Cadiz and Limoneira announced today that the two firms have entered into a long-term lease agreement to develop new lemon orchards on Cadiz's agricultural property, the Cadiz Ranch, which is located in the Cadiz Valley in eastern San Bernardino County, California.
Under the terms of the agreement, Limoneira secured the right to plant up to 1,280 acres of lemons over the next five years. Limoneira will initially plant 320 acres of lemons and will hold options to plant another 960 acres by 2018. This may mean that the vast majority of previously cultivated land at Cadiz Ranch could return to active farming. Cadiz will provide Limoneira with access to water at the Cadiz Ranch in order to irrigate the land.
In return, Limoneira will provide Cadiz an annual rental and water supply payment. The rental payment will consist of $200 per planted acre and a lease payment equal to 20% of net cash flow from the harvested lemon crop grown on Cadiz property. The annual rental payment though will not exceed $1,200 per acre.
The agreement between the two companies provides a new growing, packing, and marketing opportunity that is complementary to Limoneira's existing production. Limoneira president and CEO, Harold Edwards, said, "This agreement represents an important component of our global growth strategy to expand our productive agricultural acreage. . .to drive top-line growth and increase our profitability."
Limoneira (www.limoneira.com) is a 120-year old agribusiness with approximately 8,000 acres of agricultural lands, real estate properties, and water rights in California. Cadiz Inc. (www.cadizinc.com) is a land and water resource development company that owns 70 square miles of property with significant water resources in San Bernardino County, California.
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