Florida citrus growers are bracing for Wilma

Juice futures rise with prospect of even more hurricane damage

October 21, 2005|By MEREDITH COHN | MEREDITH COHN,SUN REPORTER

The $9 billion Florida citrus industry, battered by a series of hurricanes a year ago, is bracing for destructive winds and rain from Wilma.

Even as it was downgraded to a Category 4 storm, Hurricane Wilma was still packing a potential punch this weekend - big enough to propel the futures trading price of orange juice near a six-year high. Most orange juice in the United States comes from Florida oranges.

Last year, Florida lost more than a fifth of its crop from hurricanes. The losses cut into the reserves used to keep store shelves stocked in the off-season.

FOR THE RECORD - The caption for a photo illustrating hurricane damage to the Florida grapefruit crop in yesterday's business section should have indicated that the picture showed damage resulting from last year's storms, rather than last month's.
The Sun regrets the error.

For consumers, the result has been higher prices. A gallon of juice at the grocery has risen 7 cents this year. Coupled with a smaller crop from Brazil, the world's leading producer of juice oranges, and higher energy costs, Florida agriculture officials expect the prices to rise at least another 10 cents a gallon this year.

Online grocer Peapod, which serves Giant Food, listed a gallon of orange juice yesterday at $3.99 for Giant brand from concentrate, up to $6.99 for Tropicana Pure Premium.

Andrew Meadows, a spokesman for the Florida Department of Citrus, the state's marketing and research arm, said the increase in the past year has been about 1.5 percent, less than the average annual increase in food prices over the past decade of 2.7 percent.

"Consumers only see the price is up, so that's a challenge for us," he said. "We don't need any more challenges. We are not looking forward to Wilma."

Ellis Hunt Jr., a Florida citrus grower who lost much of his crop last year to three hurricanes, said there wasn't much he could do to protect his 5,000 acres in central and south Florida.

Hunt was monitoring the path of Wilma on the Internet and television.

With the oranges and grapefruit just about ready for picking, he said, they are big enough to hang on to the trees under some winds.

"But not 100-mile-per-hour winds," he said from his family groves in Lake Wales in the central part of the state.

"Last year, 80 percent of the grapefruit was blown off the trees and lost. Fifty percent of the oranges on the groves in the path of the storms were lost," he said. "For this storm, the fruit is just about ripe, and everybody has already spent all their money to raise their crops. It could all be lost."

Before news of the hurricane, things were looking up. The orange crop estimates for this year were rebounding.

This season, which began this month and runs to late May, was expected to produce 190 million 90-pound boxes of oranges, up 27 percent from last year's 149 million boxes, the lowest number since the 1991-1992 growing season, according to the Department of Agriculture.

That's still below the average annual take of 210 million to 220 million boxes that growers had logged in the years before the storms.

About 90 percent of Florida oranges are made into juice, some 1.2 billion gallons, which is sold in the United States and exported to several other countries.

Also encouraging growers was Americans' return to fruit juices. Diets such as Atkins' and South Beach had put people off high-carbohydrate juices, said Casey Pace, a spokeswoman for Florida Citrus Mutual, a trade group representing 10,000 growers.

"A couple of weeks ago, we weren't worried about availability of orange juice," Pace said. "Now we don't know."

Terence McElroy, a spokesman for the Florida Department of Agriculture, said Wilma could bring another problem: Canker disease. Canker is not treatable and requires infected citrus trees and all those within 1,900 feet to be chopped down. It's spread in rainy, windy conditions.

The disease was almost eradicated last year among the state's 800,000 acres of citrus groves and more than 100 million citrus trees.

Hurricanes helped it and at least one other disease, called greening, make a comeback. Wilma could spread them further or flood the trees for an extended period, which can also kill them.

Justin Marsling, a managing editor for markets at the Food Institute Report, an independent food industry publication, said oranges and grapefruit groves both suffered greatly last year because of hurricanes that cut a swath across southeast Florida, where one-third of those crops are grown. Tomatoes, also grown in Florida, fared better last year.

He, like others, was tracking the storm - and the futures' prices for the fruit possibly in the cross hairs.

Orange prices went up 6 percent this week on news of Wilma and 20 percent since the beginning of September when other hurricanes came close. The price closed down about 1 cent yesterday to $1.108 for a solid pound, which equals about a gallon of juice.

Juice hit a high on Wednesday at $1.145 when the storm looked like it would make more of a direct and ferocious hit on the Florida groves.

"Everything having to do with Wilma now is speculative," Marsling said. "We still don't know if it will follow the course they are predicting. And if it does, what the impact will be."

meredith.cohn@baltsun.com

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