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By Don Schrack

VISALIA, Calif. – The recession cut deeply into 2009 sales and, accordingly, profits for Sunkist Growers Inc., Sherman Oaks, Calif., but the outlook for 2010 is guardedly brighter, said Russ Hanlin, president and chief executive officer.

Hanlin

“The dramatic downturn in the global economy presented major challenges,” Hanlin told the cooperative’s 116th annual growers meeting. “Returns per acre were good, but varied by grower depending on fruit quality and size as well as the percentage of domestic and export shipments.”
 
Sunkist’s annual report, released at the meeting, showed gross revenues of $860.5 million, down from the $1.08 billion recorded in 2008. Payments to growers plummeted to $646.3 million, a 21.5% drop from the $823.5 million that went to growers in 2008.
 
Overall growers fared better than the cooperative, whose retained annual income in 2009 was $6.01 million, down nearly 33% from 2008, according to the annual report. 
 
It was a challenging and a rewarding first year as Sunkist president, Hanlin said.
 
Lemons were the variety hardest hit by the 2009 economy, he said, due in part to the largest negative restaurant growth in 40 years.
 
“Too many lemons chasing too few sales led to unprofitable prices through most of the (2009) winter,” Hanlin said.
 
Steps Sunkist took last spring have resulted in sustaining a price recovery for lemons that continues through winter 2010, he said.
 
Smaller volume found most Sunkist navel growers enjoying a good 2009 season, Hanlin said, and the immediate future is more positive. The 2010 navel season is off to an excellent start, he said, with f.o.b.s running above year ago prices.
 
The 2009 year was profitable for most Sunkist specialty citrus, and 2010 could be even better.
 
“Cara caras enjoyed high returns on a large crop (in 2009),” Hanlin said. “We expect to market more than 1 million cartons of cara caras for the first time this year.
 
Profits also were recorded in 2009 for Sunkist moros, minneolas, fairchilds, satsumas, clementines and murcotts.
 
Not all varieties will see better results in 2010. Even with a shorter crop in 2009, valencia supply exceeded demand for most of the season, Hanlin said.
 
“Though valencia acreage continues to be reduced, in normal-size crop years bringing supply and demand into balance will continue to be challenging,” Hanlin said.
 
The more than 100-year-old Sunkist name continued to be a revenue source through the cooperative’s global licensing efforts.
 
“There were 73 new Sunkist-branded products introduced in 2009, and we signed on a record nine new licensees, including two outside the food and beverage categories,” Hanlin said. “These accomplishments in the face of the worldwide economic downturn are a tangible reminder of the value of the Sunkist brand.”
 
While Sunkist anticipates 2010 will be financially brighter for the cooperative and its growers, the Asian citrus psyllid is a “serious threat to all of our livelihoods,” Hanlin said.
 
Sunkist is working with the entire citrus industry, he said, to secure aid to fight huanglongbing, the bacterial disease carried by psyllids, and to educate the public about the need to protect against the spread of the pest.
 
Yet another threat can be found in efforts to modify or repeal the Capper Volstead Act, the law that created the cooperative business structure, Hanlin said.
 
“A loss of our cooperative status would adversely affect your ability to compete with large public agricultural conglomerates both here and international,” he cautioned the growers.

Nick Bozick, president of Richard Bagdasarian Inc., Mecca, Calif., was elected to a fifth term as chairman of the Sunkist board of directors. Also re-elected at the cooperative’s 116th annual growers meeting were vice chairmen Craig Armstrong, Southern California Citrus Exchange, Palm Desert, Calif.; Gerald Denni, California Citrus Growers Exchange, Strathmore, Calif.; and James Finch, Saticoy Fruit Exchange, Ojai, Calif.

( Note on correction: In the original version of the story, the figure for retained annual income was incorrect in the fourth paragraph.)

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