Price of OJ surges during worst orange shortage since WWII
Orange and citrus lovers are in for a bitter case of sticker shock as Florida’s crop is on pace to be its smallest in more than 75 years.
The US Department of Agriculture said this year’s crop will produce a smaller yield for the second consecutive year, with orange production across Florida down 3% this winter.
Florida — which accounts for more than 70% of total US production and more than 90% of America’s orange juice — is expected to produce 44.5 million 90-pound boxes of oranges during the current season — 1.5 million boxes fewer than the most recent forecast that was released in December.
The last time the state produced so few boxes was during the 1944-45 growing season, when Florida recorded a yield of 42.3 million boxes of oranges.
Since the start of the year, the price of orange juice has increased 5.26%, or $7.70 per pound.
The Florida Department of Citrus said that this year’s low yield was caused by an outbreak of citrus greening, an incurable plant disease that is spread by insects. Citrus greening has wreaked havoc on Florida groves since it was first detected in 2005, according to The Wall Street Journal.
Frozen concentrated orange juice futures were trending higher. Since the onset of the pandemic, futures have risen some 50%. Futures soared by 5.1% after the USDA released its forecast predicting a smaller harvest.
The pandemic proved to be a boon for the orange juice and citrus trade. The lockdowns fueled renewed demand for orange juice — a shift from recent years as Americans have opted for drinks that contain less sugar.
In February 2020, just prior to the lockdowns, orange juice futures were trading at 10-year lows. By the middle of the next month, sales of orange juice surged by 10%.
The USDA predicts that a surplus of crops in foreign markets like Brazil and Mexico will help offset the domestic shortage.
Americans are already paying more for goods and services thanks to soaring levels of inflation not seen in four decades. Consumer prices jumped by 7% for the year ending in December, according to federal data.