Florida's orange crop is set to be the smallest since WWII, sending juice prices surging
Citrus disease and bad weather are constraining supply of oranges in the United States and internationally. Meanwhile, demand for orange juice — which has been sliding for years — got a bump during the pandemic, CNN reports.
That has sent orange juice prices higher during the pandemic, and they will probably continue to climb: Frozen orange juice futures have surged more than 50% during the pandemic, and they rose to a two-year high last week — soaring 5% alone Thursday.
"You have your classical supply-demand mismatch," said Shawn Hackett, president of Hackett Financial Advisors, which specializes in agricultural commodities analysis. Because of that, consumers should expect "much higher prices at the supermarket."
The anticipated spike in orange juice prices comes as consumers are already facing inflation across multiple sectors. The US consumer price index rose 7% over the past year before seasonal adjustments, the steepest climb in prices since June 1982, the Bureau of Labor Statistics reported last week.
Over the past year, food consumed at home was 6.5% more expensive while prices at restaurants rose 6%. Fruit juice and nonalcoholic drink prices have already spiked 5.7% this year, and orange juice futures are up.
Last week, the USDA said it expects Florida to produce 44.5 million boxes of oranges this year, an unusually small harvest. That would be the smallest since the 1944-45 season when 42.23 million boxes were produced, a Florida statistician with the USDA told CNN Business.
"The Florida citrus crop is going to be one of the smallest crops since the 1940s," said Judith Ganes, president of J Ganes Consulting, which offers commodities analysis to the food and agriculture industry. "It's going to be even smaller than the production that occurred several years ago ... when Hurricane Irma blew through Florida," she said.
Florida's orange crops, which are responsible for most of the country's orange juice, have been dwindling for years, she noted.