US orange juice prices hit record after storms, crop disease

US orange juice prices have hit records in recent days in the wake of tropical storms and the outbreak of an insect-spread disease that has decimated Florida crops.

Futures of the commodity for delivery in September stood above $3 a pound on Thursday, more than a dollar above their level a year ago. Futures reached $3.20 in late July.

"There is a chance we made our highs for the move, but there is still a chance we could go up to $3.50 or so," said Jack Scoville, an agriculture market analyst at Price Futures Group.

Crops in Florida, the world's second biggest producing region after Brazil, were ravaged last year by Hurricanes Ian and Nicole.

Adding to the farmers' woes has been a bad breakout of Huanglongbing,which is also known as yellow dragon disease.

The ailment, also sometimes called Citrus Greening, is spread by a disease-infected insect, the Asian citrus psyllid.

Impacted trees produce bitter and oddly shaped fruit and typically die within a few years.

Because there is no known insecticide to protect crops, "basically you have to kill the trees, take them out and start fresh," Scoville said.

The US Department of Agriculture has projected that US production will drop by more than a quarter to 2.3 million tons, the lowest level in more than 56 years.

"Yields continue to decline in Florida due to fruit drop caused by citrus greening, reduced area harvested and high winds from hurricanes," the agency said.

Orange juice production is estimated to fall nearly 50 percent to 85,000 tons, a record low, according to the agency.

Dry conditions in Brazil and Mexico have also translated into lower crops, Scoville said.

Consumption of orange juice bounced during Covid-19, but "demand is starting to relax now," Scoville said.