Florida Orange-Crop Outlook Affirmed by U.S. Agency

(Corrects percentage in first paragraph in story published May 10.)

Florida’s orange crop, the world’s second-largest, will be 10 percent smaller than first forecast in October, the U.S. government said, affirming last month’s estimate and surprising analysts after beneficial rain.

The state will produce 138 million boxes of the fruit in the harvest that started in October and runs through June, unchanged from the April forecast, the U.S. Department of Agriculture said today in a report. On average, analysts and traders expected 137.6 million boxes, a Bloomberg News survey showed. Output last year was 146.7 million. Futures pared gains in New York.

In April, the USDA cut the crop forecast for the fifth straight month from its first estimate of 154 million boxes in October. A state group has said that the citrus greening, a bacterial disease, is “threatening to wipe out” Florida’s $9 billion citrus industry. This week, Coca Cola Co., the owner of Minute Maid juices, said it plans to spend $2 billion to support planting of 25,000 acres of new groves.

“We’ve seen up to 50 percent of the crop lost in some areas because of greening, with some fruit not usable for anything,” said Dean Mixon, a farmer in Bradenton, Florida, whose family has been in the citrus business more than 75 years. While “the disease is more prevalent in southern parts, the announcement by Coca Cola this week, is very telling about the industry’s concern,” he said.

ICE Futures

Orange juice for July delivery rose 0.3 percent to close at $1.4435 a pound at 2 p.m. on ICE Futures U.S. Earlier, the price climbed as much as 2.1 percent. The commodity has jumped 23 percent this year, the biggest gain among 19 raw materials in the Thomson Reuters/Jefferies CRB Index.

“Rainfall was generally light, becoming heavier toward the end of the month, easing drought conditions in all of the citrus-producing regions” that hampered crops this season, the USDA said today.

Citrus greening, first found in Florida in 2005, starves a tree of nutrients, causing the fruit to shrink and drop prematurely. The disease has appeared in all of the 32 counties that produce commercially.

Drier-than-normal weather had compounded the damage from disease, Mixon said today in a telephone interview. His farm is next to a Tropicana plant owned by PepsiCo Inc. (PEP)

In 2013, rainfall in the state has been 40 percent to 70 percent below the average of the past 30 years, Kyle Tapley, a meteorologist at MDA Information Systems Inc. in Gaithersburg, Maryland, said in an e-mail.

University Study

Citrus greening cost Florida’s economy $3.63 billion in lost revenue since 2006 because of a reduction in orange-juice production, the University of Florida said in January. The state also lost 6,611 jobs, according to a study by the university’s institute of food and agricultural sciences.

To shield new citrus crops from the disease, seedlings must be grown in greenhouses rather than outdoors, doubling the cost of a new tree to about $8, Tom Spreen, a consultant and professor emeritus at the university’s food and resource economics department, said in a telephone interview.

Yields in Florida will average 1.60 gallons per box, down from 1.63 gallons a year earlier, the USDA said today. A box weighs 90 pounds, or 41 kilograms. Brazil is the top orange producer.

To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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