Orange juice futures fall as USDA pegs Florida crop higher than feared

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In Florida, some citrus-growing areas faced peak wind gusts between about 60 and 80 miles per hour during Hurricane Irma. As a result, total citrus losses are expected to exceed $760 million, the state’s agriculture agency announced Oct. 4.

Florida’s orange crop production peaked about 15 years ago due in part to “citrus greening” disease. Last year, a study by the University of Florida estimated between 80 and 90 percent of the state’s citrus acreage was infected by citrus greening, which is spread primarily by an insect the size of a grain of rice.

Major citrus growing regions of California also are fighting against citrus greening, which is formally known as huanglongbing.

In California, the orange crop also has suffered due to weather-related impacts. Heavy rains in the spring helped end the state’s historic drought in most agricultural regions but also caused loss of blooms. Also, the citrus trees continue to feel the impact of years of drought conditions as well as salt accumulation in the irrigation water.

The USDA forecasts the California navel crop will be down 11 percent from last season’s final total. California’s navel crop represents around 40 percent of the state’s total citrus production.

Due to the smaller crop in Florida and California, some are predicting higher prices for oranges this season at the nation’s supermarkets. California’s orange crop is primarily sold to the fresh market although a small portion gets processed for other purposes.

“The California citrus crop is smaller than it’s been in the past five or six years,” said Joel Nelsen, president of the California Citrus Mutual, which represents more than 80 percent of the state’s citrus industry. “We’re attributing that to two things: the rain in the spring knocked off a lot of blossoms and … trees are still tired from the drought.”

Still, Nelsen expects there will be enough mandarin and California navel oranges to meet demand for the winter holidays but prices will be higher due to Florida’s woes.

Nelsen, who spoke to CNBC on Wednesday, added: “The unfortunate situation in Florida has reduced what little fresh tonnage they had in terms of oranges, so our prices are going to be a little higher this year.”



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