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California’s orange groves are getting squeezed

Changing consumer tastes are putting the squeeze on valencia oranges, a traditional California farm staple.
/ Source: CNBC

They put the “O” in “The OC” and caused the water wars made infamous in Hollywood classics such as “Chinatown.”

Oranges have been the mother’s milk in the Golden State. But times are changing. When is the last time you actually peeled an orange? It’s a sticky business no longer bearing much fruit.

Farmer Jim Finch used to have 340 acres of valencia oranges in California’s Ventura County. Now he has less than a quarter of that.

“Lose money for four years in a row, and you decide it's not the thing to do,” says Finch.

“We've taken out trees that were 110 years old,” he adds.

“The acreage of valencia oranges has dropped by about 23,000 acres in the last five years,” says Dave Kranz of the California Farm Bureau.

The low-carb craze hurt, along with foreign competition. But while the orange juice business is hanging on in places like Florida and Brazil, changing tastes have had a major impact on fresh oranges — especially valencias.

Prices are up as demand is down. The most recent federal statistics show growers have been losing about $2 a box, and this year’s valencia crop is forecast to be down nearly 40 percent. Farmers are burning trees and replacing the crops.

Smaller tangerines — also known as clementines or mandarins — are gaining popularity. Acreage in California is up one-third in five years as the average American has gone from eating two pounds of tangerines a year to 2.6 pounds, a 30 percent increase.

“It's a nice sized fruit. It's easy to put it alone into a lunch for a child, easy to peel,” says Finch.

Some farmers are getting out of citrus all together. Finch is making more money on avocados than oranges now. But he hasn’t given up completely yet on a crop first planted by his grandfather.

“Are you going to make money on oranges this year?” I asked.

“This year, we’re hoping to,” he said.

“And if you don't?”

“If (we) don't, then what we're standing in front of won't be here next year,” he says, indicating the grove before him.

A lot of farmers in the Central Valley are burning orange trees and putting in almonds trees. Some navel oranges hold their own. But valencias are the ones taking a hit. Not for juice, mind you. But why make a mess peeling this when the peel comes right off a tangerine?