Say goodbye to your morning OJ on the cheap. Today, we’re talking about the soaring cost of orange juice, and it’s not due to inflation.
According to Bloomberg data, the price of orange juice futures has hit an all-time high, thanks to growing worries about a global supply shortage. The culprits behind this crunch? Citrus greening, a nasty crop disease wreaking havoc in orange groves across Florida and Brazil.
In the heart of New York, OJ futures have climbed 1.8% to reach $3.052 per pound — a figure that might have you rethinking your favorite breakfast beverage.
Here’s some juicy detail: Brazil, a behemoth in the juice export business, is set to ship 1.7% less orange juice to the US this year, as per a July 20 report from the Department of Agriculture. Add to that the disease-related concerns in Florida, the primary orange-producing state in the US, and it’s clear that prospects for the sunny drink are not so bright.
Judy Ganes, president of J. Ganes Consulting, told Bloomberg that the disease problem is escalating in Florida and the odds for a significant production recovery in the coming season seem slim. “There are signs that the disease is more prevalent in Brazil too, which is also facing long-term problems with their crops,” she added.
As prices go up, consumption is on the downswing. Retail prices for orange juice in the US have skyrocketed to nearly $9 per gallon this month, compared to less than $8 a year ago, as per figures published by the Florida Department of Citrus. Consequently, OJ demand has dipped to its lowest point in at least half a decade.
While OJ prices continue their ascent, fans of eggs and bacon can breathe a sigh of relief. A dozen eggs and a pound of bacon now cost 27% less than their January peak, mainly thanks to easing inflation.
With the Federal Reserve making 10 interest rate hikes over the past 18 months, analysts are forecasting another quarter-point adjustment this Wednesday. Whether this has any effect on your morning glass of juice is yet to be squeezed out.