The next big squeeze? OJ could skyrocket
The next grocery item families could see skyrocketing in price: Florida orange juice.
The state’s orange crop will be the smallest since World War II, according to a U.S. Department of Agriculture report earlier this month. And the threats to Florida’s “liquid gold” continue: Weather forecasters predict this weekend’s freezing temperatures in Florida will further hurt the season’s crop.
Florida is the country’s largest producer of juice oranges, at its peak producing 244 million boxes of oranges annually. This year, the USDA predicts that will fall to only 44.5 million.
Demand for orange juice had cooled in recent years as consumers became concerned about the amount of sugar in fruit juices.
But COVID-19 brought it back.
Demand during the pandemic has shot sales to levels not seen since 2016, said Mike Sparks, executive director of Florida Citrus Mutual, a trade group representing thousands of growers. And prices have risen throughout the pandemic as each successive wave of the virus has increased consumers’ demand for products high in vitamin C, believed to be beneficial in warding off viruses.
Like most groceries, orange juice prices have been going up. In 2021, orange juice prices rose 13.8 percent, according to the USDA, and according to market research firm Nielsen, retail prices of orange juice have increased another 5.73 percent this month. The 2021 increase in orange juice prices was roughly twice the rate of increase in the cost of groceries.
The average price of U.S. orange concentrate rose 8.5 percent in the four weeks up to Jan. 19, according to commodity price data firm Mintec, which predicts tighter supplies combined with rising ingredient costs will drive orange juice prices even higher in coming months.
The primary culprit for what is expected to be such a small crop is something called citrus greening, an incurable disease decimating Florida orange groves, spread by a lice-like bug.
The state’s crop is down more than 75 percent from its peak, according to Florida Citrus Mutual. Florida has lost 50 percent of its growers because of consolidation, land development and growers just quitting the business.
“Greening is the most difficult disease to ever impact citrus,” Sparks said. He points to labor shortages, plastic packaging shortages and other tricky supply chain logistics as additional challenges in recent months, but “greening is the primary cause of the reduction in number of boxes. We’re going to see prices increase.”
Greening leads to smaller fruit, often with an unpleasantly bitter flavor, as well as a higher rate of fruit dropping to the ground before ripening, said Mark Hudson, Florida state statistician with USDA’s National Agricultural Statistics Service. But, he added, some of the reason for this season’s historically low yield is because the state has fewer trees planted, with land lost to development or growers deciding to throw in the towel. Florida had 36.2 million Valencia trees in the 2006-07 growing seasons, Hudson said. This year that number is 30.4 million.
Florida growers have faced a range of challenges in recent years, from Hurricane Irma and other extreme weather to pests like greening as well as competition abroad, said the state’s agriculture commissioner, Nikki Fried.
Fried has opposed the USDA’s decision to allow the import of fresh citrus from China and has cautioned about how cheap imports from Mexico hurt Florida growers that are already struggling. She said in the most recent state legislative session, she requested more than $16 million for the citrus industry, including $8 million for research and $6 million to fight citrus greening. And in advance of this weekend’s freeze, she has urged growers to report losses within 72 hours to get disaster assistance.
A few years ago, Florida citrus was a $9 billion industry, employing 76,000 workers; now it’s $6.7 billion and 33,000 jobs. In the 32 counties that produce commercial fruit, growers are hustling to do what they can in advance of this weekend’s low temperatures, said Callie Walker, chief of the Bureau of Pest Eradication and Control at the Florida Department of Agriculture and Consumer Services. They are employing microjets of warm water, circulating air with windmills and filling up irrigation ditches to protect the groves.
“Unfortunately, we won’t know the long-term effects of a freeze for a while,” she said. “Young trees are especially susceptible to damage. It depends on how low the temperature goes and for how long.”
Florida dominates the not-from-concentrate orange juice market; California oranges are sold whole and not used for juice, according to Sparks, because “they’re prettier to look at but not as juicy.”