New South Wales and the Central Burnett region of Queensland around Gayndah and Mundubbera. Smaller areas of production include regions in the central west of New South Wales around Narromine and Bourke and in the south west of Western Australia.

The hotter and dryer inland areas adjacent to the Murray and Murmmbidgee Rivers are the predominant areas of production, accounting for around 70 per cent of total Australian citrus production. These areas, situated between latitudes 31" and 36" south have a mean maximum summer temperature of 31°C, receive 250400 mm of rainfall a year and require supplementary irrigation to ensure crop development. Relative humidity averages about 62 per cent in summer and 50 per cent in winter.


The soils used for citrus production vary from loamy clays, the dominant type in the MIA, to loamy sands and sands in other areas. Over very short distances, soils vary greatly in pH, calcium content and depth, making it difficult for growers to irrigate efficiently, to apply fertilisers efficiently and to select the best rootstocks (Gallasch 1991).

New South Wales accounts for approximately 48 per cent of total Australian citrus output. South Australia follows with 29 per cent, Victoria 12 per cent, Queensland 10 per cent and Western Australia 1 per cent (figure D). Oranges account for approximately 80 per cent of total Australian citrus production, with the main varieties being valencias (the summer orange crop usually harvested between October and April and accounting for 57 per cent of total citrus production) and navels (the winter orange crop usually harvested between April and October and accounting for 23 per cent of total citrus production). Up to 70 per cent of valencia production is used for processing. The remaining 20 per cent of citrus production is divided fairly evenly between mandarins (8 per cent), lemons and limes (7 per cent) and grapefruit (5 per cent).

The Queensland citrus industry Most of the comments in this chapter relate to the Australian citrus industry and refer largely to those sectors of the industry located around the major irrigated regions. By and large, the Queensland sector, which produces around 10 per cent of Australian citrus production, varies quite markedly from the other Australian citrus growing regions and is considered to be the most successful in the citrus industry.

ID Distribution of citrus production, by state, 1989-90

Total 610 000 tonnes

New South Wal

Western Australia 1 %

Queensland 10%

South Australia 29% Victoria 12%


ABARE undertook a survey of Queensland citrus growers in 1991. Data from this survey illustrate that the Queensland citrus industry provides an example of the benefits to be gained from diverting citrus production from the traditional processing market to the more profitable fresh fruit and juice markets and export markets.

Average cash income per farm in Queensland was almost $106 000 in 1990-91, while in the irrigated regions (New South Wales MIA and Sunraysia, Victorian Sunraysia, South Australian Riverland) average farm cash incomes were in the range of $5000 to $23 000 (figure E) (Phillips and Van Hilst 1992). Overall, crop receipts per farm averaged $303 400 in Queensland compared with just over $73 000 in the irrigated regions. Several factors contribute to the above-average performance of the Queensland region including larger farm sizes, higher yields, higher valued crops and more profitable market targets.

Larger farm sizes The average area harvested per farm in Queensland (23.2 hectares) is about 3 1 per cent more than the combined average area harvested per farm for the four major irrigated regions (17.7 hectares).

Higher yields Yields per harvested hectare on the average Queensland farm are significantly higher for the major citrus crops produced. On average, Queensland navel yields were 86 per cent higher, valencias 139 per cent higher and mandarin yields 113 per cent higher in terms of tonnes per harvested hectare compared with the combined average of the temperate zone, irrigated regions during

l~ Average farm cash income, by region, 1990-91

NSW MIA

Sunraysia

NSW other

Victoria Sunraysia

I . ,

Queensland

SA Riverland


1990-91. Such differences in yields could be related to different climate, varieties, soils or cultural practices or a mix of these.

Higher valued crops When a breakdown of the area harvested is considered, the Queensland region varies substantially from the others in terms of the area devoted to the production of mandarins. Mandarins, a relatively higher priced table fruit crop, represent close to 33 per cent of the total orchard and vineyard area in Queensland. In comparison, the average area harvested of mandarins for the four irrigated regions is just over 2 per cent.

More profitable markets Queensland producers are able to benefit from the seasonality of their citrus production. Both new season navels and valencias reach domestic markets well before the bulk of the Australian citrus crop. Queensland growers therefore are able to target the bulk of their crops at the fresh domestic and export markets which command premium prices over processing outlets. The southern irrigated citrus regions are much more reliant on receipts from the lower priced fruit used for processing.

Marketing Marketing agents can be classed as packers, processors, converters and exporters. After harvest, fruit is graded and sold either for the fresh market or, if of a lower quality, sold to processors. A small but growing number of processors of freshly squeezed juice is also emerging in the industry.

After processing, the concentrated product is sold to juice converters, usually situated near the major population centres for sale to retail outlets. The juice converters can also import frozen concentrated orange juice (depending on relative prices and quality) for use in their final product.

The level of vertical integration is constantly increasing in the Australian citrus industry, in both the processed and fresh fruit sectors. For example, several large organisations now exist to grow, pack and export fresh fruit (Australian Citrus News 1991).

On average over the past five years the distribution of the annual citrus crop has resulted in 56 per cent of citrus production being processed, 37 per cent being sold fresh to the domestic market, and 7 per cent being exported as fresh fruit (figure F).


F Utilisation of the Australian citrus crop Average 1986-87 to 1990-91

Total production 590 000 tonnes

At present the industry is making a concerted effort to increase the proportion of fresh fruit to processing oranges, given that processing prices are likely to decline over the medium term because of forecast increases in world orange juice production. This has become evident by the increasing proportions of non-bearing areas of fresh market citrus varieties (such as navels and mandarins) that have been recorded in recent years (Australian Bureau of Statistics 1991).

Another important development has been the rapid growth in the fresh orange juice market in Australia. There has been a sharp increase in sales of fresh orange juice since its introduction to the market two years ago. This appears to be in line with general trends overseas toward increased consumption of products which are perceived to be fresher and therefore healthier than processed products. In Australia, sales of fresh juice are now equal to those of chilled, concentrate related products. Approximately 80 per cent of this growth has been new citrus consumption rather than substitution of other citrus products, lifting total juice consumption by 20 per cent (Irish 1992). Returns to fruit destined for the fresh juice market are generally higher than those of fruit used for processing into concentrate and converting.

Processing There are around fifteen major citrus processing companies operating in the citrtis producing regions of Australia, processing fresh fruit into juice concentrate, for use by the fruit juice companies. The marketing of citrus


fruit for processing varies between states and regions. While some growers supply fruit direct to processors, others deliver their fruit to cooperatives and proprietary packing houses, where, on receival, the fruit is graded, packed and forwarded to the processor.

Minimum prices for factory purchases of fruit are recommended by the state or regional statutory citrus authorities for those varieties and regions under the jurisdiction of the authorities. Prices are recommended on the basis of consultation with both growers and processors. For instance, the Citrus Board of South Australia has the power to issue orders setting prices, with the approval of the South Australian Minister for Agriculture, for the sale of fruit to processors. The price setting powers endure for a maximum of three months.

The industry is at present seeking authorisation from the Trade Practices Commission for the establishment of a national citrus minimum pricing committee that would have equal membership from growers and processors as well as an independent chairman. This committee would have the power to set national minimum prices for fruit delivered to processors. These prices would then be implemented by each state citrus board (Australian Citrus Industry Council 1991). This was also one of the recommendations of the Commonwealth-State Citrus Advisory Group, which was established by the federal government in 1991 to look into the problems faced by the citrus industry and suggest solutions to these problems (Commonwealth-State Citrus Advisory Group 1991). The group argued that there exists greater scope for coordination of pricing powers and estimates of citrus supply and demand by citrus marketing authorities in New South Wales, Victoria and South Australia.

Such schemes are usually only recommended on economic grounds if a situation of market failure exists (Trade Practices Commission 1991). For example, if growers are not getting full information about market conditions or if there is unequal bargaining power between growers and processors. In the case of perennial fruits there may be a problem of short term price signals being inconsistent with long term investment decisions because of long lead times and lags in production response. However, this problem may not necessarily be overcome by introducing a price fixing scheme.

A scheme has been established within the wine industry where prices are centrally negotiated and recommended (but not set) for different wine grape varieties. The proposed benefits of that scheme include:

20 MARE research report 92.14

better distribution of bargaining power because of the existence of common information and reference prices; and

greater awareness of supply and demand factors leading to greater price stability and improved structural adjustment and investment decisions. There may also be a public benefit aspect resulting from a more efficient use of resources (Trade Practices Commission 1991).

It is difficult to justify a price fixing scheme for the citrus industry because of the possible anticompetitive nature of such a scheme. In the case of the wine industry the Trade Practices Commission was concerned about the possible reduction in competition by growers and processors colluding on price negotiations and passing increased prices on to consumers (Trade Practices Commission 1991). For citrus, the benefits arising from greater market awareness can be obtained without the need for price fixing legislation. For example, the dissemination of objective forecasts of supply and demand could improve both the decision making process and the distribution of bargaining power.

Domestic orange juice production competes with imported juice mainly from Brazil. The volume of imports depends largely on relative prices and the level of domestic orange production. Between 1983-84 and 1990-91, imports of orange juice fluctuated from a low of 8 per cent of availability (production plus imports) in 1987-88 to a high of 64 per cent of availability in 1988-89. This proportion was around 30 per cent in 1989- 90 and 1990-91 and is likely to fall in 1991-92.

Exports of orange juice from Australia have averaged about 6 per cent of total orange juice production and about 4 per cent of total citrus production between 1983-84 and 1990-91.

Domestic fresh Packers and grower/packers are the major operators responsible for the domestic marketing of fresh fruit, as well as the agents and merchants that they supply in the various state and regional markets throughout Australia. At present, there are about 150 licensed packers in the Australian citrus industry, a number which has been relatively stable in recent years.

The statutory citrus authorities operating on behalf of the states or regions influence the marketing of citrus through the registration of packing


houses, enforcing packing standards and quality control and other action aimed at improving the marketing of fresh citrus. In support of their marketing policies, local advertising and promotional campaigns are also carried out by these authorities. The citrus industry is a member of the Australian Horticultural Corporation and this has enabled industry generated funds to be made available for generic promotion of fresh citrus fruit and fresh Australian citrus juices on the domestic market.

Fresh fruit exports Fresh fruit of suitable size and quality can be directed to the export market. In 1991 approximately 8 per cent of total production, or a (near) record of over 50 000 tonnes, was exported and handled by 61 licensed cooperatives and private companies operating in the industry. Exporters are usually associated with the packing operations and the majority of citrus exports are controlled by a small number of major companies.

Over the past five years, exports have been directed predominantly to Malaysia, Singapore and New Zealand, which combine to account for a half to two thirds of all citrus exports. South Australia is the major exporting state (accounting for around 53 per cent of total citrus exports), with New South Wales (20 per cent), Victoria (15 per cent) and Queensland (12 per cent) also contributing to the export program.

The export of fresh citrus is largely seasonal and related to the harvest period of the fruit. Most citrus exports from Australia occur between June and September. Exports to some overseas markets and from some citrus producing regions can be affected in certain years if outbreaks of fruit fly occur in these regions. Such outbreaks can either mean loss of access to export markets or increased costs to exporters in post-harvest treatments (Horticultural Policy Council 1991).

Factors affecting competitiveness

Export competition Past reports have indicated that competition can be quite intense between Australian exporters on overseas markets, particularly in South East Asia. For example, the Australian Citrus Growers Federation (1992) reported in reference to citrus exports in 1991 that 'valencias started well but later


over supply led to consignment marketing, unproductive competition amongst Australian exporters and depressed prices particularly in Malaysia and Singapore'. This occurred when Australian exporters had the opportunity to exercise some market power in South East Asian markets because of the shortfall of supplies from California caused by the 'freeze' in citrus orchards in the previous year.

Export licensing for citrus was introduced in May 1991 to improve the coordination of exports within the industry. However, claims have been made that question the effectiveness of such a scheme because of the inability to legally prove any alleged contraventions of the licensing conditions (Australian Citrus Growers Federation 1992). Despite these problems there is now evidence to suggest that steps are being taken toward commercially based coordination among exporters (Australian Citrus Growers Federation 1992).

The issue of a central organisation acquiring and selling citrus under statutory legislation has been addressed briefly by the Australian Horticultural Corporation (1992). Very few studies have specifically addressed the issue of single desk marketing for Australian horticultural industries, although Rae (1988), in a study comparing the Australian and New Zealand apple industries, concluded that a major factor contributing to the New Zealand industry's superior performance was the single seller status of the New Zealand Apple and Pear Marketing Board.

Efforts have been made to increase the coordination of growers, packers and exporters within the citrus industry through the formation of a national packers association (see the boxed section). Recent investments in export packing facilities, adopting the most advanced technology, such as the use of plastic wrapping to prolong the shelf life of fruit or the development of improved packaging containers, have also provided the required foundation for export enhancement (Fox 1991).

Seasonality of production One of the problems facing processors at present is the lack of high quality oranges that can be used for fresh juice during the out of season June-September period when the navel harvest tapers off and before new season valencia fruit become available. The practice of contracting growers to supply fruit is assisting both growers and processors in this regard. In order to ensure processors have a permanent year round supply of oranges


of fresh juice quality, suitable new varieties which can be harvested during the period June-September are required.

Until recently, when the market for fresh juice sales was established, growers were hesitant to plant new varieties. Also, before 1986, imports of citrus budwood was banned for quarantine purposes, therefore allowing growers only limited access to new varieties. The offer of long term contracts from processors to growers is providing growers with the reassurance that their fruit will have a guaranteed buyer at an agreed price. For the fresh juice processor, these arrangements mean that year round planning can be carried out with a reasonable degree of certainty. For example, one fresh juice processor purchases 80 per cent of its fruit requirements on three year contracts to ensure that fruit will be available when needed (Gleeson 1992). Other types of orange juice processors are also beginning to use long term contracts with growers. An example of such an arrangement is the recent announcement by a major processing company of three-year grower contracts at agreed prices that are indexed to the consumer price index (Primary Industry Newsletter 1992).

MARE research report 92.14

Benefits accruing to the processors using such contracts stem from their ability to spread their processing over the year and no longer having to plan around the six month peak production cycles that have traditionally been characteristic of citrus fruits.

Varietal introductions Australia has, for many years, limited the opportunity to adopt improved planting materials (rootstocks, clones and varieties) because of the thirty year ban that existed until 1986 on imports of budwood. The abolition of the ban has provided Australia with the opportunity to improve its market position by introducing superior varieties. Varieties of particular importance which are likely to supersede those existing in Australia include seedless mandarins, red flesh grapefruit and very early or very late season oranges. It is likely that the introduction of these varieties will greatly increase the prospects for the export of Australian citrus on the basis that they produce increased yields of better quality fruit from longer living trees (Gallasch 1990). The introduction of early and late varieties will also reduce the seasonality associated with the fresh fruit and fresh juice sectors.

Tariffs The major citrus commodity imported by Australia is frozen concentrated orange juice. Various tariff arrangements have protected the local industry against imports of orange juice. These have included tariff quota mechanisms, ad valorem tariffs, variable tariff arrangements, composite tariff mechanisms and floor price arrangements. Between 1986 and July 1990, an antidumping duty on imported orange juice maintained a 'floor' price of $A1640/t.

At present, an ad valorem tariff of 15 per cent (10 per cent for developing countries) is imposed on imported citrus juice concentrate. Imports of fresh citrus fruit are free of duty (Commonwealth-State Citrus Advisory Group 1991). Proposed cuts in the tariff announced in the government's March 1991 Industry Statement mean that these tariffs will fall to 5 per cent (or zero on imports from developing countries) from 1 July 1996. Most citrus juice imported by Australia originates in Brazil, which has a developing country status. Therefore, under the developing country status provisions for import tariffs, there will be an effective tariff rate of zero on most imported orange juice by 1 July 1996.

-


Sales tax Producers of fruit juices and fruit drinks having a minimum of 25 per cent local fruit juice content are assisted by reduced sales tax payable on their products comp&ed with sales taxes paid on most other beverages. At present, all non-carbonated fruit juices and drinks incur sales tax at a rate of 10 per cent as opposed to the 20 per cent applied to most other beverages such as soft drinks. The protective effects of the sales tax arrangements for fruit juice were analysed in ABARE (1987), where it was concluded that these arrangements may either provide assistance to growers (when local juice is in short supply) or merely tax consumers.

The Industries Assistance Commission (1988) recommended in its report on the fruit and fruit products industries the removal from 1 July 1991 of the requirement in the concessional tax arrangements for fruit juice products that 25 per cent of the fruit juice content be of Australian, New Zealand or Papua New Guinea origin. Following considerable industry opposition, however, this recommendation has not been implemented (Commonwealth-State Citrus Advisory Committee 1991).

Research and promotion Legislation governing the establishment of the Horticultural Research and Development Corporation on all of the horticulture industries covered was enacted in 1987 to allocate funds to research for its member industries. Funding of research and development is based on equal contributions by industry and the Commonwealth government. The government matches each dollar contributed by the industry up to 0.5 per cent of the gross value of production of that particular industry. Member industries can contribute funds in a number of ways including statutory levies, voluntary levies or voluntary contributions to specific projects, depending on the majority wishes of the producers.

Expenditure on research and development by the Horticultural Research and Development Corporation increased from $2.1 million in 1989-90 to $5.4 million in 1990-91. It was expected that $9.4 million would be spent in 199 1-92 (Horticultural Research and Development Corporation 1992). In 1990-91, the rate of levy collected was 50c/t for citrus. Total revenue collected for citrus research and development was just under $600 000 in 1990-9 1 (Horticultural Research and Development Corporation 199 I), representing around 0.29 per cent of the gross value of production for these industries.


The Australian Horticultural Corporation is a national statutory authority which was established in 1988 to facilitate the marketing of Australian horticultural products, to promote products on domestic and overseas markets and to assist in the development of Australia's horticultural industries. Membership of the Corporation is voluntary. The citrus industry was one of the original member industries of the Australian Horticultural Corporation. Other member industries include apples, pears, nursery products, avocados, nashi fruit, dried fruit, chestnuts and macadamias.

Some of the functions carried out by the Australian Horticultural Corporation (1992) include:

the establishment of a market intelligence and research network to aid market planning;

the development of quality management systems to ensure standards are met for export and domestic markets;

the granting of export licences (without restrictions on the number of licences) for apples, pears, nashi fruit and citrus;

the negotiation of shipping freight rates and services;

the promotion of products on domestic and export markets; and

the continuation of efforts to improve Australia's international market access for horticultural products.

Funding of the Australian Horticultural Corporation is provided largely by compulsory levies paid by members of participating industries. In 1990- 91 total operating expenditure was just over $5 million, with around 80 per cent of this amount being sourced from industry contributions. The citrus industry contribution amounted to $570 000 or 0.28 per cent of the gross value of Australian citrus production.


I I The US cihzls industry I

Production In the United States, citrus fruit is grown commercially in the temperate regions of California, Arizona and Texas and the more subtropical region of Florida (figure G). Total US citrus production in 1990-91 was 10.3 million tonnes from an area of 344 108 hectares and with a total value of US$2494 million (table 7).

The major US citrus producing state is Florida which, from 1988-89 to 1990-91, accounted for between 62 and 65 per cent of all US citrus tree bearing area and 63 per cent (in 1989-90 when the Florida crop was badly affected by frost) to 81 per cent of all citrus production by volume. As in Australia, citrus yields in the subtropical regions in the United States are higher than those in the temperate regions. For example, in 1990-91, citrus


7 US citrus production, utilisation and value

Bearing area

Utilisation Fresh Processed

Value of production Production

Arizona 1988-89 14 569 1989-90 14 609 1990-9 1 14 569

California 1988-89 102 751 1989-90 100 930 1990-9 1 101 415

Florida 1988-89 213 960 1989-90 216 347 1990-9 1 224 886

Texas 1988-89 11 696 1989-90 12 829 1990-91 3 238

Total United States 1988-89 342 975 1989-90 344 715 1990-9 1 344 108

Source: US Department of Agriculture (1991a).

yields were 36.8 t/ha in Florida, 20.0 t/ha in Arizona and 16.8 t/ha in California. Average yields for the United States were 29.9 t/ha in 1990-91.

The next largest producing state is California. The industry in that state accounts for around 30 per cent of US citrus bearing area. In normal years, Californian production is less than a third that of the Florida sector and between 17 and 34 per cent of total US production.

Both the Arizona and Texas citrus industries make up only very small proportions of the total US citrus industry, each accounting for around 4 per cent of bearing area and 1-3 per cent of production. The citrus industry in Texas was virtually wiped out in 1990-91 as a result of subzero temperatures and subsequent tree deaths in that year.


The largest group of citrus fruits grown in the United States is oranges, making up about 70 per cent of all citrus in terms of production. Grapefruit account for around 20 per cent.

The Florida industry was badly affected by severe frosts throughout the 1980s. Fairchild and Lee (1989) estimate the damage from the major Florida freezes in the 1980s prior to 1989 to be the loss of over 80 000 hectares of citrus or approximately 40 per cent of existing bearing areas. The 1983 and 1985 freezes alone caused over US$1.2 billion worth of damage. Similar figures are not available for damage from the 1989 frost, but some indication of the extent of the damage from the 1989 freeze can be ascertained from the 1989-90 Florida production and value figures in table 7, with production down by 28 per cent from the 8.6 million tonnes produced in 1988-89.

The Florida industry has recovered rapidly from the frosts and concerted efforts have been made to replant trees. The area of new plantings during the 1970s in Florida was 5250 hectares a year but from 1986 (after the 1985 freeze) to 1989 this jumped to 25 500 hectares a year, an almost fivefold increase (Fairchild and Lee 1989). One of the implications of this extensive replanting program is that Florida growers have taken the opportunity to plant improved citrus varieties that have been developed over the past twenty years or so.

The likelihood of frost damage and the subsequent need to replant orchards will remain a problem in Florida and must contribute to higher growing costs.

Marketing The US citrus industry is largely oriented toward the processing of fruit - around 70 per cent of all citrus. Florida has traditionally produced citrus fruit for processing and frozen concentrated orange juice production, while California-Arizona and Texas have traditionally been fresh citrus producing states.

Processing Florida produces approximately 98 per cent of US frozen concentrated orange juice. Unlike the Australian industry, the Florida processing citrus industry is based largely on dryland (non-irrigated) production.

30 ABARE research report 92 .I4

Table 8 shows the breakup of processing uses for Florida oranges. For the years shown, 68-79 per cent of Florida processing oranges went to the production of frozen concentrated orange juice, 21-31 per cent to chilled products (mostly orange juice) and less than 1 per cent to other processing uses.

In Florida, fruit is generally delivered to the packing houses and processors who also organise the marketing and selling functions. Fruit destined for processing is usually delivered directly to the processor by shippers, though some fruit may come from packing houses if it is rejected for the fresh market. Processors sell their product either under the brand names of the large retail supermarkets or under their own labels. Orange juice and other products may be sold domestically on the retail market (the majority of product), to domestic institutions (such as schools) or on the export market.

The main types of firm in the processing industry are:

cooperatives (usually grower controlled), which account for approximately 22 per cent of Florida processing capacity;

large vertically integrated family operations, which control around 10 per cent of processing capacity; and

large subsidiaries of national food conglomerates, which control around 35-45 per cent of fruit processing capacity (Ward and Kilmer 1989).

Despite the range of firm types involved in processing, the largest four Florida processors account for approximately 35-40 per cent of production.

8 Oranges processed, Florida

Frozen Chilled Other Total concentrates products processed processed

1988-89 4 643 1 221 47 5910 1989-90 3006 1381 27 4 414 1990-9 1 4 251 1 566 23 5 841

Source: US Department of Agriculture (1991a).


Furthermore, around 97 per cent of domestic retail orange juice goes through large retail food outlets.

Because of the domestic market orientation of the US citrus industry, most of Florida's frozen concentrated orange juice output is produced and marketed (both domestically and for export markets) in consumer packs rather than bulk packs. In contrast, the predominantly export oriented Brazilian industry markets its product in bulk form (up to shipping container size).

Domestic fresh h i t Most fresh fruit has traditionally come from California, Arizona and Texas. Prior to the last US 'freeze' at the end of 1990, in 1989-90, California produced 3.3 million tonnes of citrus. Of this production, 2.2 million tonnes (67 per cent) were sold on the fresh fruit market. Texas produced 100 000 tonnes of citrus of which 80 000 tonnes were used in the fresh fruit market. Arizona produced 200 000 tonnes, with around 45 per cent sold as fresh product. In comparison, only 14 per cent of Florida's production was used for fresh fruit production in 1989-90, although this still represented 889 000 tonnes (27 per cent of the national total) of citrus and 242 000 tonnes of oranges.

The fresh markets in California-Arizona and, to some extent, Texas are dominated by large cooperative handlers and marketers. The largest cooperative is Sunkist Growers Inc. The market strength of Sunkist has been weakened in recent years by the opening of several private marketing firms.

These cooperatives generally facilitate the arrangement of contracts between growers, cooperative owned packing houses, agent owned packing houses and district fruit exchanges. They also organise the picking, packing, grading, etc. of the fruit on behalf of the grower and organise the marketing of frzit through district fruit exchanges (Mueller, Helmberger and Paterson 1987). The cooperatives, under various brand names, also control a large share of the Califoinia-Arizona processing capacity.

Fresh h i t exports Fresh citrus exports make up only a small proportion of total US production, approximately 8 per cent or 853 000 tonnes in 1990-91 (US


Department of Agriculture 1991a). However, they account for around 45 per cent of world trade. Most of these exports go to Canada, Japan, the European Community and Hong Kong.

The largest two exporters of fresh citrus in the United States are Sunkist Growers Inc. and Sealdsweet (the Florida central exchange cooperative). Most exports are undertaken with direct connections between these selling organisations and large foreign importers and trading companies.

Factors affecting competitiveness In the United States, the main forms of government assistance accorded the citrus industry are market programs (for promotion and export) and marketing orders.

Market programs Under the Market Promotion Program, the US Department of Agriculture is able to use Commodity Credit Corporation funds to 'encourage the development, maintenance and expansion of commercial export markets for agricultural commodities through cost share assistance to eligible trade organisations that implement a foreign market development program' (1990 US farm bill). Market Promotion Program funds are available to non-profit industry bodies and are largely used for promotion and advertising in target markets. Around 75 per cent of Program funds are used for consumer related advertising and promotion, the remaining 25 per cent for trade servicing, technical assistance and trade shows (US Department of Agriculture 199 1 c).

The Export Incentive Program is designed for private exporting companies. Under the provisions of the Program, which is used exclusively by horticultural firms for export promotion only, brand promotion expenses incurred by exporting companies may be reimbursed.

Both programs are matching-funds programs. The 1990-91 financial year budgeted allocation for the Market Promotion Program and the Export Incentive Program for horticultural products alone was US$95.4 million. This is budgeted to be slightly lower in the 1991-92 financial year at US$91.1 million. The allocations for citrus promotion are set out in table 9. Direct allocations to citrus in California, Arizona and Florida make up 20 per cent of total Market Promotion and Export Incentive Program


9 US government program allocations to citrus

Market Promotion Program 5.3 8.9 Export Incentive Program 13.7 9.2

Total 19.0 18.1

Source: USDA (1992).

direct allocations to horticulture. There are further Market Promotion allocations to other horticultural organisations, such as the American Horticultural Marketing Council, which may also benefit the citrus industries.

Marketing orders The major goal of marketing orders is to improve grower returns. The main means of doing this is by using quantity controls to support prices. In the citrus industry, allocation programs are used. Under these programs allocations are made of the proportions of fruit going to the processing and fresh markets. In the US lemon industry, they have been used to maintain differences in prices in the fresh and processed product markets.

In the United States, marketing orders are legally binding marketing plans which allow agricultural producers in designated regions to control the quantity and quality of products marketed and to engage in market support activities. They are generally only used by horticultural industries but there are also marketing orders in place for the milk industry. A number of specific powers are granted to industries under marketing order legislation. These can be divided into three groups: intraseasonal regulation, quality control and market support.

The two instruments under the intraseasonal regulations are shipping holidays and handler prorates. Shipping holidays are temporary bans on the shipping of fruit to markets during periods of oversupply. Handler prorates are used when the supply of fruit being sent to the market (usually the fresh fruit market) is limited and quotas of that supply are distributed between handlers. Any remaining fruit is usually diverted to processing or export markets.


Included under the category of quality control are regulations governing grade, size and maturity. These regulations are used for controlling sales of fresh citrus products and any excess product is diverted to processing or export markets.

The market support category covers package and container regulations, research and development administration and advertising and promotion. Package and container regulations control the size, weight, dimensions or packing of containers for citrus products. The advertising, promotion and research and development orders are self-explanatory and allow a coordinated approach to these areas to encourage industry advancement.

French (1988) found that for almost all of these measures, the benefits were either indiscernible or the benefits that accrued to producers andlor handlers were greatly outweighed by the costs to consumers. The exception was the marketing order under the category of market support for research and development, generic advertising and promotion, and package and container regulations which, he concluded, 'appeared to provide benefits in excess of costs'.

Because the federal marketing orders are designed mainly for the fresh markets, a state based marketing order operates in Florida. The Florida state order applies to all fruit produced and/or shipped from Florida in either processed or fresh form. The order allows direct taxing on citrus production to fund the market coordination functions. The state order also allows the operation of the Florida Citrus Commission. The Commission regulates quality and standards and implements a national and international promotion program through the Florida Department of Citrus.

The marketing orders run by the Department are funded by excise taxes on every box of citrus and an import equalisation tax on citrus imported into Florida. The 1989-90 budget for the Department was US$77.2 million, of which US$65.4 million was spent on marketing programs for Florida citrus, $3.9 million on research (consisting of US$1. 1 million for market research, US$0.4 million for economic research, and US$2.4 million for scientific research). The other US$7.9 million was budgeted for regulatory and administrative functions or maintained as reserves.


Dtreremes between the Austrdkn and US & industries andpolicy implications

Cost of citrus production In this chapter the cost of producing oranges in both Australia and the United States are compared. Data for the Australian industry are based on the results of the 1988-89 ABARE Australian horticultural industries survey, while data for two producing regions of the United States, California and Florida, are based on 'Costs of producing oranges and grapefruit, 1988-89' by Buxton (1991).

In order to make direct comparisons between the US and Australian data, a subset of farms from the Australian horticultural survey was defined, such that over 90 per cent of total cash receipts were obtained from citrus production. This definition was used so that costs of production could be allocated to citrus production only and thus be directly compared with the US data.

The American study (Buxton 1991) was based on costs per acre planted to oranges, whether bearing or non-bearing, and it is assumed that the mix of bearing and non-bearing areas represents the long term mix of trees needed to maintain productive orchards. The study concludes that this may well be the case for California, where about 5 per cent of total trees are non-bearing. In Florida, non-bearing trees accounted for around 44 per cent of total trees, reflecting the major replantings following the frequent freezes in Florida during the 1980s. Thus, costs per acre in Florida are likely to be understated because of the high proportion of non-bearing trees and the consequent lower costs resulting from the significantly lower fertiliser, chemical and labour requirements compared with those for bearing tree areas.

The costs of production for the Australian industry have been defined in such a way that items are as close as possible to the ones reported in Buxton (1991). There are, however, some items that are unique to each area. Also some production costs may be included in other items. For example, the cost of irrigation water is included in total rates and taxes for Australia whereas these costs are identified separately for California and Florida.


10 Citrus receipts and costs in Australia, California and Florida in 1988-89 a Average per farm

Unit Australia b California Florida

Sample size no. 23 109 64

Total crop area ha 21.2 56.3 165.5 Area planted to navels and valencias c ha 18.2 15.4 53.0 Area bearing trees ha 16.0 14.6 29.7 Production t 356 407 937 Yield t/ha 19.5 26.4 17.7 Yield per bearing area t/ha 22.3 27.8 31.6 Receipts $A/t 254 283 278

Gross receipts $Aha 4 977 7 487 4 922

Cash costs Nursery stock, trees and seed $Aha 42 38 39 Fertiliser $Aha 178 299 429 Chemicals and biological pest control $Aha 226 640 423 Fuel oil and grease $Aha 157 na na Fuel, lube and electricity $Aha na 436 117 Repairs and maintenance $Atha 384 374 162 Other material costs $Aha 22 na na Contracts $Aha 118 132 82 Packing, handling, marketing, freight $Aha 129 na na Hired labour $Aha 792 1 789 908 Total rates and taxes $Aha 274 236 219 Purchased irrigation water $Aha na 297 1 General overhead costs $Aha na 602 264 Phone, accounting, administration $Aha 81 na na Other administrative expense $Aha 78 na na Other motor vehicle expenses $Aha 77 na na Insurances $Aha 98 na na Interest paid $Aha 171 61 1 154 Other costs $Aha 358 323 245

Total cash costs $A/ha 3 185 5 778 3 043

Depreciation d Vehicles, tractors etc $Aha 224 108 78 Equipment $Aha 124 6 1 25 Irrigation and water supply $ M a 96 168 194 Wind machines (regular and FTO) $Aha na 113 0

Total depreciation $Aha 444 450 298

Cash receipts less cash costs less depreciation $Aha 1 348 1 259 1 582

Total cash costs per tonne $A 163 218 172 Total cash costs & depreciation per tonne $A 186 236 189 Cash receipts less cash costs less depreciation per tonne $A 68 48 89 a Converted to Australian dollars using the average US$/$A exchange rate for 1988-89. b Includes only the Murmmbidgee Irrigation Area and the Sumaysia and Riverland regions. c Includes small amounts of other citrus varieties for Australia. d Depreciation figures for Australia are. 1987-88 averages per hectare for all surveyed citrus farms. na Not available. Source: ABARE, Australian horticultural industries survey 1991; Buxton (1991).

Competitiveness of citrus industries 3 7

The results of the comparison are presented in table 10. The size of the total fann enterprise is substantially larger in both California and Florida than in Australia. While the area planted to oranges is lower in Australia than in Florida it is larger than in California. Yields per hectare planted are lowest in Florida, mainly reflecting the large area of non-bearing trees. However, yields on a per bearing hectare basis are in fact highest in Florida. In both cases Australian yields are probably understated because of the very low production in 1988-89 caused by adverse climatic conditions. This can be seen in figure H where the yield per bearing hectare is at the lowest level for the entire ten year period. This is in contrast to yields in Florida during 1988-89 which were in fact historically high. Californian yields in 1988-89 were about average for the 1980s.

Receipts per hectare are similar for both Australia and Florida, but are substantially lower than those achieved in California. Citrus cash receipts were higher for Australia in 1988-89 than for an average year because processing prices reached a record high and more than offset lower yields in that year. A comparison of costs and receipts for citrus production in Australia is presented in table 11 for the period 1983-84 to 1988-89 and 1990-91. This comparison highlights the fact that receipts per tonne were abnormally high in 1988-89, while production, and hence yields and costs, were lower than for a more average year.

Total cash costs per hectare are similar for both Australia and Florida at just over $3000, while in California they were almost $5800. This is most likely a reflection of the much greater reliance on the production of fruit

H Orange yield per bearing hectare


11 Costs of citrus production in Australia

1983 1984 1985 1986 1987 1988 1990 Unit -84 -85 -86 -87 -88 -89 -91

Sample no. 27 30 30 20 24 23 31

Total crop area ha 21.8 21.2 30.0 28.8 21.1 21.2 25.1 Citrus area planted ha 15.2 15.4 17.8 17.3 16.4 18.2 19.2 Area bearing trees ha 12.4 13 15.8 15.6 14.5 16.0 18.0 Production t 303 358 501 480 423 356 429 Yield tiha 20 23.3 28.2 27.7 25.7 19.5 22.3 Yield per bearing area t/ha 24.4 27.6 31.6 30.8 29.2 22.3 23.9 Receipts $A/t 197 237 201 170 182 254 175

Gross receipts $Aha 3 941 5 522 5 668 4 724 4 705 4 977 3 914

Cash costs Nursery stock, trees and seed $ M a 25 7 7 14 19 42 34 Fertiliser $A/ha 62 108 129 141 104 178 205 Chemicals and biological

pest control $Aha 177 143 164 128 214 226 165 Fuel oil and grease $ M a 167 209 244 168 173 157 165 Repairs and maintenance $Aha 198 254 319 275 352 384 277 Other material costs $ M a 269 655 234 23 50 22 310 Contracts $Aha 35 69 85 30 138 118 58 Packing, handling,

marketing, freight $Aha 465 473 872 1 164 396 129 na Hired labour $Aha 551 739 993 1 168 1 087 792 810 Total rates and taxes $ M a 282 279 204 277 278 274 359 Phone, accounting, administration $Aha 78 117 110 100 106 81 115 Other administrative expenses $Aha 20 42 34 50 123 78 13 Other motor vehicle expenses $Aha 52 56 56 97 87 77 na Insurances $Aha 88 99 148 96 71 98 110 Interest paid $A/ha 154 256 172 180 221 171 272 Other costs $ m a 396 588 407 282 323 359 376

Total cash costs $Aha 3 021 4 093 4 179 4 193 3 740 3 185 3 269

Cash receipts less cash costs $A/ha 919 1 429 1 489 531 964 1 792 645

Total cash costs per tonne $A 151 176 148 151 145 163 146 Cash receipts less cash

costs per tonne $A 46 61 53 19 37 91 29

Source: ABARE, Australian horticultural indusrries survey 1991.


for the fresh domestic and export markets in California (this is also seen in the higher cash receipts) and thus the extra costs involved in producing quality table fruit as opposed to fruit for processing. In fact, only about 30 per cent of total orange production in California was used for processing in 1988-89 compared with 94 per cent in Florida and an average of just under 60 per cent for Australia.

Looking at the costs individually, nursery trees, contracts and rates and taxes are of a similar level for all three areas. Fertiliser and chemical costs appear to be generally lower in Australia than in California and Florida. The major differences in costs per hectare between Australia and Florida compared with California are in labour costs and interest payments, with both items being much higher in California (again probably because of the fresh market orientation of the Californian growers). Total depreciation costs per hectare are similar for Australia and California but lower in Florida. Cash receipts less cash costs and depreciation, per hectare in 1988-89, were highest in Florida at almost $1600, compared with Australia and California at around $1300.

On the basis of this analysis, Australian citrus receipts, production costs and receipts less costs and depreciation, per hectare, appear to have been comparable to those of Florida in 1988-89, while receipts minus costs and depreciation per hectare are similar to those achieved in California. Similar results are achieved when receipts, costs and the difference between the two are calculated on a per tonne basis (see table 11 for a comparison of costs and receipts for Australia in previous years).

Juice yield and the production of frozen concentrated orange juice While on a per hectare basis, the costs of producing oranges in Australia appears to be broadly comparable with those in Florida, there does appear to be a substantial difference in the quantity of fresh oranges required to produce one tonne of frozen concentrated orange juice at 65 degrees brix (the homogeneous internationally traded commodity).

In Florida an average of just under 10 tonnes of fresh fruit are needed to produce one tonne of frozen concentrated orange juice (US Department of Agriculture 1991a). A similar figure is found for the other major world orange juice producer, Brazil. According to Gallasch (1990), to produce a tonne of frozen concentrated orange juice in Brazil also takes

40 D A R E research report 92.1 4

approximately 10 tonnes of fresh fruit. However, in Australia the average appears to be substantially higher. The Australian Customs Service (1991) quotes a figure of 12.52 tonnes, while an estimate of 14 tonnes is referred to by Gallasch (1990).

The significance of this difference between the juice yield (or the amount of total soluble solids recoverable from one tonne of fresh fruit) in Florida and Brazil compared with Australia indicates that Australia is at a substantial disadvantage in producing frozen concentrated orange juice. Thus, the costs of production described in the section above for Australia are much higher when it is considered that it may take between 25 and 40 per cent more fresh oranges to produce one tonne of frozen concentrated orange juice. Australia processes around 60 per cent of its total citrus production into juice, with over two thirds of this being used for the manufacture of frozen concentrated orange juice (the remainder being marketed as fresh juice). Therefore, if a true comparison of the relative cost structures of Australia and Florida is undertaken, it can be seen that the costs of producing fruit in Australia for the manufacture of frozen concentrated orange juice may be up to 40 per cent higher than in Florida.

Some possible reasons for this substantially lower juice yield in Australia may be related to the rootstocks, clones and varieties grown here, climatic conditions, management practices, processing technology and so on. Both industries are concentrated in relatively small regional areas. Broadly speaking, in terms of climate, the Florida and Queensland industries can be classed as similar, although fruit in Florida is predominantly grown for juicing whereas in Queensland citrus is predominantly directed toward the fresh fruit market. The rest of the Australian regions are roughly similar to the Californian, Arizona and Texas areas. Again the difference between the countries is that the irrigated regions in Australia produce fruit for processing whereas the American counterpart regions produce for the fresh market.

At present, processing technology in the two countries appears to be very similar. Both the United States and Australia use the entire fruit (both flesh and skin) to extract juice and therefore different processing techniques do not appear to explain the differences in juice yields. From February 1993, the National Food Authority has ruled that Diffusion Extracted Juice (the result of the process of using the rind in juice production) will not qualify as juice content. The difference in juice yield is therefore

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likely to widen between the two countries as a result of this decision (Australian Citrus Growers Federation 1992).

There is evidence to suggest that the Australian industry has been disadvantaged by the inability in the past to introduce and establish more efficient varieties of scion and rootstock material. According to Gallasch (1990), the Australian citrus industry is well behind most other major citrus producing countries in the development (identification, selection) and use of superior rootstocks, clones and varieties. This is largely the result of a thirty year quarantine based ban on the introduction of budwood (rescinded in 1986) and the relatively small amount of resources invested in research. An examination of orange yields in Australia, California and Florida provides some evidence of this (figure H).

Further evidence is provided in Rae (1988) who, when comparing the Australian and New Zealand apple industries, concluded that New Zealand's more efficient performance could be attributed to:

higher yields, which contributed to lower costs of production,

faster adoption of new apple varieties,

greater price stability,

lower shipping costs and

market controls of the New Zealand Apple and Pear Marketing Board.

The use of superior rootstocks is probably the most cost effective means of producing healthy, long living trees which produce larger crops of superior quality fruit (Gallasch 1990). While this problem has been overcome to some extent by the lifting of the quarantine ban and the introduction of plant variety rights in Australia, long lag times are still involved in releasing new imported varieties from quarantine and trialing new varieties under local conditions.

In a review of quarantine procedures hndertaken by the Department of Primary Industries and Energy (1988) several cases were cited in which plant material was held in quarantine for between ten and seventeen years. During this time new varieties had already entered Australia by illegal means, bringing with them the possible risk of disease.


In another review of quarantine procedures, by the Horticultural Policy Council (1990), the main problems identified were:

an insufficient number of overseas establishments accredited for quarantine, which slows down the rate of import of plant materials, and

a current lack of space at government quarantine holding facilities, which is likely to be exacerbated by the introduction of plant variety rights.

In competing with overseas countries for superior varieties, such strict quarantine regulations and lack of resources for trialing new varieties could impede the development of viable alternative sectors of the Australian industry (for example, the fresh export sector). The Horticultural Policy Council has set up a consultative committee to look at problems involved with horticultural quarantine. One of the main issues that has been analysed to date is the possibility of accrediting overseas establishments to allow prequarantine clearance of plant materials to be imported into Australia.

There now exists an increasing need for research in Australia into new varieties and, in particular, a need for objective benefit-cost analyses of the introduction of new plant materials from both overseas and Australia. Increased emphasis needs to be placed on economic analyses of the costs and benefits of quarantine regulations on a case by case basis for new and internationally competitive varieties being imported into Australia. These analyses would take into account the costs of time delays involved in quarantining and trialing varieties, the benefits of producers becoming more internationally competitive as well as the risk of introducing disease.

Increased research on the development of new varieties would require greater funding for the research as well as for evaluating new varieties under Australian conditions and wider and faster dissemination of the results to growers.

Size and structure Similar arrangements exist in both the United States and Australia in relation to the sale of citrus from the grower to the packer and processor. The bulk of both industries' production is destined for the domestic market, although the domestic market in the United States is much larger. There are, however, many differences between the two industries. The


United States is one of the world's largest producers and exporters of citrus and citrus products. Prior to the mid-1970s, the United States led the world in citrus and orange juice concentrate production and exports but has now been overtaken by Brazil, largely as a result of the series of tree killing freezes in the 1970s, 1980s and 1990.

There does not appear to be a significant difference in economies of size at the farm level in either the US or Australian citrus industries (with the exception of the Queensland sector). Average farm sizes differ between the total Australian average and the California and Florida averages. In Australia in 1988-89 the average crop area was 21.2 hectares, compared with 56.3 hectares in California and 165.5 hectares in Florida. However, this size difference is not reflected in significant differences in cash costs per hectare. (Also the Australian average does not include the Queensland industry which has large citrus farms.)

There may be size advantages captured in the latter stages of the production process (processing, converting, packing and distribution) by large scale cooperatives and companies in the United States. In comparison with the relatively large number of packers and processors in Australia, there are only a few major cooperatives packing fresh citrus for both domestic and export sales and a small number of processors in the United States.

At the retail level, a small number of retail chains are dominant in both countries, and similar arrangements appear to exist for purchasing product for retail sale. However, with no data available on cost structures in processing, packing and exporting operations in Australia and the United States, there is no empirical evidence to suggest that such economies of size exist.

Government regulations, research and development and promotion Both the Australian and US governments offer similar forms of assistance for market promotion, research and quality control but very different levels. In Australia, these activities are carried out by the statutory citrus authorities, the Australian Horticultural Corporation and the Horticultural Research and Development Corporation.

In the United States, these activities come under the control of the Market Promotion Programs and the marketing orders, both administered by state


and federal governments. In the United States, however, the budget for promotion and research is much larger. In 1990-91, U S 1 9 million (or 0.76 per cent of the gross value of US citrus production) was allocated to general market promotion and export incentive programs for citrus. This compares with $570 000 (or 0.28 per cent of the total gross value of Australian citrus production) spent on citrus promotion in Australia. In 1989-90, US$69 million (or 16 per cent of Florida's total gross value of

I citrus production) was spent on quality control, promotion and research in Florida alone. Although not strictly comparable, in Australia, almost $600 000 (or 0.29 per cent) was spent on citrus research and development in 1990-91.

Therefore, even using these broad comparisons, on a relative scale, funding in the United States is more than in Australia as the proportion of funds to the total value of citrus production is considerably higher. Another difference is the specific targeting of export markets in promotion and the brand specific nature of promotion in the United States' major export markets.

Australian citrus growers may benefit greatly by increasing the amount of funding for research and development and promotion. This is particularly important to allow new, more competitive varieties to be researched, trialed and introduced in Australia. Also it would allow research to be carried out on methods to speed up the introduction of new varieties, for example, by objective benefit-cost analysis of the introduction of specific varieties. Such research could enable faster introduction of imported varieties through quarantine by measuring whether the benefits of increased export competitiveness and profitability outweigh the costs and associated risks likely to result from the possible introduction of disease. Similarly, the introduction of new Australian developed varieties may be assisted by careful economic analyses of expected returns to growers. More funds to aid and speed up the dissemination and extension process of introducing new varieties would also assist grower competitiveness.

Without research into the effectiveness of the types of promotion carried out by the United States, it is difficult to recommend following the US methods. However, such research should help to ensure that scarce promotional funds are used in the most efficient manner.

Marketing orders enable the US citrus industry to support domestic prices by exercising quantity controls. Although to some extent the power of the


Australian statutory citrus authorities in licensing packers also enables some form of quantity control, increasing these powers to the Australian citrus industry would result in overall losses to the Australian economy because of the associated distortionary effects on resource allocation and efficiency. As previously mentioned, French (1988) found that for such arrangements in the United States the benefits to producers were achieved by increased costs to consumers.

Applicability of citrus findings to other horticultural industries Some of the issues identified here as impediments to the efficiency of the citrus industry can be applied to other horticultural industries, in particular other perennial fruit industries. For example, other industries have also been subjected to similar quarantine restrictions in terms of past import bans on new varieties and long lag times in introducing new varieties from overseas.

Keeping pace with new varieties developed overseas will become particularly important for all horticultural industries to develop and maintain internationally competitive and profitable industries. This will require careful analyses of the benefits and costs of introducing imported varieties to enable faster introduction through quarantine regulations as well as assessing the economic feasibility of introducing new varieties whether from overseas or within Australia, taking into account the need to market any increased production overseas.

Similar research to that recommended for the citrus industry on the relative effectiveness of various promotional methods would benefit other horticultural industries in Australia, in particular those with export outlets.

Research and development and promotional funds for most horticultural industries are low. For example, for those industries for which data are available, funds spent on research and development and on promotion as a proportion of the gross value of production are around 0.1 per cent and 0.7 per cent respectively for the apple and pear industry and 0.1 per cent and 0.2 per cent respectively for the nursery industry. Most horticultural industries do not have any formal collection process for either research and development or promotion. A more concerted effort by industries to improve such funding arrangements would allow the necessary research and development and promotional activities to be more effectively carried out.


References

ABARE 1987, The Fresh Fruit and Fruit Products Industry, An ABARE Submission to the Industries Assistance Commission, AGPS, Canberra.

- (1988), The Dried Vine Fruit Industry, AGPS, Canberra.

- (1989), Export underwriting in the apple and pear industries, Submission to the Industries Assistance Commission, Canberra.

- 1992, Agriculture and Resources Quarterly, vol. 4, no. 2 (and previous issues).

Australian Bureau of Statistics 1990, Agricultural Industries, Structure of Operating Units, Australia, cat. no. 7102.0, Canberra.

- 1991, Summary of Crops, Australia, cat. no. 7330.0, Canberra.

- 1992, Foreign Trade: Magnetic Tape Service, March 1992, cat. no. 5464.0, Canberra (and previous issues).

Australian Citrus Growers Federation 1992, Annual Report 1992, Adelaide.

Australian Citrus Industry Council 199 1, Annual Report 1991, Adelaide.

Australian Citrus News 1991, 'Vitor and Sunnycliff Orchards to Merge', Australian Citrus News, vol. 68, April, Adelaide.

Australian Customs Service 199 1, Frozen Concentrated Orange Juice from Brazil, Report and Preliminary Finding no. 9115, Canberra.

Australian Horticultural Corporation 1992, Industry Commission Inquiry into Horticulture, Submission by the Australian Horticultural Corporation, Sydney.

Buxton, B.M. 1991, 'Costs of producing oranges and grapefruit', Fruit and Tree Nuts: Situation and Outlook Report, March, U S Department of Agriculture, Washington DC.


- - - -

BAE (Bureau of Agricultural Economics, now ABARE) 1985, Vegetable Growing and Processing Industries, AGPS, Canberra.

- (1986a), Citrus Fruit Growing Industry, AGPS, Canberra.

- (1986b), Deciduous Canning Fruit Industry, AGPS, Canberra.

Commonwealth-State Citrus Advisory Group 1991, The Report of the Commonwealth-State Citrus Advisory Group, Department of Primary Industries and Energy, Canberra.

Department of Primary Industries and Energy 1988, Australian Quarantine Requirements for the Future, Report of the Quarantine Review Committee, AGPS, Canberra.

Fairchild, G.F. and Lee, J.Y. 1989, The Impact of Export Promotion and Competitiveness on Market Development and Maintenance: The Citrus Example, Staff Paper 375, University of Florida, Gainsville, Florida.

Fox, K. 1991, 'Changing technology to meet new consumer demands', Australian Citrus News, vol. 67, August, Adelaide.

French, B.C. 1988, 'Fruit and vegetable marketing orders in the United States, 1937-1987, a review', Australian Horticulture, no. 223.

Gallasch, P.T. 1990, Citrus Study Tour to Brazil 1990, Department of Agriculture, South Australia.

- 1991, 'Rootstocks used in Australia and their effects on scion performance', Australian Citrus News, March, Adelaide.

Gleeson, S. 1992, 'Juice maker puts squeeze on its rivals', Weekly Times, 1 April, p. 16.

Horticultural Policy Council 1990, Annual Report 1989-90, AGPS, Canberra.

- 1991, The Impact of Fruit Flies on Australian Horticulture, HPC Industry Report no. 3, AGPS, Canberra.


p p p p p p p p p p p p p - - - - - -

Horticultural Research and Development Corporation 199 1, Annual Report 1990-91, AGPS, Canberra.

Industries Assistance Commission 1988, The Fresh Fruit and Fruit Products Industries, AGPS, Canberra.

1 Irish, R. 1992, The fruit juice industry: a proprietary view, Paper presented

I at the National Agricultural and Resources Outlook Conference, Canberra, I 4-6 February.

Mueller, W.F., Helmberger, P.G. and Paterson, T.W. 1987, The Sunkist Industry: A Study in Legal Economic Analysis, Lexington Books, Massachusetts.

Phillips, B. and Van Hilst, R. 1992, 'Citrus industry', in ABARE, Farm Surveys Report 1992, Canberra, pp. 3943.

Primary Industry Newsletter 1992, Primary Industry Newsletter, no. 1286, 30 March, Melbourne.

Proctor, W., Kelly, J. Phillips, B. Abdalla, A. and Mallawaarachchi, T. 1992, Future Directions for Horticulture, ABARE Research Report 92.4, Canberra.

Rabobank 1990, The World Fruit Market, Heijbroek, Netherlands.

Rae, A.N. 1988, 'Factors influencing the comparative export performance of the Australian and New Zealand Apple industries' in New Zealand Market Development Board, The Export Marketing Systems for Primry Products 1988, Wellington, pp. 73-9.

Simmons, P., Poulter, D. and Hall, N. 1991, Management of Irrigation Water in the Murray-Darling Basin, ABARE Discussion Paper 91.6, AGPS, Canberra.

Trade Practices Commission 1991, Draft Determination on Behalf of Winegrape Growers' Council of Australia Incorporated, Trade Practices Commission, Canberra.

US Department of Agriculture 1989, 'Chilean fruit and vegetable exports: grapes still no. 1 ', Horticultural Products Review, March, Washington DC.


- 1991a, Citrus Fruits 1991, Summary, Washington DC (and previous issues).

- 1991b, 'Updates', Horticultural Products Review, December, Washington DC.

- 1991c, 'USDA market development programs', Horticultural Products Review, August, Washington DC.

- 1992, Horticultural Products Review, March, Washington DC (and previous issues).

Ward, R.W. and Kilmer, R.L. 1989, The Citrus Industry: A Domestic and International Economic Perspective, Iowa State University Press, Ames.

Recent ABARE hortc*culture publications

Simmons, P., Poulter, D. and Hall, N. 1991, Management of Irrigation Water in the Murray-Darling Basin, ABARE Discussion Paper 91.6, AGPS, Canberra. $13

Proctor, W., Kelly, J., Phillips, B., Abdalla, A. and Mallawaarachchi, T. 1992, Future Directions for Horticulture, ABARE Research Report 92.4, Canberra.

(This report, ABARE Research Report 92.14, is priced at $15)

In September-October 1992 ABARE will be releasing a report on Projections of Wine Grape Production and Winery Intake to 1994-95 as a research report at a likely cost of $17.

To order publications, contact Denise Flamia on (06) 272 221 1 or write to: Publications Officer, B A R E , GPO Box 1563, Canberra 2601

50 ABARE research report 92 .I4

C I T R U S Can Australia learn from the methods used by horticultural producers overseas to compete on world markets?

Horticultural producers in Australia are now, more than ever, facing pressures to become more export oriented to remain viable. In this report, ABARE follows a case study approach - comparing the Australian and US citrus industries - to gain an insight into competing successfully on world horticultural markets.

ABARE RESEARCH REPORT 92.14

e ABARE

Documents

Corny Australian citrus industriesdata.daff.gov.au/.../rr92.14_us_aust_citrus.pdfFore word The citrus industry is one of the largest horticultural industries in Australia. As for many