How heavy rains produced unusually large lemons and what it means for your grocery store
When life gives you over-sized lemons, make lots of lemonade.
That's what more consumers in Southern California may have to do after one of the state's largest lemon producers, Limoneira, faced an unusual problem with this year's yield.
The “excessive rains” last fall and winter were apparently sour news for the Santa Paula-based citrus producer.
The trees produced an abundance of larger lemons that created an oversupply in the market and lessened demand from grocery stores. As a result, carton prices were lower on average and packaging costs per carton increased, Limoneira explained in a press release on Wednesday.
The lemons sold for approximately $18 per carton, well below the company's normal pricing of closer to $30, according to CEO and President Harold Edwards.
"We had to turn approximately 50% of our fresh lemons into juice," he explained.
"This pressured pricing and resulted in a much higher percentage of fruit that was sold into the lemon juice market," Ben Bienvenu, an analyst at the citrus company's financial planning firm Stephens Inc., told ABC News. It also "created an imbalance between the price received by Limoneira for selling the fruit, and the cost it requires to pack the fruit."
The wholesale price of lemons in the U.S. per kilogram is $1.84, which is down 39% from last year, and the average production price is $784 per metric ton, according to global food market intelligence company Tridge.
Limoneira expects an operating loss for 2019 of approximately $500,000 to $3 million.
Edwards added that for fiscal 2020, "we are well-positioned for a return to solid growth and improved profitability" based on Limoneira's expected organic lemon growth and recent acquisitions.
The future of Limoneira is ripe for a rebound with an additional 1,200 acres of non-bearing lemons, which should become full bearing over the next four years and enable the company to achieve strong growth in years ahead.
Southern California citrus fans should embrace the over-sized citrus and save the juice for a rainy day.
Despite impact on the company, Limoneira was still able to look on the bright side for National Lemon Juice Day and shared a series of tweets with best use recipes.
Limoneira Co. did not immediately respond to ABC News' request for comment.
