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Florida Orange Crop Seen Heading For Longest Slide In A Century

Published on Oct 11 2016 1:00 PM in Supply Chain tagged: Trending Posts / Florida / orange juice / USA / Hurricane Matthew

Florida Orange Crop Seen Heading For Longest Slide In A Century

Mother Nature continues to apply relentless pressure on Florida’s citrus growers.

Orange output in the state is poised to drop a fifth straight season, the worst slump in more than a century, a Bloomberg survey showed. Even before Hurricane Matthew threatened to damage groves over the weekend, output was already waning after excess rains early this year and the continued impact of crop disease.

Conditions have gotten so bad that some growers are giving up on the fruit. Acreage has declined to the lowest since 1966, data from the U.S. Department of Agriculture show. The infestation of a disease-spreading bug over the past decade has increased production costs and hampered output as farmers battle citrus greening.

In the 12 months started Oct. 1, the state will collect 63.18 million boxes of the fruit, according to the average of 10 analyst estimates in a Bloomberg survey. That compares with 81.5 million boxes collected in the prior harvest, according to the USDA’s July estimate. A box weighs 90 pounds, or 41 kilograms.

The agency will update its forecast on Oct. 12 and release its first outlook for 2016-17 growing period. A fifth annual output drop this season would mark the longest decline since at least 1912-13, when the data begins.

Prices Surge

Orange- juice prices have surged 39 percent this year on ICE Futures U.S. in New York. Citrus greening has also hurt fruit production in Brazil, the world’s biggest producer of the beverage. Florida is No. 2.

Hurricane Matthew brought torrential rains to Florida and other parts of the U.S. Southeast over the weekend. Because of the storm’s path, orange groves probably escaped major damage, but it isn’t yet known how much fruit has been blown off trees amid the strong winds, said Andrew Meadows, a spokesman for Florida Citrus Mutual, the state’s largest grower group.

The USDA report this week probably won’t account for damage from Matthew, John Ortelle, the vice president for McKeany-Flavell Co. a brokerage in Oakland, California, said by e-mail.

The storm was the latest weather problem to assail the citrus groves. During the spring, rains caused “heavy reductions” to output after fruit fell off trees during the post-bloom period, said Judy Ganes-Chase, the president of J. Ganes Consulting in Panama City, Panama. She estimates the crop at 65.6 million boxes.

“My estimate may be conservative, too high,” given the shrinking acreage and falling numbers of productive trees, Ganes-Chase said by e-mail.

Still, there may be a floor to dropping output because growers are using their “best strategies to strengthen trees against” the greening disease, including increased use of pesticide, McKeany-Flavell’s Ortelle said.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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