By: Juan R. Anciso and Luis A. Ribera
Commercial citrus growers and homeowners often need to determine the value of their mature citrus trees. The objective is to determine the value of a mature grapefruit tree (Rio Red variety) and a mature orange tree (Valencia variety) to assess the value of a tree or an orchard.
Grapefruit and orange trees usually reach full maturity by year 7 with an estimated yield of 23 and 18 tons per acre, respectively (Table 1.) However, some production is expected from year 2 with yearly increments until they reach maturity.
The price per ton used in this study is the 5-year average (2008–2012) producers received for either grapefruit or Valencia oranges. The cost of production is separated into planting costs or establishment costs and annual production cost. Establishment cost is higher for oranges because there are more trees per acre, 189 trees compared to 140 trees per acre for grapefruit.
Calculate the total value per tree for year 1 by dividing the planting cost per acre by the number of trees per acre. For grapefruit, divide the $2,000 planting cost by 140 trees per acre for a value of $14.29 per tree.
To figure the total value per tree for years 2 to 6, add the value of a tree the previous year plus the potential gross revenue the new tree is bringing.
Finally, calculate the total value of mature trees (7 years and older) by adding the cumulative potential net revenue of a mature tree over 7 years, plus the planting cost minus the cumulative potential net revenue of a new tree, years 1 to 6.
Overall, citrus tree values vary from year 1 through 7. At year 7, citrus trees are fully mature due to their commercial production potential. Of course, the longevity or lifespan of a citrus tree depends on its care and whether it endures any type of cold injury and rehabilitation, but the estimated mature life span for citrus is 31 to 35 years. Then, productivity declines due to various factors even though citrus trees have been known to live well beyond 60 years. Therefore, mature grapefruit trees have a tree value of $57.41 from year 7 through year 35, while Valencia orange trees have a tree value of $52.70 from year 7 through year 31. These values are based on current fruit values and will change due to changes in prices and production costs, but this estimate gives growers and homeowners a reference value for their citrus trees.
Download a printer-friendly version of this publication: Texas Citrus Tree Values
View more Agricultural Business information
Do you have a question -or- need to contact an expert?