US: small orange harvest forces juice prices up
Weather a factor in cost's upward creep
The price for orange juice is juiced these days, with hurricanes and plant disease in Florida the primary culprits. Orange juice prices have risen for more than six months. As of Feb. 17, it was $5.76 a gallon, 24 percent higher than a year ago, and was poised to go higher. At Save Mart on Monday, a gallon of Minute Maid orange juice was $6.99. Bayview Farms juice was on special for $4.29 a gallon.
The chief executive officer of a Florida citrus growers group said high prices were inevitable because this year's orange harvest fell about 8 million boxes short of expectations. In a peak year, about 200 million boxes are harvested. This year, Florida produced about 140 million.
"In the last two years, we've had four major hurricanes that literally ripped through the heart of the citrus-growing area in Florida," said Michael Sparks of Florida Citrus Mutual, a trade organization of almost 10,000 citrus growers. Looking ahead, he said, there's good news and bad news. The good is that the price increases from this year's harvest appear to be over.
The bad? That prices don't appear to be headed down anytime soon, he said. "This is probably a new normal," Sparks said, explaining that some economists think the price could rise further in future years if orange growers continue to have problems with weather, disease and loss of orchards to residential development.
California orange growers produce most of their fruit for the fresh market, not juice. Still, Sparks said, the freeze California growers experienced in January didn't help the situation. Prices for fresh oranges may be higher, said Bob Blakely, director of grower services for California Citrus Mutual, but the freeze helped contain prices for concentrate.
Because growers knew their fruit wouldn't be edible, he said, many of them shifted their crops to concentrate. "A lot of juice is imported from Brazil now," he said. "It helps some, but worldwide, there's been a reduction in orange production."
Americans buy about $3 billion worth of orange juice annually from grocery stores and other mass retailers, according to market research firm ACNielsen, which provides the average price data. That's down by more than 10percent from four years ago. Chris Waldrop, director of the Food Policy Institute at the Consumer Federation of America, said Florida's orange problems have been ongoing, but consumers didn't feel them until recently.
"If you see a continuation of higher prices, then companies may try to look for other sources," he said, but prices are unlikely to change in the near future. Higher prices for orange juice aren't just at the grocery store. Smoothie fans are feeling a citrus pinch. Smoothie chain Jamba Juice has instituted a "brr-charge" of 25 cents for smoothies with orange juice as an ingredient, and 35 cents for straight orange juice.
An official representing Jamba Juice said the San Francisco-based company gets its oranges from California and Florida. The charge will remain in effect until supplies improve, according to the company.
The charge didn't bother Laci Leal of Modesto. She said she buys Jamba Juice smoothies with orange juice for her two children, Gabriella Cervantes and Michael Marchant, several times a week. "It helps them get their dose of fruit for the day, and I think I can handle an extra quarter," said Leal, 25.
