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Squeezed Into Oblivion?

Oranges have long been Florida's signature, but the low-carb craze and competition from Brazil have soured growers' expectations.

May 14, 2004|John-Thor Dahlburg | Times Staff Writer

LAKE PLACID, Fla. — The rotund, early ripening Hamlins and the yellowish, elongated Pineapples have all been picked. Soon it will be the Valencias' turn, and Mason G. Smoak plucks one of the smooth-skinned fruit from the tree and opens it with a serrated knife to see if it's ready.

The orange, which gleams in the morning sun, is gorged with juice, and droplets explode into the air as Smoak cuts into the rind. He tastes the fruit's flesh the way a French peasant from Perigord might savor a truffle, and nods with satisfaction.

"We'll have to take it in and test it for sugar and acid content," he says. "But we'll probably harvest in the next three weeks."

For three generations, the Smoak family has been growing oranges on the sandy ridge that runs through Central Florida like a gently undulating carpet, ever since the family patriarch, a barber, bought his first grove during the Great Depression. The Smoaks now have 3,000 acres of trees, 30 full-time employees and an annual orange crop large enough to produce 8 million gallons of juice. It reaches consumers in several forms: frozen concentrate, juice reconstituted from concentrate, juice "not from concentrate" or juice in cans.

"We'd prefer if people started bathing in it," joked Edward L. Smoak Sr., Mason's father.

Unfortunately for the Smoaks, and for a business so synonymous with Florida that license plates feature ripe oranges and a sprig of orange blossom, Americans these days are drinking much less orange juice. With best-selling regimens like the Atkins and South Beach diets advising people to avoid carbohydrate-laden orange juice if they want to shed weight, annual per capita consumption has fallen from nearly six gallons in the late 1990s to below five gallons.

What's more, although most Americans may assume orange juice is from Florida, Brazil has become the global superpower of the industry, dominating markets outside the United States and even threatening Florida growers on their home turf.

Many industry figures think only a surcharge slapped on imported juice, which dates to the Smoot-Hawley Tariff Act of 1930, stands between Florida's most celebrated consumer product and oblivion. And the tariff could conceivably be revoked in the interest of freer trade throughout the Western Hemisphere.

"Now the concern, especially among medium- and small-size growers, is, is there a future in it for me?" said Raymond D. Royce, executive director of the Highlands County Citrus Growers Assn., which represents growers in this rural area northwest of Lake Okeechobee where the Smoaks have their groves.

Already there is a glut, with enough juice and concentrate in storage to supply the United States for half a year. Tanks holding as much as 1 million gallons apiece of thick, frosty concentrate dot the Florida countryside, giant Slurpees waiting for demand to perk up.

And in this saturated market, in which growers are getting an average of 72 cents per gallon of juice produced, 24 cents less than last year, another high tide of product is on the way. From the ranks of orange trees that march down Florida's interior from south of Orlando to the fringes of the Everglades near Immokalee, the U.S. Department of Agriculture is forecasting a record crop this season.

To improve their chances of economic survival, some growers, including the Smoaks, have expanded into other crops, from livestock to ornamental shrubbery. Others have sold off tracts for conversion into shopping centers or homes. Small growers, who could make good money a generation ago on 50 or 100 acres, have been hit especially hard.

"If there is any kind of debt connected with a grove, there's difficulty," said Steve West, an insurance agent whose Orlando firm has been issuing property and casualty policies to growers since 1917.

Over the last five years, West said, insurance companies have foreclosed on some mortgages they held on groves.

"When there is a short crop in Florida, the price should go up, but Brazil now can bring in its product and cover the deficit," West said. "So the growers have difficulty meeting their loan payments due to the low price of the fruit, escalating costs such as for chemicals used in the groves, and the costs of maintaining workers."

Nearly all of Florida's crop is turned into orange juice. The state accounts for 97% of U.S. orange juice production, and this season's harvest, which ends early next month, should yield 1.5 billion gallons of juice. When oranges from California, Texas and Arizona are added, this year's domestic output of orange juice should exceed demand by 112.5 million gallons, said Robert E. Barber Jr., director of economics for Florida Citrus Mutual, an industry association.

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