Hanging low, not worth harvesting.

Photographer: Joe Raedle/getty images

The Florida Orange Industry Enters the Sunset Years

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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It’s going to be another terrible orange harvest this winter in Florida. The U.S. Department of Agriculture forecast today that growers in the state will collect just 70 million boxes of the fruit in the coming months, down from 81.6 million in the previous harvest -- and down from the all-time peak of 244 million boxes in 1998.

The Rise and Fall of the Florida Orange
Boxes* of oranges produced
 
Source: U.S. Department of Agriculture
*Boxes contain 80 pounds of oranges in California (75 before 2011) and 90 pounds in Florida.

As noted in the chart, boxes of oranges weigh different amounts in different states -- meaning that no, the numbers aren’t perfectly comparable. But this is how the Agriculture Department has been reporting orange production since the early 1900s, so I figure that’s how I should report it, too. And yes, they also grow oranges in Texas, but not enough to really see on this chart.

The main cause of Florida’s big orange-production decline is huanglongbing, or citrus greening disease. As you might guess, huanglongbing has its roots in China, where it was first reported in 1919 (the name means “yellow dragon disease”). It was detected in Florida in 2005, and has been decimating citrus groves ever since. It shows up first as a yellowish discoloration of the leaves, then turns the fruit lopsided and bitter and finally kills the tree. There is no cure once a tree is infected, but huanglongbing is caused by a bacteria spread by an insect called the Asian citrus psyllid, so growers have had some success in controlling the disease's spread by killing off psyllids with pesticides. And while the disease is probably not a death sentence for the Florida citrus industry -- China is still the world’s No. 2 orange producer, after all -- it may leave it permanently smaller.

Then again, the Florida citrus industry was probably headed for a big decline in any case. That’s because its main product is orange juice (95 percent of Florida oranges are turned into juice), and orange juice has fallen out of favor as American consumers have come to perceive it less as a source of vitamin C than a source of sugar. The USDA’s measure of “orange juice availability per capita,” a proxy for consumption, has fallen from a peak of 6.27 gallons in 1997-98 to 2.74 gallons in 2015-2016. As a result, orange juice prices have held steady despite the production collapse in Florida and a similar huanglongbing-induced decline in Brazil, the world’s top producer of oranges and of orange juice.

O.J. Prices Stay Flat
Bloomberg Orange Juice Subindex (January 2, 1991 = 100)
 
Source: Bloomberg

That’s great for consumers, but it’s been doubly terrible for Florida growers. Normally when a disease hits a crop, higher prices make up for some of the volume decline. Not this time -- and as a result Florida orange growers’ revenues fell from $1.8 billion in 2012 to $905 million last season.

Meanwhile, demand for fresh oranges hasn’t collapsed. And, happily for orange eaters, the nation’s main producer of fresh oranges isn’t Florida but California.

No Collapse (Yet) in Fresh Oranges
Fresh market orange sales, in boxes*
 
Source: U.S. Department of Agriculture
* California orange boxes weigh 80 pounds (75 before 2011), Florida 90 and Texas 85.

That collapse in California production in 2007 was due to a freeze. Huanglongbing, while it was detected in a Los Angeles suburb in 2012 and has been spreading since in Southern California, has yet to hit the state’s commercial citrus groves, most of which are located in the San Joaquin Valley in the central part of the state. There’s a chance -- because California’s growers have had more time to prepare, and new methods of fighting the disease are being developed -- that the state’s citrus industry won’t get hammered like Florida’s has. If so, California may have a shot at reclaiming its status as the top orange-producing state, which it ceded in 1949 after the development of palatable frozen orange-juice concentrate transformed the juice from special treat to breakfast staple, and Florida growers took charge of the nascent industry. The age of orange juice may be ending in the U.S. Let’s just hope the age of oranges isn’t.

  1. Brazil is No. 1 by a long distance. The U.S. was No. 2 before citrus greening came along; now it trails China and the European Union.

  2. Orange County, covered with 60,000 acres of its namesake fruit in 1950, was down to just 65 acres of commercial orange orchards in 2015.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net