Orange juice prices are expected to soar in 2022 after inclement weather and citrus disease constrained the supply of oranges in the U.S. while demand surged during the pandemic, CNN Business reported.
Frozen orange juice futures climbed over 50% during the COVID-19 pandemic and reached a two-year high in January, according to CNN Business.
“You have your classical supply-demand mismatch,” Shawn Hackett, president of Hackett Financial Advisors, told CNN Business. This supply-demand conflict will cause consumers to see “much higher prices at the supermarket.”
The United States Department of Agriculture expects Florida to produce 44.5 million boxes of oranges in 2022, the lowest figure since 1945 when the Sunshine State harvested 42.23 million boxes.
Florida oranges make up a majority of the country’s orange juice supply, and the crop’s supply has been shrinking in recent years, Judith Ganes, president of J Ganes Consulting, told CNN Business. Florida oranges have reportedly been impacted by an insidious citrus disease known as citrus greening, which causes smaller oranges and less fruit per tree.
“The disappointment of another decline in the forecast is hard to overstate,” Shelley Rossetter, assistant director of global marketing at the Florida Department of Citrus, said, according to CNN. Rossetter said that orange farmers are focused on developing remedies for citrus greening.
Smaller oranges produce less juice, Ganes told CNN. Juice producers, who already paid a premium due to supply disruptions, now must buy more oranges to produce enough juice, placing the price increase on customers.
The orange industry has also experienced surging demand since the beginning of the pandemic, Hackett said, adding that demand before the pandemic was at a 20-year low.
U.S. sales of 100%, non-concentrated juices increased from $5 to $5.5 billion in 2020, and they stayed relatively unchanged in 2021, according to CNN Business.
“We’re still dealing with demand today that’s well above what it was in 2019, before the pandemic hit,” Hackett told CNN. “So we have this renewed demand at a time that are available supplies are way, way down.”
U.S. consumers have experienced soaring prices, with inflation growing at its fastest pace in nearly four decades in the last few months. The consumer price index increased 7% in December 2021 on a year-over-year basis, the steepest growth since 1982. Meanwhile, the cost of food at home grew 6.5% compared to the previous year as of early January, the U.S. Bureau of Labor Statistics said, while prices at restaurants increased 6%.
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