By Marisa L. Zansler
In May 2024, news of Brazil’s 2024–25 orange crop forecast declining from 307 million boxes to 232 million boxes — a 24% drop — sent frozen concentrated orange juice (FCOJ) futures prices to historic highs. The futures price reached $4.87 per pound solids on May 28 before settling at $4.22 per pound solids at the end of May.
In the United States, Florida OJ availability was down by 7% as of June 2024, further exacerbating the supply crisis. Record high futures and total OJ retail prices could hinder demand for 100% OJ. These shortages emphasize the need for strategic measures to foster demand and support the industry. Moreover, it underscores the importance of holistically supporting Florida’s orange industry during this critical period.
Florida’s processors rely on imports of frozen concentrated and not-from-concentrate (NFC) OJ to mitigate declines in domestic production. U.S. OJ imports increased from 298.8 million single-strength equivalent (SSE) gallons in 2005–06 to a projected 520.6 million SSE gallons during the 2023–24 season with an increasing share of NFC OJ imports. Despite these efforts, the gap between supply and demand has widened, leading to higher prices. The overall impact of this decline in domestic consumption has been pronounced.
RECORD HIGH FUTURES AND PRICES
From May 2019 to May 2024, FCOJ average monthly futures prices rose dramatically and affected market conditions in the United States. Initially, between 2019 and 2020, processors had surplus FCOJ, a consequence of multi-year import contracts post-Hurricane Irma. However, the COVID-19 surge in demand reduced juice inventories. This depletion of inventory, combined with subsequent declines in OJ production, triggered a sharp increase in futures prices.
Starting from a price of around $0.99 per pound solids in May 2019, the futures price began rising in mid-2020 with a significant acceleration from early 2022 onward, culminating in prices above $4.22 per pound solids by May 2024. This dramatic rise reflects the growing scarcity and heightened market demand for OJ in the face of reduced production and availability.
Similarly, prices at retail reported by NielsenIQ data have reached historic highs. From a Florida production standpoint, most of Florida’s processed oranges are used to make NFC OJ. Most OJ reaches consumers through retail channels. During the 2023–24 season, Nielsen data indicated that the price per equivalent gallon rose by 9.3%, reflecting high inflation and reduced promotional activity.
This resulted in an overall 13.4% decline in gallons sold. Sales declines were primarily experienced in the reconstituted category with over a 30% decline in gallons sold. At that point in the season, NFC OJ sales remained stable and slightly exceeded the previous season.
FOSTERING DEMAND
While addressing the supply side is crucial, fostering demand is an equally important component of protecting our industry for future generations of OJ drinkers. The long-term impact of higher prices on OJ demand remains uncertain, as it is influenced by fluctuating inflation, consumer perceptions and their willingness to pay. Educating consumers about OJ benefits can help sustain demand. Additionally, marketing campaigns that emphasize the freshness and quality of locally produced OJ can create a strong preference for domestic products over imported ones.
The global OJ shortage requires a comprehensive approach. By addressing supply challenges and supporting Florida’s citrus industry through strategic investments, promotion of consumer awareness and collaborative efforts, demand can be fostered to ensure the longevity of the citrus industry.
For example, highlighting health and wellness attributes of OJ, such as its vitamin C content, can serve to keep OJ top of mind. Leveraging scientific studies and endorsements from key influencers can reinforce these benefits, making it an appealing choice for health-conscious consumers, especially during periods when supporting an immune system is a top priority.
Supporting Florida citrus is crucial for the state’s economy. It sustains local agriculture, keeps agricultural lands in production and supports farming communities. This effort also highlights Florida’s role in food security. Marketing programs can maintain demand for OJ, contributing to a resilient food system and balanced supply-demand dynamics.
With these strategies, demand for OJ can be fostered amid global shortages, ensuring that consumers recognize its value as a healthy beverage and a product that supports local agriculture and food security. In this way, Florida’s citrus industry can continue to thrive and meet the needs of the American consumer.
Marisa L. Zansler is the director of the Economic and Market Research Department of the Florida Department of Citrus in Bartow.
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