Should the citrus growers sell out to foreign owners? That's the question that's been bedeviling the industry for months and now an international expert has come to Belize to offer some advice. University of Florida agricultural economist Tom Spreen is one of the pre-eminent authorities on the money behind the global citrus industry. He yesterday made presentations to members of the committee of five investigating the sale of the citrus processing plants by the Citrus Growers Association to Blue Water Investments. Before leaving this morning he gave his opinion on the sale.
Tom Spreen,
"Prices are going to be very strong so you want to be a grower and a processor in this environment. The growers and the processors are both going to be making money in the environment that we are in right now."
Alfonso Noble,
So prices will be very strong over the next...
Tom Spreen,
"I think probably at least five and probably ten."
Alfonso Noble,
So the structuring of the citrus industry in Belize is as best as Belize can get?
Tom Spreen,
"This is as good as it has been since you have had a citrus industry in Belize because really, after the freezes in the '80s it was really when this industry evolved into an export oriented industry so there was a nice window of profitability in the latter part of the 1980s and the early part of the 1990s and then as Florida recovered, prices went down and then they got very low three years ago. I think what some people here don't appreciate is how hard the pendulum has swung from the very low prices of 2001, 2003, early 2004, to now this very strong price environment. As an economist it is just remarkable to me how the profitability of the industry has changed so dramatically."
Alfonso Noble,
Why would anybody want to sell under these conditions?
Tom Spreen,
"Well I think that the thinking is that some of these people lived through the last cycle, they feel that as a small country, in economics we have something we call the 'small country model,' where the amount of orange juice that Belize sells does not affect the world price of orange juice. And so there is an argument that instead of being subject to what the world market is doing for orange juice, they want to control their destiny more by integrating forward with a retail organization out of the Caribbean.
My argument would be that you are going to make good money both in the growth and plant. That might make more sense, at least for the foreseeable future. If you are going to sell out a share of the plant, you want to make sure you get a favorable price. So in other words, everything is for sale. This hotel behind me is for sale as long as someone wants to come in and offer the owners enough money. So I would never want to argue that you're never ever want to sell an asset but you want to make sure if you are going to sell an asset, or even insure the asset, that you get a favorable price for that asset and the pricing environment that we are in today."
The group was scheduled to report back to industry stakeholders at the end of this month.
