Orange juice is about to get more expensive. Here’s why.

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Florida’s already small crop is getting smaller

If you’re in the habit of pouring a glass of orange juice for breakfast each morning, then breakfast is about to get more expensive.

The U.S. Department of Agriculture’s (USDA) forecast for the 2023 growing season predicted Florida’s orange crop would suffer a 51% decline. By midyear, USDA reported the decline in output was even worse – only 15.9 million boxes instead of the estimated 20 million.

Citrus growers are battling disease, specifically citrus “greening,” which USDA describes as one of the most serious citrus plant diseases in the world.

“Once a tree is infected, there is no cure,” USDA says on its website. “While the disease poses no threat to humans or animals, it has devastated millions of acres of citrus crops throughout the United States and abroad.”

Greening is spread by a disease-infected insect, the Asian citrus psyllid. Infected trees produce fruits that are green, misshapen and bitter, unsuitable for sale as fresh fruit or for juice. Most infected trees die within a few years, according to USDA.

Financial markets have taken note

The problems in the Florida citrus industry are now reflected in the orange juice futures markets as expected shortages are driving up prices. Those higher futures prices should soon start showing up in both wholesale and retail prices.

Food costs are already a burden for many consumers. The July Producer Price Index (PPI) for food and feed jumped 1.4%. The Consumer Price Index (CPI) rose 0.2% last month, with overall food costs at the retail level 4.9% higher than a year ago.

Florida’s orange crop problems are being complicated by smaller crops from exporting nations. Both Brazil and Mexico, which export oranges to the U.S., are also dealing with smaller crops.

All of this is bad news for orange juice lovers but economists suggest price increases could be limited if there is reduced demand. As prices rise, many consumers may balk at paying them and instead seek cheaper substitutes. Falling sales at the supermarket could ultimately keep rising prices in check.

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