(Bloomberg) -- Alico Inc., one of the biggest US orange growers and a supplier to Tropicana, will wind down its citrus division after disease and hurricanes have driven a decades-long decline in production.
The Florida-based company won’t invest further in its citrus operations after the current crop is harvested in 2025, and instead will transform into a diversified land company, Alico said in a Monday statement.
Shares of Alico were up as much as 29% on Monday, the most intraday in almost 16 years.
The shift comes as Florida’s citrus industry has struggled for decades from a devastating disease called greening, while hurricanes have brought continual damage to orange groves. Alico said its citrus production has declined more than 70% over the past 10 years.
“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 recovery,” Chief Executive Officer John Kiernan said on a call with investors.
Citrus greening has caused the state’s groves to shrink, prompting some producers to sell land to cover costs or stop growing altogether. Some of that acreage has been converted for housing as warm weather and lower taxes fueled Florida’s population.
Solutions to help fight greening have become more widely available but remain costly, and hurricanes have made it even more difficult to keep fruits on trees. After Hurricane Milton last fall, the US Department of Agriculture cut the state’s production forecast to just 12 million boxes in the current 2024-25 year, the fewest since 1930.
Hurricanes have intensified more quickly, a shift that scientists have linked to climate change. Milton struck in October just weeks after Hurricane Helene hit Florida’s west coast. And it came as orange growers were still recovering from Irma in 2017 and Ian in 2022.
Alico, which owns more than 50,000 acres in Florida, said it expects about 75% of its land to remain agricultural. The remainder has potential for commercial and residential real estate, and roughly 10% of Alico’s acres are targeted for development in the next five years.
The company will be reducing most of its citrus production workforce immediately, and about 3,460 citrus acres will be managed by third parties for another season through 2026 to supply Tropicana, its biggest customer, Kiernan said on the call with investors. Alico’s contract with Tropicana includes a provision to remove acreage from the agreement if that land is no longer economically viable, Kiernan said.
In June, Alico signed a three-year pact to supply Tropicana with the fruits grown on roughly 65% of its planted acres.
(Updates with share prices, context on hurricanes in eighth paragraph)
©2025 Bloomberg L.P.