To maintain a surge in orange juice sales linked to the coronavirus pandemic, the Florida Department of Citrus (FDOC) is looking to boost marketing, which could result in a higher tax for growers.
On June 17, the Florida Citrus Commission, the governing body of the FDOC, directed staff members to map out a $10 million marketing plan that could require an increase in what is known as a “box tax” that helps fund marketing efforts. The tax could go from 7 cents to 12 cents for each 90-pound box of oranges that growers fill.
“We have a stick in the sand, so to speak, and a place for staff to begin developing plans,” said commission member Dan Casper, who is president of U.S. Sugar subsidiary Southern Gardens Citrus. “Hopefully, the crop will come in as we need it to, and demand will increase, and prices will as well.”
The commission will revisit the spending plan and finalize the box tax number in October, after the U.S. Department of Agriculture makes its first forecast for next growing season.
The Florida Department of Citrus is basing its box-tax revenue projection for next growing season at 67.65 million boxes of oranges, 4.89 million boxes of grapefruit and 1.02 million boxes of specialty crops. Those numbers reflect the June forecast for the 2019-2020 season, which will have its final count in July.
Florida Citrus Commission member Steve Johnson, owner and general manager of Wauchula-based Johnson Harvesting, Inc., said the state’s orange harvest projection for next season may be too high.
“Realistically, I think we need to be looking at this around 60 million (boxes),” Johnson said.
The marketing plan would help increase the department’s revenue from $15.445 million in the current fiscal year to between $19.875 million and $21.875 million.
Staff members proposed several scenarios to increase marketing, including a 114 percent jump to 15 cents per box.
About 95 percent of Florida’s orange crop is processed into juice, which for more than a decade has seen sales decline. When the coronavirus pandemic took hold in March, the FDOC found about 40 percent of consumers who hadn’t been drinking orange juice had added it to their shopping carts because of the virus. That number has dipped to about 25 percent in a more recent survey.
“Thirty-seven percent of those indicated that they purchased more orange juice because they wanted to support a healthy immune system that had Vitamin C,” FDOC Economic and Market Research Director Marisa Zansler said. “Fifty-eight percent of people are still stocking up on food and beverage items when they’re going to do their grocery shopping. And 5 percent are having breakfast more often at home.”
Meanwhile, among people whose purchases of orange juice has slacked off during the crisis, 24 percent indicated the product wasn’t available, which Zansler said isn’t unusual given the industry’s current supply-chain issues. Another 23 percent switched to beverages with longer shelf lives, while 13 percent pointed to the cost of orange juice.
The FDOC’s budget includes 3 percent raises for employees, which is contingent on a line item remaining in a proposed state budget (HB 5001) that was sent to Gov. Ron DeSantis.
Source: News Service of Florida