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A Crop Crisis Is Squeezing the Orange Juice Market

A Crop Crisis Is Squeezing the Orange Juice Market

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Brazil and Florida, two of the world’s largest orange producers, are facing a supply crisis — and it is seriously juicing prices.

Disease and Disasters

The orange juice market is, well, concentrated. Roughly 80% of orange juice worldwide comes from Brazil, with the bulk of the remaining portion originating in Florida. Supply woes in both regions have dramatically influenced prices. 

Climate change is leading to increasing extreme weather events, including droughts and floods, which are weighing on agriculture all over the world. Oranges are no different. Between climate effects and an increasingly intense outbreak of a bacterial plant infection called citrus greening, Brazil’s orange production is being pushed to its lowest level in more than three decades.

Brazilian states São Paulo and Minas Gerais, which grow the most of Brazil’s oranges, could see as much as a 25% annual decline in this year’s yield, per estimates from citrus growers association Fundecitrus.

But it doesn’t look much better stateside. Florida’s crops have been blighted by citrus greening for decades. This ongoing infestation has brought the state’s annual production down from 240 million boxes 20 years ago to just 17 million boxes today, according to the Financial Times, citing the International Fruit and Vegetable Juice Association (IFU). As for Florida’s weather, increasing occurrences and intensity of hurricanes are also a problem for crops and growers.

Worth the Squeeze?

So what does this mean for consumers, investors, and American breakfast tables?

Prices have already gone up quite a lot. Frozen orange juice concentrate has jumped to more than $4 for a 12 oz can, nearly a two dollar increase from before the pandemic, according to Labor Department data.

With growers facing headwinds, prices could keep going up. As oranges and other commodities like cocoa suffer from similar weather-related challenges, it is a reminder of the significant impact climate can have on our food supply. To offset these high prices, manufacturers are exploring alternative fruits like mandarins, or blending orange juice with higher quantities of apple, pear, and grape juice.

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