Orange juice is so expensive - Why?

Orange juice prices have surged due to several factors including supply chain disruptions, adverse weather conditions affecting orange crops, and increased production costs. These elements combined have led to higher costs for this popular beverage, making it more expensive for consumers. Understanding these underlying causes can shed light on the price hike and its impact on the market.

U.S. orange production has drastically decreased due to volatile threats from extreme weather events, an incurable disease, and economic pressures.

According to the United States Department of Agriculture, citrus growers are losing millions of dollars annually. Simultaneously, orange juice futures have reached record highs.

“Citrus production in the United States is in a pretty dire situation right now,” said Daniel Munch, economist at the American Farm Bureau Federation, to CNBC. “When supply cannot meet demand, consumer prices rise.” Florida's orange production has significantly declined over the years. In 1998, Florida had over 658,000 acres of oranges. By 2023, this number had dropped to just over 303,000 acres, a reduction of more than 50% in 25 years.

The spread of citrus greening disease, one of the most serious and currently incurable plant diseases, is a major contributor to the problem.

“When citrus greening enters the grove, it reduces tree productivity, ultimately leading to their death and removal from the grove,” said Amy O’Shea, CEO of Invaio Sciences, to CNBC.

Potential solutions are challenging to implement as climate change exacerbates extreme weather and scalable treatments for citrus greening remain elusive. Research is focused on breeding citrus greening-resistant varieties, antimicrobial treatments, and pest control solutions like crop covers.Invaio is one company developing treatments for citrus greening.

“We’ve created a precision delivery technology called Trecise, which inserts a reduced amount of an antimicrobial into the tree’s vascular system,” O’Shea told CNBC. In August 2023, Trecise received emergency use approval from the Florida Department of Agriculture and Community Services.

Due to these volatile threats, experts believe higher orange juice prices are likely to persist in the short term.

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Source: CNBC‍