January 12, 2010
By Tom Sellen
Wall Street Journal
Orange juice futures were higher Tuesday as sub-freezing temperatures continued in the Florida citrus belt, damaging more of the state's orange crop.
Photo: Frozen concentrated orange juice on ICE Futures U.S. are rallying. (Bloomberg News)
Citrus crops sustained another round of temperatures below 28 degrees Fahrenheit for four to six hours, with overnight lows reaching the mid-20s in many areas. Growers were already assessing freeze damage incurred Sunday night, and the Monday night freeze means even more of their oranges were frozen. There a'so are reports of leaf and twig damage, with possible tree damage in northern fringes of the citrus belt.
"There's no doubt that when you have back-to-back nights like that, we saw some additional fruit damage and possibly some twig and leaf damage," said Fran Becker, president of Florida Citrus Mutual and vice president of Fruit Procurement for Peace River Citrus Products in Arcadia, Fla.
Orange juice prices have been on a wild ride in recent days as an arctic chill took hold across the Florida citrus belt. After soaring 7% on Friday, they plunged on Monday to finish down 19.3 cents, or 13%, at $1.3185 a pound, causing big profits for some and losses for others.
Prices are rallying again on Tuesday amid a sense that Monday's sell-off was overdone and that the full extent of the freeze damage won't be known for several days or weeks. March orange juice is up 6.25 cents, or 4.7%, at $1.3810 a pound.
Northern belt areas, essentially the region north of Interstate 4, has "definitely been hammered" with six consecutive mornings of readings in the 20s, Becker said.
Some of the young trees were likely killed by the arctic blast, one of the worst to hit the state since the big freeze of 1989-90.
Most of Florida's orange crop is used for orange juice, as opposed to California, which grows the bulk of its oranges for the fresh fruit market. Orange juice prices at the supermarket haven't yet been affected, in part because inventories remain high, but any big drop would be expected to affect retail prices.
The cold temperatures in Florida broke record lows set more than 80 years ago, affecting several crops. Tender crops such as peppers and tomatoes were wiped out in parts of the state.
Alhough cold weather systems sometimes pass through, it's rare for them to linger so long. The average temperature this time of year in South Florida is 68 degrees Fahrenheit.
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