New York, Nov 8 - The U.S. orange crop could recover by next year from a combination of storms, disease and sale of farmland that wrecked this year's output, but juice prices may not fall beyond 25 percent, an expert said.
The 2007/08 citrus season could see the country's biggest orange grower Florida delivering around 180 million (90-pound) boxes, versus the 135 million forecast for 2006/07 by the U.S. Department of Agriculture, Professor Tom Spreen of the University of Florida said in an interview.
But the price of frozen concentrated orange juice on the New York Board of Trade -- which determines the retail price of orange juice -- may not fall more than 50 cents a lb., Spreen said.
"We will be there this season," Spreen, who studied the Florida crop earlier this year, told Reuters on the sidelines of a juice industry meeting on Wednesday when asked if FCOJ could finish the year at current levels of nearly $2 a lb.
"But if I'm right, we'll have a bigger crop next year," said the professor, who lectures at Florida's Institute of Food and Agricultural Sciences. "But we may still be at around $1.40 or $1.50, which is still pretty high."
FCOJ was trading at just around 60 cents a lb. in August 2004 before the 2004-2005 hurricanes, crop ailments and takeover of farmland by property developers culminated in 17-year lows in Florida's crop output this season.
FCOJ's benchmark January contract <OJF7> struck 16-year highs of $1.9990 last Thursday. It closed on Wednesday at $1.9845 a lb. and traders said the market appeared well on course to breach $2.08 next for a 30-year peak.
The rally has already bumped up juice prices on supermarket shelves. Soft drinks maker Coca-Cola Co. has raised prices four times this year for its frozen and chilled orange juices.
Pepsico , which owns the Tropicana brand and typically buys 40 percent of all Florida oranges, said last week it will raise prices on its juices in January after a hike in September.
Spreen said the rout in Florida's orange growth has even led to speculation that citrus production "may all but vanish" in the state.
"I don't think this will be the case," he said. "The tree census from our study shows there are still 69.5 million orange trees in Florida. Each tree typically produces around 2.5 to 3 boxes of oranges. Therein, you have the math for your 180 million boxes.
"All this is possible if you have better weather and less calamities next year for the crop," he added.
Over a 15-year average, he said, orange production in Florida could flatten out to around 150 million boxes a year.