OJ Federal Marketing Order Considered

Ernie NeffMarketing

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OJ

The Indian River Citrus League (IRCL) recently reported on steps being taken to possibly create a federal marketing order for orange juice (OJ) to increase product demand.

As background, the IRCL noted that the Citrus Administrative Committee (CAC) for decades has administered Federal Marketing Order 905 regulating the grade and size of fresh Florida citrus. The same order authorizes assessments to conduct marketing programs for fresh fruit, but no ad programs have ever been initiated by the CAC. There is no similar federal order in place for juice oranges or juice products.

To initiate an OJ marketing order, the U.S. Department of Agriculture (USDA) requires an industry analysis and a determination of justification for a national program. This step has been taken by an industry review committee. The IRCL has two representatives on that committee, which was formed this season.

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An OJ marketing order would allow all U.S. fruit used in OJ and all orange juice imports to be assessed and share in the cost of marketing. The potential exists for larger OJ marketing programs, without Florida orange growers bearing the burden alone. Florida Department of Citrus (FDOC) advertising programs are paid for by Florida growers, but the programs benefit both Florida growers and foreign OJ exporters. Growers who see an inherent unfairness in this might appreciate a federal OJ promotion order.

A federal order, however, poses a potential downside for Florida juice orange growers. Since all juice solids will be taxed under a federal order, USDA rules will not allow ad messages to show a preference based on juice origin. “Drink Florida OJ” will not be a messaging option under a federal order.

The question becomes, does the ability to promote Florida OJ outweigh the extra money that can be put behind a larger marketing effort under a federal order? Besides the loss of Florida identification, some growers also fear loss of control under a federal order compared to having promotions conducted by the FDOC, which is overseen by the Florida Citrus Commission. In a federal order, USDA will oversee budgets and programs.

The draft order under consideration by the industry review committee provides for a governing board with a majority of the board being Florida orange growers. Six of 11 board members would be Florida growers.

If things don’t go well with the federal order, it only takes 10 percent of growers paying assessments to request a referendum to terminate the order at any time.

Florida’s 2020 Legislature enacted authority for the FDOC to share its staff with a federal promotion, research and information program should a federal OJ promotion order be enacted.

If Florida juice orange growers want to try a generic, origin-neutral campaign for OJ, they can ask U.S. Secretary of Agriculture Sonny Perdue to publish an order in the Federal Register and set up a referendum on the issue.

Although orange juice sales have surged during the COVID-19 pandemic, OJ sales had been in severe decline for years.

Source: Indian River Citrus League  

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