California avocado grower douses fire fears, stock surges

FILE PHOTO: Avocados at an avocado farm are shown damaged by the Lilac Fire, a fast moving wild fire in Bonsall, California, U.S., December 8, 2017. REUTERS/Mike Blake

SAN FRANCISCO (Reuters) - Shares of Limoneira jumped 4 percent on Wednesday after the avocado and lemon grower said its crops escaped significant damage from a wildfire roaring through an area of Southern California.

The nation’s largest avocado producer said in a statement after the stock market closed on Tuesday that fire destroyed 14 of its farm-worker housing units, and caused a power outage at its packing house, but that it did not expect the blaze to have a material impact on operating results.

Limoneira Co’s stock remains down about 10 percent since the fire broke out on Dec. 4, even after Wednesday’s bounce. The fifth largest wildfire in state history was 25 percent contained after spreading across Ventura and Santa Barbara counties.

As well as destroying hundreds of homes and displacing over 94,000 people, it damaged or endangered much of the region’s avocados - the main ingredient in guacamole - with flames, blankets of ash, as well as Santa Ana winds knocking the fruit from trees.

Ventura County is California’s largest growing region for both lemons and avocados. The state produces about 90 percent of the country’s avocado crop and 80 percent of its lemons.

Limoneira also said it expected its annual revenue for the fiscal year that ended in October to be about $120 million, an increase of 9.4 percent from the previous year.

About 10 percent of Hass avocados sold in the United States so far in 2017 were produced in California, while Mexico provided 78 percent, according to the Hass Avocado Board.

Reporting by Noel Randewich; Editing by Andrew Hay