Agribusiness Division
Farming
We are one of California’s oldest citrus growers and one of the largest
growers of lemons and avocados in the United States. In addition to growing
lemons and avocados, we grow oranges and a variety of specialty citrus and other
crops. We have agricultural plantings throughout Ventura, San Bernardino and
San Luis Obispo Counties in California and Yuma County in Arizona, which collectively
consist of approximately 4,600 acres of lemons, 1,000 acres of avocados, 1,400
acres of oranges and 900 acres of specialty citrus and other crops. We also
operate our own packinghouses in Santa Paula, California and Yuma, Arizona,
where we process, pack and sell lemons we grow as well as lemons grown by others.
Lemons. Our lemon farming is included in our “lemon operations”
reportable segment within our financial statements. We market and sell lemons
directly to food service, wholesale and retail customers throughout the United
States, Canada, Asia, Australia and certain other international markets. We
are one of the largest lemon growers in the United States with approximately
4,600 acres of lemons planted primarily in Ventura and Tulare Counties in California
and in Yuma County, Arizona. In California, the lemon growing area stretches
from the Coachella Valley to Fresno and Monterey Counties, with the majority
of the growing areas being located in the coastal areas from Ventura County
to Monterey County. Ventura County is California’s top lemon producing
county. Approximately 40% of our lemons are grown in Ventura County, 25% are
grown in Tulare County, 20% are grown in Yuma County, Arizona and 15% are grown
in San Bernardino County, California.
There are over fifty varieties of lemons, with the Lisbon, Eureka and Genoa
being the predominant varieties marketed on a worldwide basis. California-grown
lemons are available throughout the year, with peak production periods occurring
from January through August. Approximately 90% of our lemon plantings are of
the Lisbon and Eureka varieties and approximately 10% are of other varieties
such as sweet Meyer lemons, proprietary seedless lemons and pink variegated
lemons. The storage life of fresh lemons generally ranges from 1 to 18 weeks,
depending upon the maturity of the fruit, the growing methods used and the handling
conditions in the distribution chain.
With an average annual production of approximately 750,000 tons of lemons, California
accounts for approximately 90% of the United States lemon crop, with Arizona
producing a vast majority of the rest. Between 50% and 70% of the United States
lemon crop is utilized in the fresh market, with the remainder going to the
processed market for products such as juice, oils and essences. Most lemons
are consumed as either a cooking ingredient, a garnish, or as juice in lemonade
or carbonated beverages or other drinks. Demand for lemons is typically highest
in the summer, although California producers through various geographical zones
are typically able to harvest lemons year round.
Avocados. Our avocado farming is included in our “other agribusiness”
reportable segment within our financial statements. We are one of the largest
avocado growers in the United States with approximately 1,000 acres of avocados
planted throughout Ventura County. In California, the avocado growing area stretches
from San Diego County to Monterey County, with the majority of the growing areas
located approximately 100 miles north and south of Los Angeles County.
Over the last 75 years, the avocado has transitioned from a single specialty
fruit to an array of 10 varieties ranging from the green-skinned Zutanos to
the black-skinned Hass, which is the predominant avocado variety marketed on
a worldwide basis. California-grown avocados are available year round, with
peak production periods occurring between February and September. Other avocado
varieties have a more limited picking season and typically command a lower price.
Because of superior eating quality, the Hass avocado has contributed greatly
to the avocado’s growing popularity through its retail, restaurant and
other food service uses. Approximately 98% of our avocado plantings are of the
Hass variety. The storage life of fresh avocados generally ranges from 1 to
4 weeks, depending upon the maturity of the fruit, the growing methods used
and the handling conditions in the distribution chain.
Windfall Farms - Creston, California. Windfall Farms is an approximately 700-acre
former thoroughbred breeding farm and equestrian facility located in Creston,
California, near Paso Robles, California. During fiscal years 2014 and 2015,
we planted approximately 200 acres of vineyards and we intend to plant an additional
100 acres in 2017. Vineyards are generally productive after four years. During
the fourth quarter of 2016, the vineyards produced their first harvest from
the 2014 planting, generating approximately 200 tons of grapes and $0.3 million
of revenue. We generally expect to sell vineyard production by the ton to various
wineries with current per ton prices of approximately $1,500 depending on the
grape variety and other factors. Based on management’s reassessment of
the strategic and operational plans for the Windfall property and concurrent
with the first harvest in October 2016, we re-purposed Windfall Farms from a
real estate development project to an agricultural ranch and reclassified $26.8
million of real estate development assets to property, plant and equipment.
Accordingly, Windfall was reclassified to the other agribusiness reportable
segment from the real estate development segment during October 2016.
Rental Operations Division
Our rental operations division is provided for in our financial statements as
its own reportable segment and includes our residential and commercial rentals,
leased land operations and organic recycling. The rental operations division
represented approximately 5%, 5% and 4% of our fiscal year 2016, 2015 and 2014
consolidated revenues, respectively.
Residential
We own and maintain approximately 260 residential housing units located in Ventura
and Tulare Counties that we lease to employees, former employees and non-employees.
In fiscal year 2015, we added 65 new agriculture workforce housing units in
Santa Paula, California. These properties generate reliable cash flows which
we use to partially fund the operating costs of our business and provide affordable
housing for many of our employees and the community.
Commercial
We own several commercial office buildings and a multi-use facility consisting
of a retail convenience store, gas station, car wash, and quick-serve restaurant.
As with our residential housing units, these properties generate reliable cash
flows which we use to partially fund the operating costs of our business.
Organic Recycling
With the help of one of our tenants, Agromin, a processor of premium soil products
and a green waste recycler located in Oxnard, California, we have implemented
an organic recycling program. Agromin provides green waste recycling for cities
in Santa Barbara, Los Angeles and Ventura Counties. We worked with Agromin to
develop an organic recycling facility on our land in Ventura County, to receive
green materials (lawn clipping, leaves, bark and other plant materials) and
convert such material into mulch that we spread throughout our agricultural
properties to help curb erosion, improve water efficiency, reduce weeds and
moderate soil temperatures. We receive a percentage of the gate fees Agromin
collects from regional waste haulers and enjoy the benefits of the organic material.