This Year’s Citrus Crop May Bring Lower Prices To Florida Consumers, Growers

GAINESVILLE—Consumers may see a decline in orange juice prices at their grocery stores this spring, just as citrus growers around the state feel the effects of this year’s bumper citrus crop.

Florida’s citrus crop this year is 10 percent larger than last year, which should mean a small decline in retail prices in the next few months, said Tom Spreen, a professor of food and resource economics at the University of Florida’s Institute of Food and Agricultural Sciences.

“Because this year’s crop is larger, orange juice prices should begin a downward trend,” Spreen said. “We expect grower prices to decline because of the increased supply, and retail prices should fall somewhat as well.”

At the grove level, Florida’s citrus industry provides $1 billion of revenue to growers. Florida citrus is a $3 billion wholesale industry, which translates into $6 billion in retail sales on the consumer level, Spreen said. Ninety percent of Florida’s orange crop goes into orange juice production, most of which is consumed in the United States and Canada. Florida also produces 40 percent of the world’s grapefruit.

The large increase in this year’s citrus crop has resulted in fewer imports of orange juice, Spreen said. And international trade agreements such as NAFTA and GATT have not posed the immediate threat to Florida’s citrus industry as once feared. Because of reduced tariffs under GATT, Spreen said, Japan is now a large market for Florida grapefruit.

“In a few years, Florida should become a net exporter of orange juice, which hasn’t happened in a long time,” Spreen said. “The trade agreements in some ways have opened markets, particularly GATT, which has helped reduce tariffs and helped grapefruit exports.” Last year, high prices for Brazilian orange juice left the country with increased inventory, resulting in lower orange juice prices from Brazil this year and causing Florida’s prices to follow. But less production in Brazil this year opens doors for more orange juice exports from Florida growers, Spreen said.

“Florida is regaining its position as a leading citrus producer and is again important in the global marketplace,” Spreen said. “Consumer demand for orange juice remains high, and that’s good for growers.”

But grower prices may continue to decline because of the potential for larger crops in the future, Spreen said. The 1980s saw high citrus prices due to freezes damaging the state’s citrus crop. The high prices caused growers to plant more trees, which are now coming into production and increasing supply. Growth and increased production since the ’80s has caused lower prices for growers, Spreen said.

In the past, winter freezes have provided a natural method of correcting for over production. But today’s growers have better production methods and are located farther south, so weather is less likely to correct any problems with increased supply.

“The industry is entering a period never seen before with the increased importance of export markets and reduced probability of a supply-reducing freeze,” Spreen said.

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• Sylvia K. Beauchamp