One of Florida’s largest citrus producers is calling it quits.
Fort Myers-based Alico will wind down its citrus operations, which have yet to recover from Hurricane Ian in 2022.
After another major blow from Hurricane Milton this season, and another disappointing harvest, due to storm damage and citrus greening disease, the public company has announced “a strategic transformation to become a diversified land company with each of its properties now expected to create profitable agricultural revenue opportunities that are not citrus-related, until the highest and best use for these acres can be realized.”
The company will not invest any more money into its citrus operations after the current crop is harvested this year.
As a result, Alico has let go most of its citrus production workforce “effective immediately.”
The decision could impact up to 172 jobs, by the end of season, said John Kiernan, the company’s CEO, in a phone interview.
“It’s a difficult day at Alico because of our employees being affected by this change in strategy,” he said.
But management felt the company had no other choice, squeezed out of the citrus business by circumstances it could not control.
“We just didn’t get the recovery this season we have been expecting,” Kiernan said. “So, this actually goes back to Ian in 2022.”
He added: “Ian was probably worse than anybody thought.”
John Kiernan
When Ian made landfall at the southern edge of Charlotte County as a Category 4 storm, on Sept. 28, 2022, its powerful winds knocked over citrus trees, and blew off a large amount of fruit that was not yet harvested across Florida’s citrus belt – including Southwest Florida.
Statewide the Florida Department of Agriculture and Consumer Services estimated the citrus crop and tree losses at $417 million to $675 million.
More than half of Alico’s crops fell to the ground before harvesting in the season that followed Ian.
Lower-than-expected production resulted in a write-down of $28.5 million for last year’s harvest, and another $19.5 million for this year’s harvest.
“We’ve explored all available options to restore our citrus operations to profitability, but the long-term production trend and the cost needed to combat citrus greening disease no longer supports our expectations for a recovery,” Kiernan said.
Greening isn’t harmful to humans, but it’s fatal to citrus trees. There isn’t a cure.
Alico owns more than 53,370 acres of land across eight Florida counties, with a significant amount of it dedicated to citrus production.
The company expects about 3,460 of its citrus acreage will be managed by outside caretakers for another season through 2026, which is only about 10% of what it’s harvesting now, Kiernan said.
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Otherwise, the land will be offered up for lease to other growers for alternate crops, who might fell the citrus trees, or work around them, he said.
Alico Inc., based in Fort Myers, has two divisions, citrus and land management.
For the foreseeable future, Kiernan said: “We would like to keep 75% of our acres in agriculture.”
That could include everything from sugarcane and watermelons to sod and corn.
Alico is pursuing residential and commercial development opportunities for the other 25% of its property.
The company is already in the entitlement process for citrus land in Collier and Highlands counties.
The land could pave the way for new villages or towns. Alico could become the master developer, partner with a master developer, or sell the land to others who want to build on it, Kiernan said.
About 10% of its acres are targeted for development within the next five years.
Asked whether he thought other Florida citrus growers could follow in Alico’s footsteps, and throw in the towel, given the unrelenting challenges faced by the industry, Kiernan said: “We certainly hope not, but unfortunately, we came to the decision that it was no longer economically viable for Alico to grow citrus in Florida.”
The company estimates the current value of its landholdings at $650 million to $750 million (with 75% of it valued for agricultural uses).
Previously: Fort Myers-based Alico sees profitable year, despite challenges
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Despite challenges, Alico had a profitable year in 2024. However, the improved performance, was mainly attributable to the sale of more than 18,000 acres of its land for about $86.2 million.
That included selling 17,229 acres of the Alico Ranch to the state for $77.6 million for conservation. While more sales like that one are possible, there is nothing formal on the table, Kiernan.
“We are still entertaining discussions with the state to sell parcels in different areas,” he said. “But nothing is completed yet.”
Since 2017, the company has sold 40,000 acres of its Alico Ranch to the state. In 1992, it donated the 760 acres of land used to establish Florida Gulf Coast University near south Fort Myers.
“Alico will remain a responsible corporate citizen and steward of both our land and communities, just as we have done for more than 125 years,” Kiernan said. “For decades, while maintaining its agriculture leadership, Alico has opportunistically sold land in Florida for responsible purposes that benefit both the local communities and our shareholders.”
The company has been growing citrus in Florida since the 1960s. It delivers most of its fruit to orange juice producers, including Tropicana.
In 2023-24 season, Alico harvested 3.1 million boxes of fruit.
With its change in strategy, the company saw its shares surge by more than 28% on Monday, as investors reacted positively to the news.
This article originally appeared on Fort Myers News-Press: Alico to stop its citrus operations, become a land company