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Sunkist Weathers Slowdown In Citrus Exports

February 25,2016-

orange packer 2016-02-25 at 8.01.47 AMCitrus farmers including Sunkist members had a phenomenal year in 2014. So it is not a big surprise that 2015 did not repeat as was reported by Sunkist Growers in its annual report released in recent days. The cooperative held its annual meeting February 17 in Valencia announcing its 6th straight billion dollar revenue year despite a drop in both domestic and export citrus sales.

Total revenues reached $1.15 billion in 2015 after a record $1.23 billion in 2014 .The big hit was in export sales that declined to $242 million from $305 million the year before – about a 20% drop-off. Domestic sales fell to $712 million from $739 million in 2014.

A closer look at the numbers show domestic carton sales of navels was up 11% while prices dropped 15%.  On the export front navel carton volume was down 11% and FOBs also declined 13%.

Sunkist farmers received an average of $20.47 per carton of navels on exports in 2014.But that dropped to $17.78 FOB in 2015.Domestics FOBs were $15.64 in 2015 – the reason why exports are so attractive.

Sales of cartons of valencies fell 23% in 2015 while tangerine carton sales were up 4% – but FOBs declined 14%.

A big drop in exports in 2015 was the result of compounding negative factors including the port strike in early 2015 followed by a ban by China impacting all citrus shipments from Tulare County that lasted for six months. The ban was due to a find of brown fungus in some shipments.

Tulare County accounts for about half of all citrus exports in the state and is the home to many top Sunkist growers and leaders.

Despite the tougher timers there was some good news to report.For the first time in Sunkist’s history, the organization has issued grower payments of over a billion dollars for the second consecutive year.

“Sunkist has made many advancements to keep the cooperative well-positioned in the current business environment and last year’s results demonstrate the positive impact of those improvements,” Sunkist President and Chief Executive Officer Russell Hanlin said in a statement.

Notable changes in the past few years include the implementation of the cooperative’s grower distribution program.

“We made our third distribution to growers in 2015, and are committed to increasing these distributions annually,” Hanlin added. “This program was accomplished through an effective cost-containment plan and revenues from our for-profit businesses.”

Sunkist’s juice processing joint venture with Ventura Coastal (in Tipton) has yielded positive results for the organization. Now in its fourth year, the business partnership continues to generate improved by-product earnings, more timely payments and greatly contributes to grower distributions. Sunkist’s robust licensing program and global sourcing business is also advancing. With 49 licensees in total, the Sunkist brand is used to market approximately 700 products in 77 countries.

“All of these businesses continue to contribute to positive revenue streams and also help strategically position Sunkist for future growth,” said Hanlin.

Looking ahead Sunkist’s report says “No season is without its challenges, and the enduring drought, anticipated storms from the upcoming El Niño, and serious pest and disease risks are formidable threats to our industry in this upcoming year and beyond. In coordination with government and industry groups, Sunkist’s Board and management remain dedicated to finding solutions to overcome these issues and continue our legacy as the leading brand for California and Arizona fresh citrus.”

New Chair From Strathmore

As his term as chairman of Sunkist’s board of directors comes to a close, the contributions of Mark Gillette, president of Sunkist-affiliated Gillette Citrus Inc. of Dinuba, CA, was recognized during the meeting. Gillette served as chairman for five consecutive terms, the maximum time allowed under Sunkist by-laws.

Gerald Denni, general manager of Golden Valley Citrus Inc. in Strathmore, CA, and co-owner of Mittman-Denni Citrus Management, was elected to his first term as chairman following the meeting.
“We are excited about the fact we have eight new members on the board -younger growers who are taking a leading roll” Denni says.

Asked about co-ops growing acreage of organic citrus Denni notes growing navel oranges organically is not an easy task.”Sunkist was one of the first to grow organic oranges” he says,adding that organic citrus is now found in a wide number of supermarkets, “not just at Whole Foods.” Denni’s Stathmore ranch has 750 acres of organic citrus.

Another significant event for the cooperative was Sunkist’s headquarters relocation to Valencia, CA, in 2014, which strengthened Sunkist’s financial position and also geographically centralized its business operations to the cooperative’s grower base.

“The positive changes and growth we have achieved in recent years have been accomplished with the leadership and dedication of Sunkist’s board of directors, chaired for the past five years by Mark Gillette,” Hanlin said. “His commitment and leadership has been instrumental to our organization, and we are thankful for his valuable contributions to Sunkist.”

Elected by the board to vice chairmanships for 2016-17 were Mark Gillette of Dinuba, CA (District 1), James Finch of Ojai, CA (District 2) and Nicholas Bozick of Mecca, CA (District 3).

The meeting welcomed this year’s incoming directors, including Norman Evans of Terra Bella, CA, Amy Fukutomi of Oxnard, CA, Jim Layes of Riverside, CA, Tony Lombardi of Terra Bella, CA, Randy Vogt of Visalia, CA, and Scott Wiley of Terra Bella, CA. Also joining the board were Steve Cutting of Manhattan Beach, CA, and Robert Grether of Somis, CA, who have previously served on the board.

Enduring members of the 2016-17 board include Craig Armstrong of Thermal, CA, Ron Arnott of Mentone, CA, Allen Camp of Ventura, CA, Donald Dames of Oxnard, CA, Burt Fugate of Santa Maria, CA, Curt Holmes of Fresno, CA, Gary Laux of Porterville, CA, Brad Leichtfuss of Fillmore, CA, Robert Linderman of Visalia, CA, Warren Lyall of Pauma Valley, CA, Samuel Mayhew of Oxnard, CA, Eric Meling of Ivanhoe, CA, Cecilia Perry of Yuma, AZ, Kevin Riddle of Orosi, CA, and Kevin Severns of Orange Cove, CA.

Sunkist also honored the service of outgoing Directors John Kalender of Woodlake, CA, Russell Katayama of Orosi, CA, John Matthiessen of Visalia, CA, Martin Mittman of Porterville, CA, Thomas Mazzetti of Riverside, CA, Richard Pidduck of Santa Paula, CA, and Randy Veeh of Visalia, CA.

Caption: Strathmore Sunkist packing house

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