Note 2. Inventories

The Company records its inventory at the lower of cost or net realizable value. For the six months ended March 31, 2023 and the fiscal year ended September 30, 2022, the Company recorded approximately $1,616,000 and approximately $6,676,000, respectively, for adjustments to reduce inventory to net realizable value, as a result of the impact of Hurricane Ian, which adversely impacted the Company’s unharvested citrus crop as of March 31, 2023 and September 30, 2022.

The Company, for the fiscal year ended September 30, 2022, recorded a casualty loss to reduce the carrying value of the unharvested fruit crop on trees inventory by approximately $14,900,000. No additional casualty loss was recorded for the six months ended March 31, 2023.

In the three and six months ended March 31, 2023, the Company received insurance proceeds relating to Hurricane Ian of approximately $4,759,000 for crop claims, which have been recorded in operating expenses. The Company has additional crop insurance claims outstanding and is awaiting determination of the additional proceeds to be received.

The Company was eligible for Hurricane Irma federal relief programs for block grants that were being administered through the State of Florida. During the fiscal years ended September 30, 2022, 2021 and 2020, the Company received approximately $1,123,000, $4,299,000 and $4,629,000, respectively, under the Florida Citrus Recovery Block Grant (“CRBG”) program. The Company received the remaining portion during the first quarter ended December 31, 2022, of approximately $1,266,000. These federal relief proceeds are included as a reduction to operating expenses in the Condensed Consolidated Statements of Operations.

In December 2022, the Consolidated Appropriations Act was signed into law by the federal government; however, the details of the mechanism and funding of any Hurricane Ian relief still remain unclear and, if available, the extent to which the Company will be eligible. The Company intends to take advantage of any such available programs as and when they become available. The Company is currently working with Florida Citrus Mutual, the industry trade group, and government agencies on the federal relief programs available as part of the Consolidated Appropriations Act.