Florida Orange-Crop Forecast Rises on Freeze Review

Florida’s orange crop, the world’s second-largest, was hurt less than expected by a January freeze and will be 1.6 percent bigger than estimated last month, the government said. Futures dropped for a third day.

Output will be 131 million boxes in the harvest ending in July, more than analysts expected and up from the February forecast of 129 million, the U.S. Department of Agriculture said today in a report. Dry weather and a cold spell in the first half of 2009 resulted in fewer and smaller oranges, and a January freeze killed some crops, the government had said.

“This estimate is evidence that Florida citrus came through the ‘freeze that would never end’ in better shape than we first thought,” Michael W. Sparks, the chief executive officer of Florida Citrus Mutual, a trade organization in Lakeland, said in a statement.

Orange-juice futures for May delivery fell 0.2 cent, or 0.1 percent, to $1.4695 a pound on ICE Futures U.S. in New York. The price has dropped 1.8 percent this week in the longest decline since December.

Futures have more than doubled in the past 12 months, reaching $1.53 on March 8, the highest price in more than two years, on projections for a smaller crop. The Florida harvest is expected to plunge 19 percent from 162.4 million boxes collected last season. A box of oranges weighs 90 pounds, or 41 kilograms.

Eight-Day Freeze

Temperatures fell below freezing for eight straight days in Florida during the first half of January, according to the USDA. Oranges can be damaged when temperatures fall below 28 degrees Fahrenheit (minus 2 Celsius) for several hours.

“In response to the freezing temperatures in January, growers began harvesting their remaining fruit at an accelerated rate,” the USDA said today. “Plants processed much more fruit than normal in January and early February.”

The USDA “basically cut too many” oranges in the February forecast, Ernie Thomas, the president of Global Commodity Futures LLC, said from Vero Beach, Florida, before the report. “They’ve got to add them back on.”

Tropicana, Minute-Maid

PepsiCo Inc., the world’s second-biggest soda maker, plans to reduce the amount of the beverage in half-gallon (1.9-liter) containers of Tropicana orange juice and raise prices on the one-gallon size because of the smaller citrus crop in Florida.

The 64-ounce size will hold 59 ounces of juice, while the suggested retail price won’t change, Jamie Stein, a spokeswoman for Tropicana, said today by e-mail from Chicago. Coca-Cola Co., the world’s largest soft-drink maker, said in January that it plans to boost the price of orange-juice products from its Minute-Maid and Simply Orange brands by as much as 9 percent effective April 5 because of the Florida cold.

“We anticipate that we will be passing on a 6 percent to 9 percent cost increase to retailers effective April 5,” Ray Crockett, a spokesman for Atlanta-based Coca-Cola, said Jan. 29 in an e-mail. The company said today there were no changes from its January announcement on price increases.

U.S. retailers sold 3.3 percent less orange juice in the four weeks ended Feb. 20 than a year earlier, the Florida Department of Citrus said in a statement this week. Sales dropped to 49.6 million gallons from 51.3 million, the agency said, citing Nielsen Co. data.

Source : BusinessWeek