Citrus greening cuts Florida orange forecast to lowest since 1990

Brazil , Commodities , Food , Orange , USA Dec 26, 2013 No Comments

Citrus greeningOrange juice futures are expected to rise after a widespread citrus greening disease, more properly known as Huanglongbing or HLB, in Florida is causing fruit to drop early. Orange juice futures in New York will rally 18 percent to $1.6465 a pound by the end of June, up from $1.3945 today, according to Bloomberg.

Citrus greening is a bacterial disease carried by an insect, first discovered by farmers in China in 1911 and made its first appearance in Florida in 2005. It is spread by a tiny insect called the Asian citrus psyllid that feeds on the trees, leaving bacteria that starve the tree of nutrients. Infected trees produce fruits that are unsuitable for sale as fresh fruit or for juice and most die within a few years.

“This is the worst we ever had to deal with. Young trees can’t develop strong roots, and the quality of the fruit is also affected. We have been able to slow the spread of the disease, but not eradicate it.”

Futures entered a bull market this month as dry weather compounds the damage from citrus greening. Some types of oranges, including early and mid-season varieties, are projected to drop prematurely from trees at the highest level since 1961.

In its Dec. 10 Crop Production report, the USDA indicates that the United States all orange forecast for the 2013-2014 season is 7.78 million tons, down 2 percent from the previous forecast and down 7 percent from the 2012-2013 final utilization. The Florida all orange forecast, at 121 million boxes (5.45 million tons), the fewest since 1990, is down 3 percent from the previous forecast and down 9 percent from last season’s final utilization.

Early, midseason, and Navel varieties in Florida are forecast at 56.0 million boxes (2.52 million tons), down 3 percent from the previous forecast and down 17 percent from last season. Current droppage is projected to be the highest since the 1960-1961 season. The Florida Valencia orange forecast, at 65.0 million boxes (2.93 million tons), is down 3 percent from the previous forecast and down 2 percent from last season’s final utilization. California and Texas orange production forecasts are carried forward from November.

The federal government is joining the battle against the disease that may have impacted as much as 75% of Florida‘s citrus crop. The USDA is forming a multi-agency emergency response framework to battle the disease, and hopefully come up with a cure.

A University of Florida researcher has mapped the DNA genome of a new strain of citrus greening that could further threaten Florida’s beleaguered $9 billion citrus industry. Knowing the genetic makeup of the various strains is critical to finding a cure.

Dean Gabriel, a plant bacteriology specialist, helped sequence and map the genome of the most prevalent form of the disease in Florida, and now he and colleagues have done the same for a new strain of the disease discovered in Brazil.

Production of oranges in Brazil will climb 8.5 percent to 435 million boxes in the 12 months ending June 30, 2014, from a year earlier, and juice output will jump 18 percent, the USDA’s Foreign Agricultural Service said in report Dec. 16. Yields will rise 12 percent.

Brazil could take care of any shortfall we may have in production,” said James Cordier, founder of in Tampa, Florida. “While the U.S. crop is the smallest we’ve seen in many years, sales at the retail level are still sluggish.”


Pascal Blanc

Pascal has implemented numerous software solutions in the areas of procurement, sourcing, spend management, supplier evaluation and performance. His clients include Fortune 500 companies in Europe, Asia and North America. He is a co-founder of Source & Procure.

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