Private Forecaster Puts 2014-15 Florida Orange Crop at 50-Year Low

Randall Weiseman Citrus, Florida, Fruits, Specialty Crops

From UltimateCitrus.com:

NEW YORK (August 14, 2014) Wall Street Journal – A private forecaster is predicting Florida will harvest its smallest orange crop in 50 years during the next crop year, according to a report viewed by The Wall Street Journal on Thursday.

Elizabeth Steger, a closely watched independent forecaster, estimated Florida would produce 89 million boxes of oranges in the year beginning Oct. 1, according to the document. That would be a 15% decrease from the U.S. Department of Agriculture’s final 2013-14 estimate of 104.4 million boxes, which was the lowest output in 29 years. If the 2014-15 crop comes in as Ms. Steger has forecast, it would be the lowest production since 1964-65, when Florida’s output was just 82.4 million boxes. Each box weighs 90 pounds.

“That should certainly put a floor under the market and keep it there,” said James Cordier, president of brokerage Liberty Trading Group in Tampa, Fla. “What a number.”

Citrus greening, a bacterial disease that cuts off nutrients to fruit and causes them to drop from the trees prematurely, has been ravaging Florida’s groves. Florida is the source of most oranges used for juice in the U.S.

The first U.S. Department of Agriculture’s orange-production forecast for the next crop year won’t be released until October.

Orange-juice futures jumped as Ms. Steger’s forecast circulated among traders late in the day. Frozen, concentrated orange juice for delivery in September rose 2.5% to $1.4700 a pound, the highest closing price for the most actively traded contract since July 28, on the ICE Futures U.S. exchange.

“Should make for an interesting day tomorrow as more people get the number,” said Kevin Sharpe, a broker at Basic Commodities Inc. in Winter Park, Fla. “If she’s right on this number, wow, that’s crazy.”

The slide in production comes at a time when demand for orange juice is waning. U.S. consumers bought 36.11 million gallons of orange juice during the four weeks ended July 5, down 8.3% from a similar period a year ago, according to Nielsen data published by the Florida Department of Citrus. It was the lowest level of total sales since the four weeks ended Jan. 19, 2002, the oldest data available.

More variety in the juice aisle and rising orange-juice prices—partly the result of a smaller U.S. crop—have contributed to weaker demand, analysts said.

Supplies in storage are also tightening. During the month of June, the amount of frozen orange juice stored in the U.S. fell 14% from the same month in 2013, according to the USDA.