Alico Maps Shift From Citrus to Florida Land Development at IDEAS Conference

Alico is exiting citrus production after disease and hurricane damage made its groves uneconomical, shifting toward leasing farmland and managing land for future development.

The company is pursuing entitlements across its 47,300-acre portfolio, including a proposed 4,660-acre Collier County community that could eventually include about 9,000 homes, though state and federal approvals remain pending.

Alico has generated more than $90 million from agricultural land sales over the past 18 months and is using its liquidity to avoid distressed sales, fund operations and return capital through dividends and share repurchases.

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Alico NASDAQ: ALCO outlined its transition from citrus production to a land-management and real estate-entitlement strategy at the Midwest IDEAS Investor Conference, as the Florida-based company seeks to monetize its agricultural acreage while pursuing development approvals for selected properties.

Chief Executive Officer John Kiernan said Alico, which has operated for roughly 130 years and has been public since 1960, owns 47,300 acres across 27 locations in seven Florida counties. The company’s dispersed land portfolio provides operational diversification and gives individual properties different development timelines, he said.

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“We’ve now evolved today into basically a modern agricultural company with some residential and commercial real estate aspirations,” Kiernan said.

Exit from citrus production

Alico was previously one of the largest U.S. citrus growers, at one point managing 5.5 million orange trees and serving Tropicana as a major customer, Kiernan said.

However, citrus disease weakened the company’s trees, while hurricanes in 2022 and 2024 further damaged production. By the end of 2024, Alico concluded that orange production was no longer economically viable and elected to exit citrus operations. Kiernan said reduced fruit output was insufficient to cover the company’s fixed costs for maintaining groves and harvesting crops. The company has since leased much of its agricultural acreage to third-party operators.

Current uses include vegetable farming, sod harvesting, cattle ranching and sugar production. Alico also announced in June that 3,200 acres were being leased to a sugar company. Only a limited portion of the company’s former citrus acreage remains in citrus-related use, Kiernan said. He estimated that operators are continuing citrus salvage or production on roughly 5% to 10% of the company’s acreage, with approximately 3,000 to 4,000 acres remaining after prior tenants did not renew leases because tree conditions deteriorated.

Land-value strategy and development pipeline

Alico has categorized its land into three groups: properties that management believes could be developed within five years, properties that may become developable in five to 15 years, and acreage expected to remain agricultural beyond that period.

About 75% of the portfolio, or roughly 33,000 acres, remains in the agricultural category.

Management estimates the present value of Alico’s assets at $650 million to $750 million, using discount rates of 10% to 15%. Kiernan said the company’s market capitalization had been about $200 million when the analysis was initially developed and was about $300 million at the time of the presentation. The estimate represents entitled land value and does not include infrastructure spending, corporate costs or development expenses, according to Kiernan. He said Alico has not committed to becoming a direct developer and retains the option to sell entitled land, develop it internally or partner with regional or national homebuilders.

The company’s largest development initiative is a propo...