Quote from Alex bobby on June 15, 2024, 3:07 AM

Orange juice prices have always fluctuated, dropping when there is an oversupply of oranges and spiking when frost or hurricanes damage the fruit trees. However, the current record-high prices for orange juice may persist due to ongoing issues such as diseases and extreme weather affecting orange groves in key producing countries.

Brazil, the world's largest exporter of orange juice, is expected to experience its worst harvest in 36 years due to flooding and drought, according to Fundecitrus, a citrus growers' organization in São Paulo state. "The concern isn't just that the price of juice is going up. The concern is not having the juice," stated Oscar Simonetti, an orange farmer in Mogi Guacu, Brazil.

In the U.S., Florida's already declining orange production dropped 62% in the 2022-23 season after Hurricane Ian further damaged a crop already struggling with an invasive pest. Spain also saw reduced orange production due to drought last year.

These supply shortages have driven prices up. In the U.S., the average cost of a 12-ounce can of frozen orange juice concentrate was $4.27 in April, 42% higher than the previous year. In the UK, where supplies are at a 50-year low, the price of fresh orange juice increased by 25% over the past year.

High prices are deterring inflation-weary consumers, leading to a 15% to 25% decline in orange juice consumption in major global markets, including the U.S. and the EU, according to Rabobank. Jonna Parker, a principal at market research company Circana, noted that consumers are increasingly turning to alternatives like energy drinks and smoothies for their morning fruit intake. "The price gets high and people consider other alternatives," she said.

Even before the current price hikes, global orange juice consumption was declining due to competition from other beverages and concerns about the sugar content in fruit juices. If this trend continues, it may help balance supply with demand and stabilize prices, though Rabobank expects limited supplies will keep prices high for some time.

In some regions, orange juice is disappearing from shelves. Last year, McDonald's in Australia replaced orange juice with an "orange fruit drink" containing 35% orange juice due to supply shortages. In Japan, Morinaga Milk Industry Co. plans to stop shipping its Sunkist brand orange juice by the end of June due to low supplies from Brazil. Megmilk Snow Brand Co. also halted shipments of its orange juice packs in April 2023.

Some companies are exploring alternatives. Coldpress, a British juice company, introduced a mandarin juice product in February, citing the high cost of juicing oranges. However, many major orange juice producers, including Dole, Tropicana, Florida's Natural, Uncle Matt's, and Coca-Cola, declined to comment on their plans.

The current supply issues have deep roots. In 2005, the Asian citrus psyllid arrived in Florida, infecting the state's orange trees with bacteria that slowly destroy the trees. This disease, known as citrus greening, has been devastating. Florida's orange production has plummeted from 200 million boxes in 2004 to less than 20 million this year.

Michael Rogers, a professor of entomology at the University of Florida, said no type of orange tree is fully resistant to citrus greening, though scientists are working on breeding more tolerant trees. In Brazil, where the disease also appeared around the same time, it has spread more slowly due to larger groves. However, Fundecitrus estimates that 38% of Brazil's orange trees had citrus greening in 2023.

Extreme weather, exacerbated by climate change, is another significant factor. Last year, Brazil experienced nine heat waves, reducing output and fruit quality. This year, the impacts of El Niño have led to severe drought in the Amazon and devastating floods in Rio Grande do Sul. "The temperatures are high during the day. At night the temperature drops. The plant can't stand this temperature difference," said Simonetti.

Brazil's 2024-25 harvest is expected to yield 232 million boxes of oranges, a 24% decrease from the previous year. "We have never seen a harvest like this," said Vinícius Trombin, coordinator of Fundecitrus' crop estimates survey.

To compensate for the smaller yield, some producers are considering blending oranges with tangerines to make juice, but Trombin is skeptical. "The consumer wants an orange juice made up 100% out of oranges," he said. Parker, however, believes that blends with other fruits might help reduce costs and renew consumer interest in orange juice. "The idea of multiple flavors is very popular and is a way to stand out," she said. "You've got to keep people engaged. Once you lose that interest, it's really hard to get people back."

The future of orange juice remains uncertain amid a complex mix of challenges. Ongoing diseases like citrus greening, coupled with extreme weather events exacerbated by climate change, are significantly disrupting production in major orange-growing regions such as Brazil and Florida. These issues are not easily resolved and suggest that high prices for orange juice may persist for the foreseeable future.

As supplies dwindle and prices rise, consumer habits are shifting away from traditional orange juice to alternative beverages, contributing to a decline in global consumption. This trend, driven by both economic pressures and health considerations, could help balance supply and demand, potentially stabilizing prices. However, the impact on the orange juice market is profound, with some products disappearing from shelves and companies exploring alternatives to pure orange juice.

Ultimately, the orange juice industry is at a crossroads, needing to adapt to ongoing challenges while finding ways to maintain consumer interest. Innovations in product blends and alternative fruit juices may offer a path forward, but the industry must stay responsive to changing consumer preferences and environmental conditions to navigate this uncertain landscape.