Orange juice prices currently continue to rise in the market amidst rising production costs and challenging fruit harvests. Generally, prices fall when crops are generous and rise when rainfall or complaints affect crops.
Orange juice, a breakfast staple for numerous families around the world, however, the current record-high prices could be a long-term issue due to ongoing problems in major orange-producing regions.
Declining Orange Juice Production From Devastating Harvests
Brazil, the largest exporter of orange juice, is facing its worst crop in 36 years due to severe flooding and failure, according to Fundecitrus, a citrus farmers' association.
In the United States, Florida's orange product has been hit hard. The 2022- 2023 season saw a 62 percent drop in the product after Hurricane Ian damaged crops formerly floundering with an invasive pest.
Additionally, the drought that Spain is experiencing has significantly reduced orange production. These climate and harvest challenges have contributed to the rising orange juice costs.
In the U.S., a 12-ounce can of frozen orange juice concentrate cost an average of $4.27 in April, which amounts to a 42% increase in price from the previous year.
Another region suffering from the increase in orange juice prices is the UK. Fresh orange juice prices rose by 25% over the past year due to 50-year low supplies.
Inflation-weary consumers are turning down orange juice due to high prices. Consumption has dropped by 15 to 25 percent in major markets like the U.S. and the European Union, according to Rabobank, a Dutch bank specializing in food and husbandry.
Global orange juice consumption was formerly declining due to competition from other beverages and health concerns about the sugar content of fruit. This trend could help balance force and demand, potentially precluding further price increases. Still, Rabobank anticipates that limited inventories will keep prices high for some time.
Impact on Rising Orange Juice Costs
The deficit is indeed leading to the exposure of orange juice to some retail shelves. McDonald's in Australia replaced orange juice with an "orange fruit drink" containing only 35% orange juice due to force issues.
In Japan, the Tokyo-based Morinaga Milk Industry Co. plans to stop dispatching its Sunkist brand orange juice by the end of June because of low inventories from Brazil.
Megmilk Snow Brand Co. also desisted shipments of its orange juice products in April 2023 and has yet to renew deals.
Some companies are exploring other options and alternatives as this problem persists. The British juice company Coldpress introduced an alternative, the mandarin juice product, in February, citing the high price of juicing oranges.
The root of the current problems dates back to 2005, when the Asian citrus psyllid, an invasive pest, introduced a bacteria to Florida's orange trees, causing citrus greening.
This complaint destroys the trees' root systems, leading to a slow death. Before the devastation happened, Florida produced 200 million boxes of oranges annually; this time, it will produce less than 20 million.
Future Outlook for Parents and Families
Extreme rainfall, aggravated by climate change, continues to impact orange crops. Last time, Brazil endured nine heat swells, which reduced fruit and vegetable quality.
This time, El Niño has caused major famines in the Amazon and severe cataracts in the southern state of Rio Grande do Sul. Fundecitrus expects Brazil's 2024- 2025 crop to yield 232 million boxes of oranges, down 24 from the former time.
To compensate for the lower yield, some directors are considering blending oranges with tangerines to make juice. Parker of Circana suggests that composites with other fruits might help reduce costs and renew consumer interest.
For parents, these changes mean it might be time to explore indispensable breakfast potables and ensure children get their diurnal vitamin C from other sources.
While the future of orange juice remains uncertain, being apprehensive of these shifts can help families acclimatize and make informed choices.
