SEBRING - Frozen concentrated orange juice futures have gained 11 percent this year on the commodities market.
"The key factor is supply," CNBC reported Friday. "U.S. production has been decreasing for years due to a citrus greening disease in Florida, the second-largest producer of orange juice in the world after Brazil."
That market gain came four days after the USDA again cut its projection of the 2013-14 Florida orange crop to 114 million boxes, and estimated the Valencia orange drop at 26 percent. One problem: fruit is falling off the tree before it's ripe enough to be picked. Florida's $9 billion a year citrus industry is at risk.
Five years ago, Florida growers picked 162.5 million boxes. Because of insects and other factors, the crop has been reduced 29 percent in four years. Will the decline continue?
"That is the $64,000 question," said Ray Royce, executive director of Highlands County Citrus Growers Association. "There are folks that are concerned we could continue to see trends even closer to 100 million boxes."
However, he's in the other camp. "We feel it has stabilized. We're seeing significant resetting and replanting. We're figuring out how to deal with greening, and we may see the crop jump. Will it go all the way back to 160 million boxes? Absolutely not."
Greening is caused by the Asian psyllid, an almost microscopically small insect that injects bacteria into a citrus tree as it munches on new leaves. Experts think that infection distresses every part of the tree from root to leaf. Fruit, for instance, may ripen on one side and not on the other. Greening fruit tastes bitter.
The industry suspects greening is likely behind fruit drop. Greening could be why fruit is smaller this year.
However, Royce speculates that the smaller fruit size this year "may very likely be caused by climatic conditions." Even though normal rainfall was recorded last year, at critical periods in the growth cycle, trees didn't get timely rain, he said. Those two-inch gully-washers don't help as much as the infrequent half-inch soakers.
Interestingly, today's trees are filled with fruit. But look closer - and the USDA surveyors did just that - and they realized it will take 242 oranges to fill a 90-pound box.
So labor may cost more this year, Royce said. "Here's the problem. If a laborer has to pick 242 pieces to make a box, and it's usually 200, then he's going to want more per box. So harvesting costs go down because you're picking few boxes, but because of the smaller fruit you're going to have to pay more per box."
Another reason for production declines? Also, the nursery industry was hit by psyllids, and zombie groves that were purchased in boom times to develop houses. When the boom busted, fledgling grove owners harvested the crops, but they didn't invest money over the last half-decade to remove unproductive trees and replant new ones.
Today's grove owners are smarter, Royce said. They look at factors like the pH content of the water and whether it should be treated, and how herbicides should be applied.
However, even in Highlands County, one solution does not fit all, Royce said. "We grow citrus in micro-environments, even in Highlands County. What works on the Ridge may not work in the flatlands."
"I think there are people who are hopeful we won't see another crop with the drop in size. We may see start to rebound. But we are still losing more trees than we are planting. The industry needs to pick up the replanting rate. In the future, and this is an important point, it will not take as many trees or not as much acreage to grow the volume. Some guys are planting with tighter densities."
The crop could fall another percent or two, Royce suggested, "But I don't think we're going to see a 20 or 30 million box drop in the next year or two. I'm bullish that will turn around. I'm encouraged. March 14 of this year looks better than March 14 last year."