Miami, Oct 10 - Retail prices for orange juice may come down a bit despite forecasts that the crop from Florida's struggling groves will be 2 percent smaller than last year's, industry officials said Friday.
"We have ample inventories and when we look at the overall supply out in the world, it's very similar to last year. I think that suggests there could be some possibility of some price declines," Mark Brown, senior research economist for the Florida Department of Citrus, said on a conference call.
Retail prices average about $6 a gallon. Demand has been stable but could grow if prices decline or if inflation continues to push up the price of competing beverages, Brown said.
The U.S. Department of Agriculture issued its first citrus crop forecast for the 2008-2009 season on Friday, predicting Florida would produce 166 million 90-pound boxes of oranges. That was down 2 percent from last year's harvest of 170.2 million boxes, but above what the industry expected.
The yield for from-concentrate orange juice was forecast at 1.59 gallons per box, the USDA said. Florida supplies three-fourths of U.S. citrus fruit, most of it used for juice and concentrate.
The crop forecast suggests Florida's groves are recovering from the spate of hurricanes that ravaged the trees in 2004. But the long-term outlook is still grim unless researchers find a way to halt of the citrus greening disease that threatens the state's $9.3 billion citrus fruit industry.
The insect-borne bacterial disease does not harm humans but makes the fruit unpalatable and kills the trees. Efforts to control it have diverted money away from marketing and driven up costs for growers, who are spending more on pesticides and inspections.
"The long-term health of the citrus trees is obviously a great concern," said Ken Keck, executive director of the state Department of Citrus.
Some processors are renegotiating their contracts with growers, raising the floor price but capping future increases, he said. That is aimed at keeping prices from dropping to the point where growers cannot afford to grow fruit or the point where they might be tempted to skimp on eradication efforts.
"All of that boils up to evidence that processors know that there is a window here during which the Florida grower needs to survive pending an end to greening," Keck said.
"There'll be a period here where folks will be having to hang on," he said. "But we're throwing an awful lot of resources at this and we have the right brains involved in this effort, from around the country and around the world."
Florida's citrus acreage has dropped by 11 percent in two years to 576,577 acres, the lowest acreage since record keeping began in 1966. The decline is partly due to greening and other disease but also due to urbanization and the conversion of land for other uses.