The latest news and trends on Mexican citrus can be found in this report from the U.S. Department of Agriculture's Foreign Agricultural Service.

Some excerpts on Persian limes, with quite a bit of background on costs....

Veracruz, the main Persian lime producing state, suffered dry weather conditions for most of 2010 as well as heavy rainfall from hurricanes that affected both the volume and the quality of the fruit. Lime production for MY 2008/09 was revised upward based on official data. High international market prices and fewer phytosanitary concerns have led to increased planted area for both Persian and Key limes. Approximately 42 percent of total planted area is devoted to Persian limes, 54 percent is for Key limes, and the remainder is for Italian lemons. The Persian lime area planted in Veracruz has grown at a faster rate than that of Key limes.

In fact, many producers have replaced orange and grapefruit groves with Persian limes in order to take advantage of strong international demand and higher prices. Michoacan and Colima are the main Key lime producing states. Key lime planted area has increased at slower rates due to domestic price swings. Michoacan has an excellent winter production window (December to February) that allows its Key limes to enter the domestic market first. As such, planted area has tended to expand more rapidly in this state.

According to producers, the domestic market is saturated with Key limes and a substantial increase in Michoacan’s planted area could reduce prices for Key limes in the international market. It has become current practice for Michoacan producers to suspend harvest during the course of the year to prevent oversupplying the domestic market and subsequent low prices. Therefore, planted area for MY 2010/11 is forecast to remain similar to that of MY 2009/10. Estimates for planted area for MY 2009/10 were revised upward and estimates for harvested area were revised downward from previous FAS Mexico estimates due to weather-related issues. Estimates for MY 2008/09 were updated according to official information.

The state of Colima lost planted area due to weather and high swings in lime prices. More than 25 percent of the Persian lime groves in Veracruz use micro-jet irrigation, or other irrigation systems, and produce year-round. Most of the irrigated Key lime groves are in the states of Michoacan and Colima and are able to produce year-round. In contrast, almost all of the planted area for Key limes in Guerrero and Oaxaca is rain fed. In Colima, about half of the Key lime groves have coconut palm trees planted between Key lime trees in order to increase producer revenue.

 The Persian lime industry tends to be dominated by large producers who have achieved economies of scale. Rain-fed Persian lime production costs average between 11,000 pesos/ha to 18,000 pesos/ha (U.S. $873.00 to $1,428.57/ha). Well-tended areas can have production costs as high as 28,000 pesos/ha or more (U.S. $2,222.25/ha) in Veracruz.

Production costs are affected by herbicide and fertilizer prices. The cost of production for Key limes varies according to cultivation practices and technology. In the most important Key lime producing states (Oaxaca, Colima and Michoacan), production costs can vary from 8,500 pesos/ha to 18,600 pesos/ha (U.S. $674 to $1,476.19/ha), and can increase to 25,000 pesos/ha (U.S. $1,984.12/ha) for well-tended areas.

Transportation costs from Veracruz to the U.S. border are approximately 11,500 pesos/trailer (U.S. $912.69), depending on fuel prices. Packing plant input costs increased, as well, mainly due to exchange rate fluctuations that made imported goods, such as the boxes to pack the fruit, more expensive. Persian and Key lime yields differ widely depending on production conditions.

The average yields for Persian limes in Veracruz range from 8 to 16 MT/ha, depending on cultivation practices, but some yields are as high as 25 MT/ha. Key lime yields average between 7 to 12 MT/ha, with a few well-tended groves reaching 30 MT/ha. Grower prices for Persian limes range from 600 to 1,200 pesos/MT (U.S. $47.61 to $95.23/MT) for the domestic market, and 3,000 to 7,000 pesos/MT (U.S. $238.09 to $555.52/MT) for the export market.

Grower prices for Key limes fluctuate more than prices for Persian limes, depending on the season and the producing state. On average, Key lime grower prices range from 900 to 3,400 pesos/MT (U.S. $71.42 to $269.84/MT). Although Key lime production is year round, production in Michoacan targets the winter season (October to February), while production in Colima covers demand from May through September. Oaxaca and other states cover the rest of the year.

Trade: Persian and Key lime exports for MY 2010/11 are forecast at levels similar to MY 2009/10, as heavy rainfall in the last quarter of 2010 prevented limes from achieving export quality. However, exports depend heavily on international demand from Europe, the United States and the current financial market. However, in December 2010, new U.S. import requirements put in place to prevent the entry of Sweet Orange Scab (i.e., Elsinoë australis) are stopping Mexican limes from reaching the U.S. market.

Currently, Mexican exporters have stopped exports until an agreement is reached between Mexican and U.S. sanitary officials. Exports for MY 2009/10 were revised downward from previous estimates, due to decreased demand from international markets. The spring Persian lime harvest begins in early April and, depending on prices, they are usually shipped to European markets before being shipped to the United States. According to exporters, a good price for Persian limes is about U.S. $40 per 40-pound box.

U.S. prices were good in April 2010 and reached a price of U.S. $47 per 40-pound box. Exports for MY 2008/09 were updated according to trade data. Lime producers are expanding into new markets (e.g., Japan and Europe), but still supply about 40 percent of the U.S. and Canadian markets. International prices for Persian limes reached U.S. $35 to $47 per 40-pound box at the peak of winter 2010 but started at U.S. $15 to $19 per 40-pound box in October and November.

According to producers, fresh lemons are exported to Europe, the United States, and Japan. According to trade data (HTS 0805.5020.00), Mexico exported 22,338 MT to the United States during MY 2008/09. For MY 2009/10, exports to the United States were slightly lower compared to MY 2008/09 (21,555 MT) as hurricanes caused excessive rainfall that affected product quality. There is no data available regarding Italian lemon exports as the commodity is grouped in the lemon/lime tariff line. The United States is the main export market, where 60 to 70 percent of lemons are exported.