Harold Edwards: Yes, that’s a great question. And fundamentally, we believe in that our land and water assets will continue to go up. So owning those long term, I think, is the smart thing for us to do. It really depends on regions, as we’ve always talked about, as water scarcity creates water value. Now, in California, we had a year of rain, and so that’s to be determined. But really, in the desert specifically, it’s fundamental that growing deserts or lemon in the sand in the desert really doesn’t make a lot of sense relative to the other regions around the world, and then California that can do that. So if we can follow half or even all of it, we’re very optimistic to think that acreage that was losing probably a few thousand dollars an acre over the last few years now is basically coupon.
And the remaining acreage that we have is all newer plantings, more dense plantings, which gives us the better ability to achieve profitability and lower cost. But the real impediment there, specific to the desert, is the transportation. And I don’t think any of us see transportation going down. So if we see that opportunity for a long-term fallow program, which would potentially be 25, 30 years at double or more of the current rates, that’s very attractive. And you create an $8 million coupon and then find new sources, whether it’s Coachella or Mexico or the Southern Hemisphere. That’s kind of how we walk through that. And so, just one other comment on where we are here in District 2, it’s similar. This is our homeland and we believe in holding onto our assets and increasing value.
But there will be one-off opportunities to lease water, whether that’s to the communities around us or other farmers, not quite like a fallowing just year-on-year programs in that way.
Operator: Thank you. Our next question comes from Ben Klieve with Lake Street Capital Markets.
Ben Klieve: All right, thanks for taking my question. A few queries, guys. First of all, on lemon pricing, you talked about kind of how optimistic you are about pricing conditions today. If you quantified that, I missed it in your comments. Can you talk about the pricing that you’re seeing in the market today? Seeing that as the highest it’s been since 2018?
Harold Edwards: Sure, you bet. So as we know, this is sort of the slow period for us. Fundamentally in California, the crop is moved away from District 2 and there’s a little bit of gap between now and the desert. And the way that the fruit profile worked at the end of District 2, a lot of that fruit went to juice or was unsellable, as we noted, about 40% of that. So there was a major gap in that supply. So prices, well, they look bad from a mix perspective. The prices were in the low to mid-20s, sort of in July. Now we’re seeing prices as supply even dips further between $35 and $40 for some mix. And so it always has to do with how much do you have of anything, which is nobody has all the supply at the moment, but we’re about to come into supply from the desert in the next month and a half and then the winter crop.
And historically, as we’ve seen a higher base price, we see much less of a dip. And so, for example, this year’s price over last year’s average, if you just put the mix together, is $4 to $5 higher than the last two years or even three years closer to where we were in 2018. So it gives us some optimism that the supply is in balance, that people are going to move through the crops in an efficient way, which will help maintain those elevated prices going forward.
Ben Klieve: Yes, optimism, I’d say so, that’s great to hear. Perfect, like to transition to your comments on your farm management practices. First question is the $5 million that you recognize, is that entirely associated with farm management for the northern properties divestiture that you had, or was a portion of that from farms elsewhere?
