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Orange Growers Fall Victim to Property Bust

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1 of 5 10/26/2010 9:46 PM
Orange Growers Fall Victim to Property Bust as Asian Citrus Psyllids Sp... http://online.wsj.com/article/SB10001424052702304248704575574472...

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By ADAM CANCRYN

Chip Litherland for The Wall Street Journal

An orange infected with yellow dragon disease, left, and a normal-size one, right, in Lake Wales, Fla.

As if the real-estate bust hadn't wreaked enough havoc on Florida, farmers say abandoned lots
left behind by would-be developers have become a breeding ground for a plague that is killing
thousands of the state's orange trees.

A type of tiny lice known as the Asian citrus psyllid has made its home in the orchards,
spreading a disease known as citrus greening, or yellow dragon disease, which causes trees
to produce shriveled, bitter oranges before killing them. Since being spotted in 2005, the
disease has spread to all parts of the state. And with no known cure, citrus greening is
threatening to cripple a $9 billion-a-year industry that supplies 90% of U.S. orange juice.
Most Popular in Markets
"It's been one uppercut after another," said
Negative TIPS a Positive Sign
Jackie Burns, interim director of the Citrus
Research Education Center in Lake Alfred, Dow Extends Gains to Nearly Six-Month High
Fla., which has studied the outbreak. She Orange Growers Fall Victim to Property Bust
said she has no doubt that "grove
Dollar Hits 15-Year Low Against Yen
abandonment" has helped spread the
Bond Market TIPS Toward Inflation
disease.

The U.S. Department of Agriculture says

View Full Image
millions of acres of crops have been Email Newsletters and Alerts
Michael Rogers/University of Florida
Asian citrus psyllid
devastated by the disease in the southern The latest news and analysis delivered to your in-box. Check the
U.S. boxes below to sign up.

Marty McKenna, a farmer in Polk County in the central part of the state, is battling the disease Markets Alert Deals Alert
in many of the 6,000 acres that he owns or manages. He has had to spend thousands of Heard on the Street Asian Markets
dollars on pesticides, which he said are only partly effective, to prevent the disease. Where he Price & Volume Alerts
European Markets
has failed, he has burned hundreds of infected trees and replanted.
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Mr. McKenna said he knows who is to blame: absentee landowners that have left the orange
groves for dead.
New! To sign up for Keyword To view or change all of your
or Symbol Alerts click here. email settings, visit the Email
"That's not a good situation for any type of agricultural production, to have a neighbor not Setup Center.
properly maintaining his area," Mr. McKenna said. "It's only a matter of time until it's in every
grove in the state."
Recent Columns
More than 138,000 citrus-growing acres lie abandoned across Florida. The impact has been
particularly acute in Polk County, which has the most citrus acreage, at more than 83,000. The Oil Cedes Ground but Still Ends Higher
county also was a favorite of developers because it is along Interstate 4 between Tampa and Gold Rises on Renewed Currency, Inflation Fears
Orlando. Investors Prepare for Sugar Highs
More than one in 10 acres of orange groves are abandoned in Polk County, according to the
USDA. Groves are considered abandoned when they haven't been maintained for two
consecutive seasons.

2 of 5 10/26/2010 9:46 PM
Orange Growers Fall Victim to Property Bust as Asian Citrus Psyllids Sp... http://online.wsj.com/article/SB10001424052702304248704575574472...

Little data exist on the statewide effects of the citrus disease, in part because growers don't
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keep close track of the number of trees and acreage affected by specific diseases. But the
Florida Department of Citrus predicts that citrus greening will cut Florida orange production by
5% to 6% a year until a cure is found or disease-resistant trees are bred and widely planted, Crude Oil (Nymex) Compare with:
which isn't likely any time soon. That translates into cutting orange production nearly in half
over the next decade.

The USDA predicted Florida orange production would total 146 million boxes in the 2010-2011
harvest, a far cry from the 242 million boxes in 2004. Some of that can be attributed to the
citrus greening disease.

Prices of frozen concentrated orange juice have jumped 34% in the past year, driven in part by
worries about the spreading of citrus greening, as well as damaging winter frosts. Orange juice 1yr
RANGE: 1dy 1wk 3mo 6mo 5yr Custom
for November delivery settled on Monday at $1.4925 a pound on the IntercontinentalExchange.
Retail prices have shot up as well, to a national average of $5.51 a gallon of orange juice from
$4.50 five years ago, according to Nielsen Co.
Video
The first symptoms of infected trees are blotchy spots on leaves and poor flowering. They then
produce fruit that is small and bitter. Eventually, the trees die. The only way to contain the
disease is to burn the infected trees and the surrounding area. The lice, which are no bigger
than the head of a pin, carry the disease for life.

"Those who came in buying good, quality citrus groves have quit caretaking them to the point
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where they're not salvageable," said Richard Dempsey, the president of the Lakeland Bubbles Singapore Style Yields Go Negative
3:00 1:09 for First Time
Association of Realtors. 1:54

Many developers have little farming

knowledge and no means of maintaining the More in Markets Main
agricultural land they bought, Mr. Dempsey Futures Weaken on Earnings
said. Their goal is typically to hold onto the
Oil Barely Budges
land until the market comes back, so they
can be the first to build. Warren Buffett Flags Successor
Gold Falls Back
Keeping the land also gives many absent
owners the advantage of generous tax Yen Warnings Boost Dollar
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breaks intended for farmers. Land labeled
Chip Litherland for The Wall Street Journal
for citrus use is assessed at about $2,200 an
TRYING TO FIGHT: Citrus grower Marty McKenna in Most Popular
one of his orange groves in Lake Wales, Fla. acre, compared with up to $20,000 or
$30,000 an acre without that classification, Read Emailed Video Commented Searches

said Marsha Faux, Polk County's property

appraiser. 1. Key Tax Breaks at Risk
The Florida Department of Agriculture's Division of Plant Industry is mapping the state's citrus 2. Opinion: Riley: The NAACP's Unhealthy Tea Party
groves to try to weed out developers taking a tax break for abandoned orchards. Obsession

3. The State of Jay-Z's Empire

But the process is slow, and the agency has
no authority to force owners to care for 4. Negative TIPS a Positive Sign
groves, said Mark Fagan, director of public
information. The department notifies local tax 5. Warren Buffett Flags Successor
appraisers when it finds evidence of
abandonment, but can't do much more, Mr. Most Read Articles Feed

Fagan said.

And just boosting tax revenue won't stop the

View Full Image
Latest Tweets Follow
spread of citrus greening, which continues to
Chip Litherland for The Wall Street Journal
eat into production and, as a result, grower's "Oil Barely Budges http://on.wsj.com/bB1m2v"
Groves of abandoned and dying orange trees along
St. Anne Shrine Road in Lake Wales, Fla., this month. profits. 12 hrs 14 min ago from WSJMarkets (WSJ Market News)

Disease isn't new to Florida's citrus industry. "Deal Journal: Kelley Blue Book Sold at Near-Mint Condition
http://bit.ly/atdX0p"
It still is dealing with outbreaks of canker, a bacterial disease detected 15 years ago that cuts
12 hrs 19 min ago from WSJDealJournal (Deal Journal)
trees' fruit production. In 2004, canker infected millions of trees after a string of hurricanes
sprinkled it throughout the state. Greening could cause even more damage, said Bob Norberg, "Gold Falls Back http://on.wsj.com/c2bWYI"
an economist and deputy executive director at the Florida Department of Citrus. 12 hrs 45 min ago from WSJMarkets (WSJ Market News)

The USDA has tried to confine greening to Florida, quarantining infected trees, banning the "Futures Slip Amid Slew of Earnings http://on.wsj.com
transport of live citrus plants across the state border and inspecting citrus fruit before it is /bxqun8"
shipped out of state. It even has a campaign—Save Our Citrus—designed to prevent the 1 hrs 16 min ago from WSJMarkets (WSJ Market News)
spread of the disease. And, the USDA is working with various agencies to find a cure,
"Resources Lead Europe's Markets Lower http://on.wsj.com
according to Greg Rosenthal, spokesman for the USDA's Animal and Plant Health Inspection /bXK5yQ"
Service. 2 hrs 42 min ago from WSJMarkets (WSJ Market News)
Copyright ©2010 Dow Jones & Company, Inc. All Rights Reserved
But the disease has already been detected in Louisiana, Georgia and South Carolina.

3 of 5 10/26/2010 9:46 PM
Orange Growers Fall Victim to Property Bust as Asian Citrus Psyllids Sp... http://online.wsj.com/article/SB10001424052702304248704575574472...

Louisiana so far has only had a few cases in

backyard trees, said Alan Vaughn, a county agent
for the Louisiana State University Agricultural
Center. Even though most of the surrounding
region is under quarantine, it is hard to stop people
from bringing fruit and trees across the border, he
said. Most people just don't know that it is illegal
and it is hard to prevent individuals bringing single
trees or leaves across the border, he said.
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"We do have the insect and we're forever watching Deal for Young Gitmo Detainee
it," Mr. Vaughn said. "Our plan is to remove as Travel Sites Oppose Google Deal
many insects as possible, but you can only do so
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much."
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For now, Mr. McKenna spends most of his days
spraying trees with pesticides meant to ward off More Headlines
lice. It is a routine he estimates costs an extra $600 an acre or more a year. "It's absolutely
the No. 1 threat, mainly because of the unknown. We don't know the end of this greening
story," Mr. McKenna said. "We're trying to figure out how to hang on until there's a scientific
breakthrough."

Write to Adam Cancryn at adam.cancryn@wsj.com

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