US orange production hit by disease, juice prices soar

A citrus disease spread by a tiny insect has devastated Florida's orange crop, which is expected to be the worst in nearly 30 years, and sent juice prices soaring on New York markets. The culprit? The gnat-sized Asian citrus psyllid, which is infecting citrus trees across the Sunshine State with huanglongbing, or citrus greening disease, which causes fruit to taste bitter and fall from trees too soon. "It feels we are losing the fight," said Ellis Hunt, the head of a family-run citrus farm spread over about 5,000 acres (2,000 hectares) in the central Florida town of Lake Wales. The deadly bacteria has slashed his annual production over the past few years from one million boxes of fruit to 750,000. Citrus greening disease has become such a problem this year that the US government has lowered its forecast for the upcoming harvest four times. The latest figures, published earlier this month by the US Department of Agriculture, predict production of 110 million boxes of fruit, or roughly 4.95 million tons. That is 18 percent less than last year, and the lowest since 1985, when citrus groves were hit by a deep freeze. It is also far from the record 244 million boxes collected in 1998. The outlook surprised investors, as the USDA forecast dip was "bigger than the trade had anticipated," according to Joe Nikruto, senior market strategist for RJO Futures. Following the release of the latest USDA figures, the price of frozen concentrated orange juice rose to its highest point on the Intercontinental Exchange in New York since late March 2012. Juice for May delivery, the most traded, rose seven percent in three trading sessions to $1.67 a pound. The price has also been driven by drought in Brazil, the world's top producer of orange juice, but Nikruto explained: "The USDA numbers are fueling this fire." - Putting juice back on breakfast table - On his Florida farm, Hunt is fighting the good fight but all the insecticide, fertilizer and extra minerals in the world don't seem to be helping. "We spray at least every four weeks... but we are not keeping pace with the spread," he said. Some small growers have practically abandoned their trees, as the rise in prices will not make up for their production shortfalls. Authorities are scrambling to help the citrus industry -- which generates $9 billion a year in Florida alone and employs 76,000 people -- stay afloat. Millions of dollars have been poured into research on ways to battle citrus greening disease. Of course, experts are bearing in mind that spreading bacteria-fighting chemicals on 70 million trees across 530,000 acres would be no easy task. "We will witness replanting and increases in production within the next three to five years," said Daniel Sleep, an official in the Florida Department of Agriculture and Consumer Services. "With the vast array of resources that have been committed, no other outcome seems possible." But once the immediate crisis is averted, another problem looms: how to convince American consumers to put orange juice back on their breakfast tables. The United States remains by far the world's top consumer of the drink, but that consumption has dropped by 30 percent since 2003. Why? Grocery store shelves are loaded with other beverage options, including diet sodas and flavored waters with lower calorie counts for weight-conscious Americans. "Juice is often associated with breakfast and as our society changes, we rush ourselves a little bit and we have a tendency to skip it," Sleep noted. The juice-breakfast link is however helping to keep prices from going up too much, Nikruto says, as it is difficult to "charge more for a product that people are demanding less every day."