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Why orange juice is getting more expensive

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Extreme weather, including an unexpected freeze in January 2022, and an incurable citrus disease that has affected orange groves have caused the cost of O.J. to rise. This is adding to the strain on household budgets already being squeezed by an overall rise in the U.S. cost of living.

The cost of non-frozen, non-carbonated juices and drinks rose by 12.5% in January compared with a year ago and increased by 1.5% compared with the month before, according to government data released this week. Orange prices also rose by 4.8% in January compared with last year and increased by 3.7% month over month. That’s one of the highest monthly percentage increases in prices across all food categories. 

A bottle of fresh orange juice online costs about $4 and varies across platforms and brands — a 59 fluid-ounce bottle of Florida’s Natural Orange Juice without pulp is $4.29, whereas a 52 fluid-ounce bottle of Simply Orange Juice pulp-free is $4.79

The Department of Agriculture earlier this month reduced its projection of Florida orange production for the 2022-2023 season.

Last week, the Department of Agriculture reduced its projection of Florida orange production for 2022-2023 by 11% from its January forecast. The USDA estimated that the state would produce 16 million of 90-pound boxes of oranges for the year rather than 18 million boxes as estimated in January.

California, by comparison, is on course to produce an estimated 46.1 million boxes of oranges in the 2022-2023 season, broadly in line with the number produced in that state the year before. The U.S. is forecast to produce 63.25 million boxes of oranges in the 2022-2023 season, according to the latest estimates released in February, down from 81.65 million boxes in 2021-2022.

Hurricane Ian, which ravaged large swaths of the Florida coastline in 2022, took its toll on the state’s citrus farmers, resulting in the smallest orange crop since 1937. 

Orange juice is a common offering in U.S. public schools, particularly as part of school breakfast programs, which permit pasteurized, 100% fruit juice to make up as much as half of the fruit servings offered over a week, according to a spokesperson at the School Nutrition Association, a national nonprofit representing 50,000 members providing school meals. 

If the price for orange juice continues to rise, it could be an extra burden to consumers, especially for schools and hospitals, said Curt Covington, senior director of partner relations at AgAmerica Lending, a national agriculture and infrastructure lender. In some respects, orange juice risks turning from a refrigerator “staple” to a “luxury item,” he added. 

Thus far, no members of the School Nutrition Association have voiced concerns about orange juice, but a spokesperson said rising prices are a problem across the board for schools that aim to meet the nutrition needs of students. Among directors of school-meal programs nationwide 88.5% indicated that costs are a significant challenge, according to the organization’s 2023 survey

The impact of extreme weather and disease

Extreme weather and disease presented a double-whammy for citrus farmers in Florida.

“Citrus greening (also known as Huanglongbing or HLB) is a disease spread by an insect called the Asian citrus psyllid,” according to the Florida Department of Citrus (FDOC), the state agency in charge of regulating, researching and marketing the state’s orange, mandarin and grapefruit industry. 

“The psyllid feeds on the stems and leaves of the trees, infecting the trees with the bacteria that causes citrus greening,” it adds. “Greening impairs the tree’s ability to take in nourishment, ultimately resulting in fewer and smaller fruit over time. Once a tree is infected, there is no cure. Greening slows the flow of nutrients, impairing the tree’s ability to properly mature, resulting, in some cases, in smaller and sour tasting fruit.”

Adding to these troubles: Hurricane Ian and other tropical storms in 2022 affected more than 375,000 acres devoted to commercial citrus growing in Florida, the government department added. That translates to a loss of between 8% and 11% of the state’s citrus trees. 

“This month’s crop forecast serves as a testament to the hardships Florida citrus growers continue to face and battle through,” the department in a statement this month. “It’s no secret that Hurricane Ian and Hurricane Nicole left the heart of the citrus country with a long road to recovery, but Florida growers have worked to recover from extreme weather before, and this year is no exception. ” 

The two hurricanes caused a lot of damage to the fruit on the trees, Covington added. It also hurt some of the orange buds that would have become flowers and fruits for the next fruit season, he added. 

Orange trees are different from some other kinds of fruit trees in that they bear the current crop and simultaneously start pushing out new buds for the spring and summer, Covington said. 

That means there are questions about next season’s orange crop, as well  — and about the prices that customers will ultimately pay for oranges and orange juice. “We’re not going to know until we get the 2023 bloom and just see what kind of crop is on that tree,” Covington said.

California versus Florida oranges

While most California oranges are grown for the fresh-fruit market, almost all Florida oranges — about 94% — are made into juice, according to FDOC data. And based on the production forecast for this year, Florida expects to account for 60% to 65% of the domestic production of orange juice. 

Because of the short supply of fresh orange juice, the price of frozen orange-juice concentrate has also risen. Orange juice futures reached an all-time high earlier this month. The most-active frozen concentrate orange juice (FCOJ)
OJ00,
-0.83%

contract trading on the Intercontinental Exchange was hovering at $2.38 a pound on Friday. 

“While the domestic supply of oranges has dropped significantly, processors are filling their needs with increased purchases of imported concentrates from Mexico and Brazil,” wrote Tanner Ehmke in a recent analysis. Ehmke is the lead economist of dairy and specialty crops at CoBank, a national cooperative bank serving industries across rural America.

In October, responding to customer Facebook comments on using Mexican juice concentrate, Florida’s Natural said it was due to the declining Florida orange crop and “lower-brix fruit”. The low supply of oranges resulted in a Florida orange juice shortage that “all US orange juice companies are facing.” 

“This was a recent change and Florida’s Natural will use as many Florida oranges as possible based on what Mother Nature delivers. We anticipate continuing on this path until Florida orange harvests have sustained growth,” the company wrote. Florida’s Natural was not immediately available for the request to comment.

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