Orange juice futures higher on citrus greening, a crop disease

Food , USA Nov 09, 2013 No Comments

Orange juiceIn its first Citrus report USDA citrus report of the crop year that began Oct. 1, the USDA forecasts that Florida growers would reap 125 million 90-pound boxes of oranges. That would be the smallest harvest since 1989-1990, when a freeze hit the state’s groves.

Orange juice futures jumped the most in eight months after the U.S. government said that Florida’s crop, the world’s second-biggest, will shrink 6.4 percent to the smallest since 1990 after a crop disease damaged groves.

Orange juice for January delivery climbed 5.3 percent to settle at $1.315 a pound at 1:49 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since March 8. Earlier, the price reached $1.3195, the highest since Oct. 1.

While growers welcome the higher prices, orange processors and juice producers could be in a tough spot if they want to pass on higher costs to the consumer. They are already struggling with declining demand for orange juice.

Annual U.S. retail sales of the juice have fallen to at least a 15-year low, according to Nielsen data released last month. Analysts have said that orange juice, once a breakfast staple, has lost ground to a greater variety of beverages and higher retail prices could turn off even more consumers.

Florida accounts for about 70% of U.S. orange production and is the source of almost 90% of the country’s orange juice supply.

via Orange-Juice Futures Surge Most in Eight Months on Crop Disease – Bloomberg & Low Crop Forecast Sends Orange Juice Futures Higher – WSJ

Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website

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