Griffith citrus grower Vito Mancini forecasts tough times for producers

He says short-term contracts for fresh Valencia oranges are currently unsustainable, with prices between 40 - 45 cents per kilogram with no offers of bonuses or CPI increases.

With the cost of producing citrus expected to increase, he is encouraging growers to think objectively when negotiating contracts.

"Electricity is expected to be 50 per cent more expensive in the next three years. El Nino weather patterns could push the price of temporary water above historic averages, and labour, fuel and fertiliser costs will increase over time," Mr Mancini said.

"Although there has been flexibility in contracts over the past few years, growers should be mindful the tonnage signed up to is a legal obligation tied into the price set. Growers can issue their own contract to processors but this is a challenge the industry needs to work on.

"With that in mind, I would encourage all growers looking at contracting supply to a processor to negotiate a fair price and CPI or ensure other means to stay afloat.

"Some growers have successfully negotiated not only price and CPI increases but also months of harvest and penalties on late payments."

Mr Mancini believes juice is in a stronger global position than in the past and believes now is the time to work on bringing back some profitability into the sector.

"Sustainability of growers is paramount for maintaining supply into the years ahead. Without good grower returns there will be many that leave the industry," he said.

"I'd rather see processors offer less contracts and have them properly enforced so that, regardless of whether it's a good year or bad year, you're still looking at hitting the same return mark.

"Valencias are very similar to winegrapes - the margins are always low. With navels you can always do better but with Valencias you can only do as well as your neighbour. Yield is king."