Alico, Inc., together with its subsidiaries, operates as an agribusiness and land management company.
The company owns approximately 53,371 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, and Polk), and approximately 48,700 acres of oil, gas and mineral rights throughout Florida. The company holds these oil, gas and mineral rights on substantially all its owned acres, with additional mineral rights on other leased acres. The company’s prin...
Alico, Inc., together with its subsidiaries, operates as an agribusiness and land management company.
The company owns approximately 53,371 acres of land in eight Florida counties (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, and Polk), and approximately 48,700 acres of oil, gas and mineral rights throughout Florida. The company holds these oil, gas and mineral rights on substantially all its owned acres, with additional mineral rights on other leased acres. The company’s principal lines of business are citrus groves and land management. The company is one of the citrus producers in the United States of America.
Tropicana Orange Purchase Agreement
On June 5, 2024, the company entered a new three-year Orange Purchase Agreement (the ‘Tropicana Agreement’) to sell oranges to Tropicana at prices that are approximately 33% to 50% higher, over the life of the contract, than the average price for all the citrus fruit sold to Tropicana last season. The Tropicana Agreement is effective June 5, 2024, through July 31, 2027, subject to its terms and conditions, and succeeds existing agreements with Tropicana that expired at the end of July 2024.
Extension of Grove Management Agreement
On October 30, 2023, the company entered into a Citrus Grove Management Agreement (the ‘Grove Management Agreement’) with an unaffiliated group of third parties to provide citrus grove caretaking services for approximately 3,300 acres owned by such third parties. The Grove Management Agreement may be terminated with written notice provided at least 60 days prior to the commencement of the next fiscal year, occurring subsequent to September 30, 2024, and with shorter notice under certain conditions. On September 20, 2024, the Grove Management Agreement was extended until December 31, 2024.
Citrus Greening Treatment
In 2022, the company began testing a new application of Oxytetracycline Hydrochloride (‘OTC’), which is registered with the U.S. Environmental Protection Agency (‘EPA’) under the Federal Insecticide, Fungicide and Rodenticide Act (‘FIFRA’) as an active ingredient in pesticide products for the control of certain bacterial diseases in non-food bearing trees; this new application involves use of OTC-containing products as a therapy to address citrus greening. On October 28, 2022, after a review of the new application method by the EPA and the Florida Department of Agriculture and Consumer Services (FDACS) pursuant to Section 24(c) of FIFRA, FDACS granted a special local-need registration through December 4, 2025, and EPA did not disapprove of FDACS’s grant of this registration. Although not a cure for citrus greening, this OTC application has been found to mitigate some of the impacts of citrus greening and to decrease the rate of fruit drop and improve fruit quality.
During the year ended September 30, 2024, the company treated substantially all its producing trees (approximately 4.5 million) with OTC. This represents a second round of injections for approximately 35% of its producing trees, which were treated in fiscal year 2023.
Segments
The company operates through two segments, Alico Citrus, and Land Management and Other Operations.
Alico Citrus
This segment operates as a citrus producer on its own land and as a manager of citrus groves for third parties. It includes the production, cultivation, and sale of citrus on its owned lands and as a manager of citrus groves for third parties.
The company owns and manages citrus land in DeSoto, Polk, Collier, Hendry, Charlotte, Highlands, and Hardee Counties in the state of Florida and engage in the cultivation of citrus trees to produce citrus for delivery to the fresh and processed citrus markets. Alico citrus groves total 48,251 gross acres or 90.4% of its land holdings.
Effective July 1, 2024, the company extended a lease representing approximately 637 acres for one-year through June 30, 2025. It has the right, on the same terms and conditions, to extend this lease for two one-year periods. This lease expands its citrus production acreage by approximately 2%, over its owned land production, to approximately 32,000 net citrus acres.
Of the 48,251 gross acres of citrus land the company owns and manages, 14,191 acres are classified as support and other acreage. Support and other acreage include acres used for roads, barns, water detention, water retention and drainage ditches integral to the cultivation of citrus trees, but which are not capable of directly producing fruit. In addition, the company owns a small citrus tree nursery consisting of approximately 22 acres and utilize the trees produced in this nursery in its own operations. The 34,060 remaining acres are classified as net plantable acres. Net plantable acres are those that are capable of directly producing fruit. These include acres that are producing, acres that are developing (i.e., acres that are planted with trees too young to commercially produce fruit) and acres that are fallow.
In an effort to increase the density of its citrus groves, the company has planted approximately 2,500,000 new trees since 2017. This level of planting has been substantially higher than the normal level of tree attrition. The company will continue to evaluate the density throughout its groves and determine the appropriate tree plantings moving forward. Typically, citrus trees become fruit-bearing four to five years after planting and peak around seven to eight years after planting.
The company’s Alico Citrus business segment cultivates citrus trees to produce citrus for delivery to the processed and fresh citrus markets.
The company generally use multi-year contracts with citrus processors that include pricing structures based on a floor and ceiling price.
In May 2020, the company entered into two agreements to supply Tropicana, its largest customer, with citrus fruit. On June 26, 2023, it renewed another agreement to supply Tropicana with citrus fruit, which replaced a prior agreement that had expired after the fiscal year 2023 harvest season. This new agreement was effective August 31, 2023, and expires on August 31, 2025, and is also based on fixed prices per pound solid with escalation clauses over the term of the agreement.
On October 30, 2023, the company entered into the Grove Management Agreement, and it continues to provide grove management services to several small third-party grove-owners on acres within its groves.
Land Management and Other Operations
This segment includes land conservation, encompassing environmental services, land leasing and related support operations. This segment includes leases for grazing rights, hunting leases, a farm lease, a lease to a third party of an aggregate mine, leases of oil extraction rights to third parties, and other miscellaneous operations generating income.
The company owns and manages land in Collier, Glades, and Hendry Counties and lease land for recreational and grazing purposes, conservation, and mining activities. The company’s Land Management and Other Operations land holdings total 5,120 gross acres, or 9.6% of its total acreage.
Customer
Revenue from Tropicana represented 86.8% of the company’s consolidated revenue for the years ended September 30, 2024.
Strategy
The company’s core business strategy is to maximize stockholder value. The company’s strategy is based on best-management practices of its agricultural operations and the environmental and conservation stewardship of its land and natural resources. The company endeavor to manage its land in a sustainable manner to maximize value creation and to evaluate the effect of changing land uses while considering new opportunities.
History
Alico, Inc. was founded in 1960. The company was incorporated under the laws of the state of Florida in 1960.
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