Prices rise as orange crop yield fails to meet forecast

- Last updated on GMT

Related tags: Percent, Citrus, Orange

The USDA has reduced its forecast for all oranges for the 2004-05
season; meanwhile the crop fall is causing prices to rise,
reports Philippa Nuttall.

The department of agriculture said on Wednesday that the January forecast for all oranges was down three percent from the previous forecast and 25 percent below last season. The crop was forecast at 9.65 million tons.

Jorge Garcia-Pratts, a USDA statistician, explained to​ that the terrible storms last year are one of the key reasons for the high drop in the orange harvest. However, he added that before the atrocious weather hit, farmers had forecast that 2004/05 was going to be a bumper crop and this could be a further reason for the decline.

"Before a big crop the fruit tends to be smaller and this, in conjunction with the storms which stressed the trees, could be responsible for the reduced crop,"​ he explained.

However, he noted that this has not caused a shortage of fruit because there was a record production last year.

"Processors had a large inventory and are combining last and this year's crop,"​ he said, though noted that prices have been pushed above the norm."

"Prices are strong in California even though there is an ample supply of fresh oranges this season,"​ Susan Pollack, the agricultural economist specializing in citrus fruits at the Economic Research Service told​, adding that almost all of California's oranges go to fresh use and the state is the major supply of fresh oranges to the market.

Pollack noted that the big decline in oranges is from Florida, where about 95 percent of the fruit goes to making orange juice, and where growers are receiving better prices so far this season than last.

However, she added: "The increase is not as much as might be expected with the considerable loss of crop as very large juice stocks coming into this season - which began on 1 October - has kept demand for oranges lower than other years."​ Morover, Pollack said that demand for orange juice has been slow for the last few seasons with processors trying to drive down inventory before processing much more juice.

"While growers can average about $8 per 76-pound box for fresh oranges during an average season, they are not able to cover their production and transportation costs for those oranges they sell for processing."​ she said.

"As a result, growers averaged a loss of about $2 per box over the past two seasons, but they still market these oranges because they have already been harvested and they are trying to minimize their losses."

Florida's all orange forecast, at 162 million boxes (7.29 million tons), is down four percent from the December forecast and 33 percent below the 2003-04 season, according to the USDA. The production of early and midseason varieties has been reduced by two million boxes, to 84 million boxes (3.78 million tons), two percent less than the December forecast. Moreover, the average fruit size is the smallest since the 2000-01 season.

Florida's early-mid season harvest started late because of the smaller crop and lagging maturity level, meaning that approximately 60 percent of the crop is still to be harvested. The Valencia forecast is down by four million boxes to 78 million boxes (3.51 million tons), a reduction of five percent from the previous forecast, and this crop's average fruit size is one of the smallest in the last 20 years.

Meanwhile, the all orange forecast for California, at 60.5 million boxes (2.27 million tons), is two percent less than the October forecast but 16 percent higher than last season's final figures. The Navel orange forecast is down two million boxes from October at 44 million boxes (1.65 million tons) but 16 percent above last season.

California's Navel orange fruit size is large, but there are quality problems, with puff - a disease that makes the fruit taste sour and it look off-color - having been found in some fruits.

Garcia-Pratts added that it was too early to tell whether there would be any effect on next year's crop, but thought it unlikely as most of the trees damaged by the storm were older ones and therefore, he suggested would have likely been replaced in any case.

"There are too many variables to take into consideration at present."

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