2023-08-11 04:17:38
US orange juice prices have broken records in recent days following tropical storms and an outbreak of an insect-borne disease that has decimated crops in Florida.
Futures contracts for this product for September delivery were above $3 a pound on Thursday, more than a dollar from a year ago. Futures hit $3.20 at the end of July.
“There is a possibility that we have reached our highs, but there is still an option that we go to $3.50 or so,” said Jack Scoville, a farm markets analyst at Price Futures Group.
Crops in Florida, the world’s second-largest producing region after Brazil, were devastated last year by hurricanes Ian and Nicole.
To this has been added a serious outbreak of the plague called “Huanglongbing”, also known as yellow dragon disease or citrus greening.
The disease, spread by an infected Asian psyllid insect, causes trees to produce oddly shaped and bitter fruit, or death of the plant within a few years.
Since no insecticide is known to protect crops, “you basically have to kill the trees, uproot them and start from scratch,” Scoville explained.
The Department of Agriculture has predicted that US production will fall by more than a quarter, to 2.3 million tons, the lowest level in more than 56 years.
It is estimated that orange juice production will fall by almost 50%, to 85,000 tons, a record low, according to the federal agency.
Drought conditions in Brazil and Mexico have also translated into smaller harvests, according to Scoville.
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