Orange juice prices go bananas
The US Agriculture Department (USDA) issued a gloomy forecast last week for Florida's orange crop, forecasting that the state will harvest merely 44.5 million 40-kilogram boxes of oranges in 2022 amid citrus disease and bad weather. This would be the smallest crop yield since the 1944-45 season, an analyst from the USDA told CNN Business.
The Sunshine State provides most of the orange juice in the US.
Meanwhile, according to Statista.com, demand for orange juice in the US soared during the Covid-19 pandemic after falling for the previous two decades. The sales of 100% non-concentrated juices jumped from $5 billion to $5.5 billion in 2020, and stayed largely at that level last year, data from Euromonitor International shows. This has already pushed orange juice prices higher, and experts predict the trend will continue. Overall, frozen concentrated orange-juice futures in the US closed on Friday at $1.50 a pound (0.45 kilograms), which is nearly a 50% increase from early 2019.
“You have your classical supply-demand mismatch,” Shawn Hackett, president of Hackett Financial Advisors, which specializes in agricultural commodities analysis, told CNN. He warned that consumers should expect “much higher prices [for orange juice] at the supermarket.”
However, Brandon Saltmarsh, president of Florida-based HomeMaker Juice, told the Wall Street Journal that “the fundamentals do not support prices at these levels,” as “there's still too much juice in the world.”
According to the USDA, Brazil, one of the globe’s largest orange producers, is expected to harvest 12% more oranges this year despite the drought that damaged its crop yield in 2021. Mexico, the US’ major citrus supplier, is also forecast to have a robust harvest “on optimal weather conditions.”
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