Orange juice prices to increase as the production of Valencia oranges falls in the US

Published Jun 14, 2021

Higher than the usual temperature in California has reduced the orange season in the region, causing a shortage of oranges. USDA has reduced the production forecast of Valencia oranges by 4 million boxes to 29 million boxes for this season. Valencia oranges, primarily for processing and orange juice production, and a fall in the output has inflated the global orange juice future prices. This is likely to continue for the next few months as the weather gets warmer.

The United States is the second-largest producer of oranges globally, accounting for more than 10% of the world’s production. The country is one of the top producers of Valencia oranges, primarily for processing and orange juice production The fruit is produced in the US from January to June in Florida, California, and Texas.

Source: Tridge. Seasonality.

According to recent estimates by USDA, the production volume of Valencia oranges has reduced by 4 million boxes to 29 million boxes for the 2021 season. The harvested fruit size is below average, requiring 246 pieces to fill a 90-pound box. According to Rajjun Sahota, Country Manager at Tridge, warm spring weather in California has resulted in a shorter season than usual due to high temperatures. Northern California’s mercury hit triple-digit temperatures at 105°F during the last week, coinciding with the orange growing season.

Orange juice yields are reported to be at 6.02 gallons/box compared to the 6.07 gallons/box during the same period last year. The reduced supply of Valencia oranges has increased the orange juice future prices globally. The orange juice prices on the Intercontinental Exchange (ICE) rose by 8.9% in the last three months. Ever since the outbreak of COVID-19, the demand for orange juice has increased due to its immunity-boosting properties causing the prices to inflate amid logistics issues and limited supply. As Valencia orange production remains fixed in the US, it is likely to impact the availability of oranges for juice production in the coming months. Consequently, prices of the fruit and juice are expected to increase further as the warm weather continues across the country.