The U.S. Department of Agriculture is reporting the Florida orange crop is at a 24-year low and that’s driven orange juice prices to their highest level in two years.
On Wednesday, the USDA forecast the 2013-2014 Florida orange harvest at 110.0 million boxes, about 18 per cent less than last season’s crop. The last time the orange harvest was this low was 1990. Usually when orange production falls, it is because of frost or a hurricane season that affected conditions.
Especially hard hit are Valencia oranges, the variety most used in making juice, with a seven per cent drop this month alone.
The problem is a bacteria called citrus greening which causes fruit to shrink and to drop early.
The bacteria is being spread by a gnat-sized insect, the Asian citrus psyllid, which, like the bacteria, originated in China.
The effect of the disease is to make the fruit stay green and remain sour. Eventually, the citrus tree dies.
All citrus growing hit by bacteria
Florida growers, the largest producers of oranges, have tried replacing their fruit trees, but with little success in tackling the disease. So far, there is no effective treatment.
Florida is not the only citrus growing area affected – citrus greening is also widespread in Brazil, another major cultivator of oranges and grapefruit. It is believed to affect citrus growing around the world.
For Florida growers, a particularly dry growing season has complicated the effect. The USDA report found grapefruit production is so far unaffected, but tangerine production fell by nine per cent.
The effect of the poor crop is already being seen in orange juice futures, which are up 21 per cent so far this year on the U.S. futures exchange.
That could ultimately affect the price of juice, and the business prospects for companies such as Pepsico, the maker of Tropicana juices, and Coca Cola Co., which owns Minute Maid and Simply Orange brands.
Complicating the pricing picture is the per capita decline in orange juice sales, as consumers seek out lower calorie drinks and change their breakfast patterns. Demographics also play a role, as older adults drink less juice than young ones.
Retail sales of orange juice fell 5.3 per cent from a year ago in March, according to the latest data published by the Florida Department of Citrus.Suggest a correction