Rising costs and falling prices have apparently left many small farms at risk of closure
Citrus producers in the Argentine province of Entre Ríos are facing one of their most challenging seasons in recent memory. Rising costs, a fall in international juice concentrate prices and flagging domestic demand has put the future of many farms at risk.
Melania Zorzi, president of the Entre Ríos Citrus Federation, said the situation has been worsening since the end of the pandemic, during which citrus consumption benefited from a Covid bounce. “Our costs increased exponentially, and unfortunately, prices have been in complete decline,” Fecier.org.ar reported Zorzi as saying.
Zorzi noted the price paid to farmers for their fruit is not keeping pace with rising input costs. The contraction of fresh fruit export markets and the drop in international prices for concentrated juice have led to a greater amount of production being allocated to the domestic market, increasing supply in a scenario of lower demand.
“Citrus consumption in our country is suffering a significant decline because wages are all lagging behind,” she stated.
She noted that companies that manage to integrate different links in the production chain are the ones with the greatest chance of survival. Producers who also own packing facilities, their own transportation, or points of sale in different regions of the country are able to capture a larger share of the added value.
“Those who are left with only their small farms and sell their produce from the ground up are the ones in the most difficult situation and are the most vulnerable,” Zorzi warned.
The current economic situation leaves little room for investment and growth. According to Zorzi, for the activity to become profitable again, producers would need to receive between 250 and 300 pesos per kilo of fruit, well above the 80-100 pesos they are currently receiving.
Furthermore, she warned about another problem that has recently worsened: the extension of payment terms and the risk of defaults. “What has worsened most recently is the lengthening of payment terms, including non-payment,” she stated, pointing out that currently, payments are typically made between 60 and 90 days after delivery.
