Orange juice on consumer radar, Florida fruit in demand

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Hurricanes, the HLB and a global pandemic have shaken the Florida orange juice market in recent years.

Dr. Marisa Zansler, Director of Economic and Market Studies with the Florida Citrus Department (FDOC), provided 2021 participants Florida ProducerSM Citrus Show a detailed look at the US Olympics movement and demand projections for the future.

Irma and HLB

Hurricanes that strike in the right (or wrong) place have the potential to disrupt the Florida citrus industry. This is exactly what Hurricane Irma did in 2017, and its effects are still being felt. The continued decline in production due to HLB intensifies the problem.

“After Hurricane Irma, there was a lot of uncertainty about production prospects in Florida,” Zansler noted. “Would the trees withstand the aftermath of the storm? What would be the quality of the juice? For processors, this meant decisions had to be made.

These decisions to increase juice imports had to be made in a landscape where Florida production was in decline. Orange production, which accounts for 91% of the state’s citrus harvest, represents less than a quarter of the production in the 2003-2004 season before the detection of HLB.

“The significant decline in citrus production in recent years, mainly associated with the impact of HLB and Hurricane Irma, directly threatened the funding of the program (FDOC) whose mission is to ensure sustainability. and the economic well-being of the Florida Citrus Grower, ”Zansler said.

Imports fill the void

Prior to the COVID-19 pandemic, JO sales had declined by about 5.5% per year, as each year JO promotional dollars dwindled and the product became less and less of consumers’ priority. COVID-19 has changed this trend. Since mid-March, Nielsen’s volume sales have increased by more than an additional 63 million gallons of equivalent, which translates to approximately 11 million producer boxes. At the end of 2020, sales were following 2016 sales levels. OJ is on the rise due to consumer awareness of its health and immunity benefits and people who eat at home due to the pandemic. Zansler noted that market research backs up this claim about why JO sales are on the rise.

The sales activity led to a decrease in starting stocks (October 2020) for non-concentrate (NFC) Olympic Games. In fact, it was down 26% year-on-year. This is a shortfall of around 5 million boxes, which follows the 2015-16 season – a year seen as a shortage of NFC inventories.

This shortage and the decline in Florida harvests after Hurricane Irma led to increased imports of orange juice from Mexico and Brazil. But it’s important to note that Florida OJ processors get over 90% of their NFC juice from the state’s orange harvest. The exception to this was the 2016-2017 to 2018-2019 season due to the hurricane. Regarding the NFC, Zansler said there will be continued demand for the Florida fruit.

“If this trend continues for NFC, Florida processors are expected to move around 390 million gallons at a minimum,” she said. “On the basis of the first projections, the existing inventories would be necessary. We currently have a 14 week supply for the season through early January. The last time we saw this volume movement was in 2016-2017. Then the inventory was closer to a 20 week supply.

That said, imports will be necessary to meet the demand for NFC in the United States. Zansler also noted that it is important to invest in promotion now to educate consumers in order to maintain or strengthen demand in the future. This is because marketing efforts often have a lag effect. She also said growers need to replant trees, reduce production costs and improve yields to meet market demand while fully recognizing the challenges HLB presents in achieving these goals.

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