Orange Juice Prices Soar, and May Stay That Way

This year's orange harvest in Brazil, the world's largest exporter of orange juice, is projected to be the worst in 36 years due to severe flooding and drought.

Orange juice prices have historically been volatile, fluctuating with the supply of oranges affected by factors like weather and harvest yields. However, the current price surge might persist due to the persistent challenges of diseases and extreme weather affecting major orange-producing countries. 

In the U.S., Florida's orange production dropped by 62% in the 2022-2023 season. Similarly, drought has significantly reduced Spain's orange production. These supply shortages have led to soaring prices. In the U.S., the price of a 12-ounce can of frozen orange juice concentrate increased by 42% to $4.27 in April compared to the previous year. In the UK, the price of fresh orange juice rose by 25% over the past year, with supplies at a 50-year low.

The root cause of these supply issues dates back to 2005 when the Asian citrus psyllid, an invasive pest, spread citrus greening disease in Florida, devastating orange trees. Brazil, which also faces this disease, has seen it progress more slowly due to larger groves, but it still affects a significant portion of their crop.

Climate change is exacerbating these problems, with extreme weather events like heatwaves and the impacts of El Niño causing further damage. Brazil's upcoming 2024-2025 harvest is expected to produce 232 million boxes of oranges, down 24% from the previous year. 

Producers are considering blending oranges with tangerines to make juice to compensate for the lower yield, though consumer preference for 100% orange juice remains strong.