Agronometrics Shorts: US Market Faces Tight Orange Supplies in the Wake of Hurricane Idalia

Hurricane Idalia, which made landfall in the US on August 30th, has sparked concerns within the Florida orange industry. Florida faces the prospect of potential shortages due to its reduced crop, which has led to price escalations. The average daily prices of oranges in the US rose by 5.10% in week 36. This year’s orange harvest in Florida was already anticipated to be approximately half the size observed two years ago, primarily due to the prevalence of diseases and volatile weather patterns. Ongoing recovery efforts from the aftermath of Hurricane Ian in September 2022 persist, and the emergence of Hurricane Idalia further amplifies the predicaments confronting orange growers. Florida accounts for over 90% of the nation’s orange juice production, and the diminished crop output has resulted in a substantial 46.5% reduction in orange juice production for the 2022/23 season compared to the previous year, a figure that stands 61% below the five-year average. Market experts suggest this decline in juice production may persist into the forthcoming 2023/24 season, with Hurricane Idalia anticipated to exacerbate the situation. Additionally, the elevated orange juice prices can be ascribed to limited supplies coming in from Brazil, further tightening global supplies. Global orange juice production for the 2022/23 season has witnessed a notable 9% downturn.