Economic Perspectives on the 2021–22 Florida Processed Orange Season

Josh McGillEconomics

By Thomas H. Spreen

The timing of Hurricane Ian is not unlike that of Hurricane Irma in September of 2017 in that it struck before the U.S. Department of Agriculture (USDA) crop forecast was released in October, but after the data collection process was already completed for the forecast. Therefore, the USDA forecast will not take Hurricane Ian’s impacts into account until the first update of the season is released on Dec. 9. It will likely be even later before the full impact of the storm becomes clear. As such, this article takes a retrospective look at the 2021–22 season as we move forward in the 2022–23 season.

Figure 1. Brazil is the leading supplier to the U.S. orange juice market. Florida and Mexico’s share of the market is much less and nearly equal.
(Source: Economic and Market Research Department of the Florida Department of Citrus)

With tree numbers continuing to decline, the initial USDA forecast released in October 2021 for the 2021–22 season was that the Florida orange crop would be 47 million boxes. As the season progressed, a mild but destructive freeze struck in late January that caused some fruit damage. Given the mild weather that had occurred before the freeze, trees were already entering the bloom stage. Therefore, the freeze caused significant damage to emerging blooms. A strong dry period followed, so a second bloom did not materialize. This suggested that the 2022–23 crop would not be an improvement over its predecessor.

The final USDA estimate for the 2021–22 Florida orange crop was 41.05 million boxes. Approximately 2.6 million boxes were marketed as fresh, leaving approximately 38.45 million boxes for the processed sector. Approximately 4.2 million boxes were concentrated, and 34.25 million boxes were used for not-from-concentrate (NFC) orange juice. In other words, 89% of processed orange utilization went to NFC, far above the 80% seen in recent years.

HLB continues to have an adverse effect on juice yields. The 38.45 million boxes processed yielded only 188 million single-strength equivalent (SSE) gallons of juice. This implied overall juice yield was approximately 5 pounds solids per box.

At the same time, U.S. orange juice consumption remains relatively strong with NFC sales at retail outlets at just over 230 million gallons. With low Florida production, there was clearly a need to import from both Brazil and Mexico. Refrigerated orange juice from concentrate (RECON) sales at retail outlets were 123 million SSE gallons. Florida production was only 20 million gallons. Therefore, Florida supplied about 16% of the U.S. retail from-concentrate market. This figure does not include RECON consumption in institutional outlets.

Figure 1 depicts the share of the U.S. orange juice market supplied by Brazil, Mexico and the United States. The declining share supplied by the United States is apparent and largely due to the decline of Florida’s crop. In both 2017–18 (Hurricane Irma) and 2021–22, Mexico’s share nearly equals Florida’s share. With the looming impact of Hurricane Ian, it is likely that Florida’s share will decline even further.

There are several promising tactics that are being employed by Florida growers to help reverse the trend of declining production. These include individual protective covers for newly planted trees and the application of gibberellic acid with a low rate of 2,4-D in an attempt to decrease fruit drop in older trees.

In addition to development of an HLB-resistant tree, there remains a need for new grove investment. Incentives are needed to help defray the cost of new plantings. Incentives could and should come from public or private sources. The time is at hand for daring solutions to initiate a turnaround in the Florida citrus industry to capitalize on the demand seen at retail.

Thomas H. Spreen is professor emeritus in the Food and Resource Economics Department of the University of Florida and senior economic consultant in the Economic and Market Research Department of the Florida Department of Citrus.

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