For many American consumers, the juice may no longer be worth the squeeze.
Prices for orange juice futures recently topped $3 per pound, up from $1.81 per pound last year. While there is typically a lag between these prices and the tag you see in the store, this could be an early sign that orange juice prices will increase in the coming weeks.
Rising prices for OJ are the result of several factors: two hurricanes, a late freeze last fall, and a deadly disease known as citrus greening.
OJ Prices Spike
Groves in Florida, traditionally the largest orange producer in the US, were hit hard by Hurricane Ian and Hurricane Nicole last fall. An unexpected harsh freeze late in the season damaged them further. To add to the perfect storm, a disease called citrus greening, which cuts off key nutrients to orange trees, is spreading rapidly through the state.
The US Department of Agriculture initially estimated that Florida would only produce 20 million boxes of oranges this year, a 51% decline from last year and the smallest amount produced since the mid 1930s. As of July, the forecast has fallen even further to a mere 15.9 million boxes.
To compensate for the orange shortage, the US has been increasingly importing citrus fruits from international markets like Brazil and Mexico. However, considering those countries are dealing with extreme weather, too, it may do little to stymie the trend.
Keeping all of this in mind, it’s important to remember pricing depends on demand as well as supply. Considering orange juice isn’t necessarily a winter staple, the dropoff in demand in the coming months could help stabilize the price.
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