Alico Inc. Ceases Citrus Operations Amid Ongoing Challenges

News Summary

Alico Inc., a major citrus grower in Fort Myers, has announced it will halt its citrus operations due to the impact of citrus greening disease and hurricanes. This decision follows a significant decline in production and will result in job cuts for 172 employees. Despite shutting down citrus operations, Alico plans to maintain most of its land for agricultural use and explore other development opportunities. The broader citrus industry in Florida continues to face challenges as production reaches historic lows.

Fort Myers Citrus Grower Alico Inc. Shuts Down Operations Due to Ongoing Challenges

In a bittersweet turn of events, Fort Myers, Florida, is witnessing the end of an era as Alico Inc., a major player in the citrus industry, has announced that it is ceasing its citrus operations. The decision comes after years of battling the crippling effects of citrus greening disease and devastating damage caused by hurricanes that have rolled through Florida.

Struggles in Citrus Production

Once a thriving beacon of citrus production, Alico has seen a dramatic 73% decline in production over the last decade. Despite pouring significant funds into improvements such as investing in land, trees, and various treatments to combat diseases, the challenges have taken their toll. As it stands, the current harvest is shaping up to be even more disappointing than last season, leaving many to ponder the future of citrus in Florida.

The Impact of Mother Nature

Turning to the weather, it’s hard to ignore the impact that hurricanes have had on Alico’s operations. Hurricanes like Irma, which struck in 2017, Iain in 2022, and most recently Milton, have all wreaked havoc on the citrus trees that the company relies upon. With these storms causing extensive damage, Alico’s leaders have determined that it’s no longer financially viable to keep the citrus side of the business afloat.

Declining Citrus Production in Florida

In a broader sense, Florida’s citrus industry is facing a daunting future. It produced an astounding 244 million boxes of oranges during the 1997-1998 season, but that number has plummeted to a mere 17.96 million boxes in the 2023-2024 season. The continuous battering from hurricanes has resulted in projections that suggest even more declines, with expectations of reaching just 12 million boxes this season post-Hurricane Milton.

Job Reductions Ahead

As Alico winds down its citrus operations, the company will also unfortunately be reducing its workforce by an estimated 172 employees. This includes 135 immediate job losses, with an additional 37 positions expected to be cut by April 1. The employees affected by this decision face uncertainty as they look for new opportunities in the job market.

The Future of Alico’s Land

Alico doesn’t plan to abandon its agricultural roots entirely. The company will maintain approximately 75% of its land for agriculture use and aims to develop around 10% of the land within the next five years for other purposes. The nearly 3,460 acres of citrus land will be handled by other operators until 2026, allowing for some continuation of agricultural practices.

Transitioning Beyond Citrus

Additionally, Alico has notified its partner, the juice maker Tropicana, about ceasing production on contracted groves, and arrangements are expected to be put in place to relieve purchase obligations after the 2024-2025 crop year. With a total of 53,371 acres spread across eight counties, Alico also holds rights to minerals, oil, and gas on approximately 48,700 acres.

Looking Ahead

In light of these changes, Alico has ambitious plans to diversify its farming operations while exploring opportunities for residential and commercial development of its land. Investors responded positively to these strategic updates, with shares of the company surging over 28% following the announcement.

The Bigger Picture

The citrus industry in Florida has a challenging path ahead, particularly due to the ongoing struggles with hurricane damage, disease, and shifting agricultural conditions. This hurdles come just as data from the USDA has indicated that the citrus crop in Florida has reached its lowest level in over a century.

Hope on the Horizon

While the road ahead may look bleak, there’s a glimmer of hope as research targeting citrus greening continues to progress, potentially providing some much-needed relief for the struggling industry. For now, Fort Myers and the larger Florida citrus community hold their breaths as changes unfold at Alico Inc.