Hurricane Idalia, which made landfall in the US on 30th August, has caused concern for Florida's orange production. The unfolding impact of this hurricane is visible in the orange market, which consequently influences orange juice prices. The price of Orange Juice concentrate ICE NY [Mintec Code: ORJU] increased compared to the previous day, reaching a record price of $3.34/pound on 30th August.
Even before Hurricane Idalia's arrival, the outlook for Florida’s current orange harvest, despite being slightly higher than the 2022/23 marketing year (MY) crop, which USDA's final estimates have put at 15.85 million boxes, was diminished. Forecasts from market sources pointed to a yield of 20-25 million boxes for the 2023/24 MY, a stark contrast to the output of two years ago when the crop was twice its current anticipated size.
The impact of Hurricane Idalia will exacerbate an already challenging situation. Florida's orange crop has been grappling with a steady decline due to the debilitating effects of greening disease and recurrent hurricane events. Recovery from the aftermath of Hurricane Ian, which struck in September 2022, is ongoing and Hurricane Idalia will add to the challenges growers face.
Florida’s orange juice production within the US exceeds 90% of the total orange juice output in the country. The ripple effects of reduced crop production have also been seen in juice production, resulting in a 46.5% decline in orange juice production for the 2022/23 MY compared to the previous year, 61% below the five-year average. Drawing on their insights, market sources mention that this downward trend in juice production could continue into the upcoming 2023/24 MY and Hurricane Idalia will likely exacerbate the situation.
The current landscape of elevated orange juice prices is also the direct result of the constricted supply channels from Brazil, which are tightening global supplies. Global orange juice production for the 2022/23 MY has seen a downturn of 9%, with total production at 1.5 million tonnes. Read more on Global Orange Juice here