Growing Citrus
before you start
Noel Vock, Dan Smith, Garry Fullelove, DPI's Agency for Food
and Fibre Sciences, Horticulture
This information has been extracted from the Agrilink Citrus Information Kit and the Agrilink Citrus Information Kit Annual Update 1998, which provide information on all aspects of growing and marketing citrus in Queensland.
Introduction
This is a checklist of the essential things you need to know before you start growing citrus. It will help you make the right decisions. We provide more detail on important areas in the Agrilink Citrus Information Kit.
An overview of the Queensland citrus industry
Queensland grows about 3500 ha of citrus. The main production areas are Mundubbera and Gayndah in the Central Burnett, Emerald, Bundaberg, Maryborough and the Sunshine Coast. Minor producing areas include Gatton, Howard, Byfield, Charters Towers, Cardwell, Kuranda, Mareeba, Tiaro and Koah.
Mandarins and oranges are the main citrus fruit grown with smaller areas of lemons, grapefruit and limes. Most fruit is grown for the fresh fruit market but a percentage of the orange crop is used for juice production. Citrus are grown in orchards from grafted or budded nursery stock.
Fruit is harvested from about January to October with the bulk of the crop from March to July. Most of the fresh fruit production is marketed in the major metropolitan wholesale markets of Brisbane, Sydney and Melbourne but a large and increasing amount of the mandarin and orange crop is being exported.
Know what you are getting into
New growers are being attracted to citrus by the perception of goodreturns from buoyant prices on the domestic market. This is particularly so for mandarins. The crop is also seen to be a staple, well known fruit with a stable industry and established infrastructure. Bigger investors also see excellent export potential, particularly in Asia. However, there are several problems for new growers. These are:
- Current large plantings, particularly of Imperial and Murcott mandarins, will result in a large increase in production with potentially much lower prices on the domestic market.
- Some people believe that export opportunities provide a safe future but this needs to be put in context. Many export markets are still largely untested, making future prices and returns uncertain. There will also be significant competition from other citrus producing countries such as India, South Africa and Argentina. Lack of organised marketing in Australia continues to be a problem in better exploiting export markets. Unless you are prepared to become part of a cooperative marketing venture, you will need to be large enough to effectively develop the required export marketing infrastructure. This requires a major capital investment.
- Citrus is a highly demanding crop requiring year-round attention. Mandarins, in particular, have intensive management requirements including complex thinning and quality management procedures. Citrus is therefore a high risk crop as success will depend greatly on your ability to come to grips with these intensive management needs. This is exacerbated by frequent hail and drought damage to crops.
- For viable production, citrus demands an exacting soil type and climate as well as an assured water supply. Drier inland areas with well drained soils and adequate water of good quality are preferred, particularly for mandarins. Many coastal areas of Queensland are unsuitable for the production of export quality fruit. A ready access to labour for harvesting is also required.
- The citrus market is becoming more quality conscious and will demand fruit of exacting standards. High prices in the future will depend on your ability to meet these standards. You will need to be prepared to embrace the philosophy of quality management and quickly gain the expertise to implement quality systems on your farm.
Before embarking on a citrus investment, take time to research the subject thoroughly. Examine what domestic and export markets will be targeted, and where the competition is likely to come from when your trees are at their peak in ten years or so. Thoroughly check market price and throughput information for the major markets that you intend to target. Be cautious about extravagant claims of economic performance and do a thorough business plan.
What you can expect to make
Yields
Yields need to be considered in conjunction with tree density. In an orchard of normal density, tree spacing would be 7.3 m between rows and 3.5 to 5 m between trees. In this orchard, average yields would range from about 9 kg (half a citrus carton) per tree in the third year to about 150 to 180 kg (8 to 10 citrus cartons) for a mature tree in the tenth year. Using these figures, a mature orchard should be expected to produce 2500 to 3000 citrus cartons per hectare per year.
Higher, early yields per hectare can be obtained with high density planting. This is now a well established practice and is recommended for new plantings. High density orchards are normally based on the same 7.3 m row spacing (sometimes less for some mandarins) but use double the density of trees within the rows. This effectively doubles the early yields per tree up to about the sixth year and makes much better use of available land. However, close planting requires a higher level of management with more regular pruning and possible tree removal. Mature orchards yield about 2500 to 3000 citrus cartons per hectare per year, the same as normal density tree spacing.
Prices
Prices vary according to the varieties grown. Navel oranges range in price from about $10 to $30 per 18 kg citrus carton, with the higher prices being received for the limited supplies of early fruit. Seasonal average prices are about $12 to $15 per citrus carton.
Valencia oranges range in price from about $7 to $12 per citrus carton, with a seasonal average of about $10.
Mandarins are marketed in two pack types. Early season varieties such as Imperial are almost all marketed in half citrus cartons (9 kg) while mid and late season varieties such as Hickson, Ellendale and Murcott are almost all marketed in standard citrus cartons (18 kg). Imperial mandarins generally range in price from about $10 to $25 per half carton but good quality fruit at the start of the season may fetch double this.
Lemon prices generally range from $10 to $15 per citrus carton for the main part of the season, but again may double for early season fruit.
Grapefruit prices generally average $8 to $12 per citrus carton, with slightly higher prices of up to $15 for early season fruit.
Prices for limes are variable within a range of $5 to $10 per tray or small carton but may reach $30 to $40 for limited supplies of fruit in spring and early summer.
NOTE: Prices generally for citrus have fallen substantially over the last year or so. As an indicator, prices and throughputs for the 1997 and 1998 seasons for Imperial mandarins and Washington Navel oranges in the Brisbane market are shown in Figures 1 to 4. For comparison, the three-year average for 1994 to 1996 is also graphed. (Data to compile the figures courtesy of Market Information Services, Brisbane.)
Figure 1.
Average monthly price for Imperial mandarins at the
Brisbane market 1994 to
1998
Figure 2.
Average monthly price for Washington Navel oranges at the
Brisbane market
1994 to 1998
Figure 3.
Average monthly throughput of mandarins at the
Brisbane market 1994 to
1998
Figure 4.
Average monthly throughput of oranges at the
Brisbane market 1994 to
1998
Prices for export fruit are generally higher than prices for domestic fruit but the extent depends on variety, quality, market destination and competition from other citrus exporting countries.
Production costs
Production costs range from about $1200 per hectare per year in the first year to about $18 000 to $20 000 per hectare per year at maturity in the tenth year. These include all growing costs (watering, fertilising, pest control, weed control, pruning) and marketing costs such as harvesting, packing and transport. Costs for high density orchards can be higher because of the need for extra pruning and fruit thinning.
Gross margin and cash flow
No significant income is received until the third year. Annual income from sale of fruit then quickly exceeds annual production costs to reach a gross margin (proceeds from sale of fruit less production costs) in a mature orchard after the tenth year of $17 000 to $20 000 per hectare. These figures are based on an orchard of about 20 ha with average yields and prices and operating in a good season.
When capital costs and fixed or overhead costs (permanent labour, rates, insurance, repairs and depreciation) are also considered, total expenses are greater than income each year until about the sixth to seventh year. Accumulated expenses can be expected to exceed accumulated income until about the twelfth to fifteenth year.
NOTE: Current lower prices than that used in the initial economic analysis will reduce the gross margin as well as extend the payback period. We recommend that new growers, as part of their business plan, recalculate the gross margin and cash flow using the prices shown in the updated graphs. (There are more graphs in the Agrilink kit.)
The capital you need
If you want to be viable as an individual exporter, you will need a minimum of 50 ha of mature bearing trees. This will ensure sufficiently large lines of uniform quality fruit to interest exporters in the long term. To allow for expansion and the planting of replacement blocks throughout the life of the orchard, and knowing that not all the soil on a farm will be suitable for citrus, more than 50 ha should be bought. Also allow for a buffer zone between the orchard and neighbouring properties. This zone is necessary to minimise the risk of complaints from neighbours about essential horticultural activities.
Good citrus land with adequate water may cost up to $6000 per hectare. Buffer areas around it could be of lower quality land and may be as little as $400 per hectare. Based on a 50 ha orchard, a minimum of $400 000 should be allowed for the purchase of land.
Smaller farms may be viable but are more suitable for producing fruit for the domestic market unless you become involved in a marketing cooperative. A farm of 18 to 20 ha is considered the minimum size for a viable family operation where citrus is the sole source of income.
Excluding the cost of the land and housing, at least another $400 000 would be needed to set up the small family operation of about 18 to 20 ha of trees. This covers the cost of machinery and equipment, fencing, an irrigation system and tree establishment. The 18 to 20 ha should be made up of several different varieties to spread harvesting and cash flow over six months of the year.
A further $500 000 would be needed by the fourth year to have equipment and buildings in place for the start of harvesting and postharvest operations. This covers the costs of harvesting equipment, a packing shed, trailers and bins, a cold room/degreening room, workers' accommodation and a large orchard sprayer.
Buying second-hand equipment or joining a cooperative that has its own packing shed may reduce capital costs.
The farm you need
Soil
Citrus trees require a minimum of 60 cm of well-drained topsoil; a depth of 1 m is preferable. Use an auger to check that there is no barrier to drainage within 1.5 m of the surface.
Loams and sandy loams are preferred. Very sandy soils require expert management as they have a low water-holding capacity and nutrients are readily leached. Wetter clay soils can cause collar and root rot and the risk of tree death. A soil pH between 6.0 and 6.5 is required. Avoid soils with a natural pH above 8.
Slope
Slopes of up to 15% are suitable provided the farm is designed to minimise soil erosion. Steeper slopes present a major erosion risk and make it difficult to operate machinery safely. Avoid these wherever possible.
Climate
Citrus will tolerate high temperatures provided the trees are well supplied with soil moisture. Trees are sensitive to frost, but this varies with variety, tree age and health.
A young tree or a tree with a recent growth flush will be damaged by even very light frosts. A mature tree that has hardened off may tolerate temperatures down to -5°C for a short time without being seriously affected. Leaf, branch and fruit damage can occur. Trees under any stress, such as trees with a crop, will suffer greater damage. When frost causes fruit drop before harvest, some fruit left on the tree may be damaged internally, but show no external symptoms.
Lemons (except the Meyer) are more sensitive to frost than oranges. Mandarins vary widely in their frost tolerance. In general, citrus is not recommended in areas where there are heavy regular frosts.
Some orchardists in frost-prone areas use wind machines to prevent frost damage. These expensive machines are reserved for high value mandarins (Murcott) or export oranges (Late Valencia) which carry crops through the winter.
Exposed, windy sites should be avoided because of the risk of wind scarring of the fruit rind, which causes the fruit to be downgraded. Properly designed windbreaks are essential.
Drier coastal or inland areas are preferred for citrus to reduce the risk of pest and disease problems.
Water
Irrigation is essential for regular cropping. In areas where rainfall is below 700 mm per year, 1 ha of mature trees will need 8 to 9 megalitres of irrigation (1 megalitre (ML) = 1 million litres). Citrus trees are highly sensitive to salt. Avoid waters with an electrical conductivity above 1800 microSiemens per centimetre (µ/cm) or a chloride level above 450 parts per million.
The machinery you need
Major items required in the first year:
| machinery shed | pruning equipment |
| tractor | workshop and tools |
| fencing | truck with water tank and pump |
| irrigation system (under-tree sprinkler or trickle) |
cultivation equipment |
| air blast sprayer | fertiliser spreader |
| weed control sprayer | utility |
| trailer | motor bike |
| slasher | chemical storage shed |
By the fourth year, additional spraying, pruning, harvesting, and packing equipment will be required:
| packing shed (42 m x 15 m x 5 m) | fork-lift |
| degreening room/cold room | cherry pickers or ladders |
| grading and packing equipment | picking bags and clippers |
| bulk bins and bin trailers | generator for emergency power |
| second-hand tractors to haul the trailers | workers accommodation |
| oscillating boom sprayer |
High density orchards will also require specialised pruning and trimming machinery and a mulcher to mulch prunings. Use of contract pruning services is an alternative.
Small orchards can reduce capital costs by becoming part of a packing cooperative and by using second-hand machinery.
The labour you need
Major operations up to the fourth year include irrigating, fertilising, pest and disease and weed control. Two permanent staff can work an 18 to 20 ha orchard. From the fifth year onwards, extra staff will be needed from March to September. Ten workers will be needed for pruning, fruit thinning and harvesting and eight for packing shed operations.
Other considerations
Citrus production and marketing technology is changing rapidly and it will help if you are prepared to experiment with new ideas. An integrated crop management approach is recommended. This requires a willingness to employ specialised consultants for pest monitoring and water management. Mandarins, particularly high density plantings, require exceptionally high levels of management.
The citrus crop is very labour-intensive and you will need skills in labour management and the ability to train staff.
Knowledge of marketing and a commitment to quality throughout your entire production and marketing system are becoming essential if you wish to maximise your returns. Regular communication with people in the market chain, as well as other growers, is an integral part of this process.
To be successful, the orchard must be run as a business. This is a complex operation requiring many skills such as the ability to:
- interpret information supplied by pest management and irrigation consultants
- interpret results of leaf tissue and soil analyses and correctly apply the recommended fertilisers
- promote and develop markets for your own product
- seek and arrange export markets, shipping and insurance contracts.
With the explosion in information availability via the Internet, access to the Internet and skill in using it are becoming important additional required skills for the grower. For example, the Internet can now be used to access technical information on citrus, overseas research findings, and marketing intelligence.
Overview of the 1998 season
The 1998 season was notable for a huge increase in the volume of fruit supplied to the Australian domestic market. This was due to :
- Increased production from young trees coming into bearing. For example, it is estimated that production of Imperial mandarins increased from 1.3 million cartons to 1.9 million cartons. The full extent of increased production is yet to be felt as it is estimated that over half of the current plantings of Murcott mandarins are still under six years old.
- The Asian economic downturn that significantly reduced the demand in major Asian export markets. This meant that considerable quantities of fruit, originally destined for export, were directed to domestic market outlets instead.
An example of the increase in volume can be gauged from figures that show throughput of mandarins in the Brisbane wholesale market for 1998 was up to 15% higher than throughput for 1997 and up to 25% higher than 1996 figures. Importantly, throughput in 1998 during the peak early supply months of April and May was up to 50% higher than 1997. Similar increases in volume were recorded in the Sydney wholesale market.
This placed further pressure on prices, with average prices being reduced by up to 50% compared to the average price over the three years from 1995 to 1997.
This currently makes citrus growing a dubious business proposition for new growers unless reliable niche markets are researched and developed. This takes considerable time and money as well as commitment. The only other option is to take an optimistic outlook that the global economy will be much improved in five years when production from a new farm is coming on line. The one bright spot is that advances in disinfestation technology may well open up new export marketing opportunities over the next five or so years.
Whatever your view, the current state of the industry makes the need for a thorough business plan more essential than ever for new growers.
The other issue that prospective growers need to be aware of is the growing importance of food safety issues in the marketplace. All of the large retailers are now moving towards purchasing produce only from suppliers that can guarantee food safety under a Hazard Analysis and Critical Control Point (HACCP) based quality management system. This means that, at the very least, growers will need to qualify as approved suppliers to supermarket produce suppliers. Prospective growers should therefore factor in to their analysis the extra costs of these quality management procedures.
Further information
The complete Agrilink Citrus Information Kit - RRP $95 + $9.50 GST (Total $104.50), produced by the Agrilink Information Unit of the DPI, provides information on all aspects of growing and marketing citrus in Queensland. It is available from the Agrilink office (phone 1800 677 640) or the DPIShop On-line.
The kit includes the following sections:
- Before you start
A checklist of things you need to know before you start growing the crop. - Common questions
The twenty or so most commonly asked questions about growing the crop. - Growing the crop
Our guide for establishing, producing and marketing the crop. - Key issues
Detailed information on the key decisions affecting the crop. - Problem solver
A picture series of the common problems and how to solve them. - Contacts and references
A list of industry organisations, product suppliers, and further reading. - Index
An A to Z index to help you find information quickly. - Your information
A place to store your special information.
For enquiries on citrus, contact:
- DPI Business Information Centre on 13 25 23 - local call 8 am to 6 pm Monday to Friday (non-Queensland residents phone 07 3404 6999). E-mail: callweb@dpi.qld.gov.au
Information contained in this publication is provided as general advice only. For application to specific circumstances, professional advice should be sought. The Department of Primary Industries Queensland has taken all reasonable steps to ensure the information in this publication is accurate at the time of publication. Readers should ensure that they make appropriate inquiries to determine whether new information is available on the particular subject matter.
File No: H0026
Last updated 04 February 2004