The price of orange juice is about to go up even more thanks to a perfect storm of issues.
Last week the U.S. Department of Agriculture forecasted the Florida orange crop would produce 44.5 million 90-pound boxes, coming in at 16 percent less than last season's crop. If the forecast is correct, this will be the smallest harvest since 1945. The big reasons for the small harvest? Disease and weather. Florida, which produces the majority of the oranges used for juice production, has been experiencing citrus greening, a disease that impairs a citrus tree's ability to properly mature, typically resulting in smaller and sour tasting fruit.
Demand for orange juice saw a slight bump in the last two years, buoyed by the pandemic, which gave way to higher than normal orange juice prices. With the supply issues of the 2021-2022 crop, the cost of orange juice will likely continue to climb.
"You have your classical supply-demand mismatch," Shawn Hackett, president of Hackett Financial Advisors, told CNN.
According to the Wall Street Journal, frozen concentrated orange-juice futures ended Friday at about $1.50 a pound, up roughly 50% since the pandemic began. Commodity Futures Trading Commission data indicate hedge funds and other speculators in recent weeks have boosted their bets that prices will continue to rise.
