Limoneira leans on geographic diversity to fill lemon demand

Limoneira leans on geographic diversity to fill lemon demand

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Mother Nature’s unpredictable ways have increased the importance of having geographic diversity in sourcing lemons.

Harold Edwards, president and CEO of Santa Paula, Calif.-based Limoneira said the company — founded in 1893 and publicly traded since 2010 — has invested in both domestic and foreign capacity to be meet customers needs.

While lemon shipping point prices for Southern California and Arizona fruit have declined from well over $50 per carton in August to the mid-$30 level in early December, Edwards said having a diverse source of supplies will pay off again.

With a marketing tagline of “One World of Citrus,” Edwards said Limoneira serves customers in the U.S., Canada, Southeast Asia, Central and South America and all of Europe.

The company markets fruit from 15,000 acres in Arizona and California and recently invested in 3,000 acres of potential lemon ground in La Serena, Chile - 250 acres of that land is producing today.  Limoneira also has a co-packing relationship with a Mexican packer of lemons and limes, has a strategic alliance with Argentina citrus exporter FGF Trapani, and markets summer citrus from South Africa.

“What these relationships and these investments have allowed us to do under this “One World of Citrus” model is to go to each of our customers that we serve around the world and assure them we have a 365 days supply chain,” he said. 

Limoneira’s acquisition of Oxnard Lemon Company added about 1.5 million to 2 million cartons. For the fiscal year 2018, Limoneira expects to market about 3.3 million cartons of fresh lemons in California/Arizona, with 60% produced by Limoneira and 40% from outside growers. 

“Next year, thanks to the outside growers and the Oxnard acquisition, we should see that grow to 5.5 million cartons,” he said, noting that 60% will come from outside growers and 40% from Limoneira.

Over the next four years, Limoneira expects to see California production increase by a million cartons thanks to young plantings. Chilean production should increase by 600,000 cartons in that time frame.

Mexico will add another 1.5 million cartons, split equally between lemons and limes.

From Argentina, Limoneira sourced about 125,000 cartons this summer, about half of all imports from the country.

Market outlook

While lemon supply conditions may be slightly improved over the winter, Edwards said that Southern California supply in the summer of 2019 will likely be affected by the heat the region experienced this year.

“Because of some extreme weather that we experienced here on the California coast this past summer, we think the market will have increased opportunity for our southern hemisphere fruit complementing our California supply," Edwards said.

 "With the upcoming summer months supply fluctuation, we are confident our One World of Citrus supply model will show our customers that they can count on Limoneira to provide the highest quality of service 52 weeks a year.”