Orange juice prices may soon shock you
You may live a long way from the devastation of Hurricane Irma, but if you buy orange juice, you'll be feeling the effect at the supermarket checkout counter.
Orange juice drinkers may pay as much as $2.30 more for a gallon of orange juice as the result of broad swatch that Irma cut through Florida's citrus crop.
Just how high OJ prices rise depends on whether Brazil can increase its exports to the U.S. to help cover the shortfall, according to experts in the futures markets.
The Florida Department of Citrus estimates that 30% to 70% of the Sunshine State's crop was destroyed. But the result price rises could be mitigated if consumers switch to other juices or juice blends.
Current prices vary by store and region, but a half gallon of Tropicana OJ, made from concentrate, was selling for $6.48 Tuesday on Walmart's website.
"You're going to get to the point where people say, 'I’m not paying $8 a gallon. I’ll do a blend drink,'" said Kevin Sharpe, owner of Basic Commodities, a commodity brokerage firm in Winter Park, Fla.
Whatever the crop damage estimates are now will only grow, he explained. More fruit will fall off the trees prematurely due to stems kinked in the violent winds. Trees will continue to soak in standing water, which can cause rot and other arboreal illnesses.
Sharpe predicts prices will jump $1 to $2 a gallon at retail. Burt Flickinger III, managing director of the Strategic Resource Group, a retail and consumer goods consultancy, is forecasting $2.30 -- and a pinch that shoppers will for a long while.
"The damage will be both this crop year and future years, depending on the damage to the trees," he said. " You’ll see prices at retail go up."
On Aug. 29, the day before Irma formed, the price for frozen concentrated orange juice was $130.05, according to the ICE futures exchange. It peaked at $157.15 on Sept. 11, up 17%. As of Monday, the price was $145.55, 11% above the pre-Irma price.
But orange growers are counting on their devoted customers not to break their morning breakfast habit.
Ellis Hunt, chairman of the Florida Citrus Commission and a citrus grower for 41 years on land his family has worked for close to a century, said high prices won't deter orange juice fans.
"If they love it, they'll continue to buy it," he said. "It’s like gasoline. Whether it’s $4 a gallon or $2, people will still buy it."