Lemon growers should think long-term and begin developing export opportunities for their fruit, according to Queensland grower Michael McMahon, who spoke at the WA Citrus Industry Day last week.
Australia is seeing an increase in lemon plantings, including growth from growers entering the industry.
Michael, of Abbotsleigh Citrus, now part of the Nutrano Produce group, said that only 4% of Australian lemons are exported, and with 9% going into processing, 87% are sold onto the domestic market.
Nielsen Homescan Data shows that 50.6% of domestic shoppers buy lemons, spending on average $10.36 a year, down almost $2 compared to last year, and consuming 2kg of lemons a year.
“Unlike other products like mandarins and oranges, customers don’t buy volumes when they are on special,” he said.
“It’s inelastic demand. If they want two lemons, they’ll buy two lemons. The customer demand is pretty consistent regardless of price, so it is difficult to promote on price alone.”
As an example, Michael said lemon sales spike during Easter in line with fish sales, and spike again during Greek Easter. Promotion targeting these special occasions, as well as the health benefits of lemons, is critical.
Michael said Abbotsleigh Citrus has made a concerted effort to export more lemons in recent years and develop new markets.
This is to avoid the rising tide of Australian-grown lemons and to gain an advantage on exports from South Africa and South America, where production is growing rapidly.
The prices Abbotsleigh received in Indonesia for lemons recently was cheaper than the domestic market.
“We still made a profit but we’re thinking long-term and investing in development of export markets,” he said.
They see opportunities in China, Indonesia, Japan, Canada and the USA. Hong Kong and Singapore are easy markets for most countries to access, while Indonesia can be unreliable due to quotas.
Michael said growers exporting must be prepared to accept lower returns than have been realised in recent years. Doing nothing will see returns drop far lower due to oversupply on the domestic market. They must also grow and pack quality fruit ‘to stay in the game’.
He provided the following tips for those planning to export: * Develop a strong customer relationship * Use carnauba wax to enable fruit to breath * No or limited degreening * Bring fruit temperature down slowly
Michael also said continued research on on-farm processes to reduce chilling injury would be crucial to help Australian growers boost future exports.