Market and welfare impacts in the orange juice market from adopting antibiotic trunk injections to deal with citrus greening

Abstract

Citrus greening is a bacterial disease with no cure or treatment. Since its onset in Florida, orange production statewide has decreased by more than 90%. A recently approved technology consists of injecting antibiotics into tree trunks, which growers expect to improve tree health and increase yield. We use a spatial equilibrium model to conduct an ex-ante analysis of the not-from-concentrate orange juice market to examine the market and welfare impacts of Florida growers’ adoption of antibiotic trunk injections. Results show yield must increase by at least 83% to generate a positive producer surplus when using a discount rate of 10%.