Food Business News - February 23, 2016 - (Page 25)

Market Insight The demise of orange juice he Florida orange crop is forecast to be the smallest in 65 years, but frozen concentrated orange juice futures remain far from record highs due to declining orange juice consumption and the availability of imports from Brazil. Florida is the orange state, really the orange juice state, accounting for about 60% of U.S. orange production of which 90% or more is processed for juice. Processors transitioned from more than 90% of juice production in the form of frozen concentrate in the early 1990s to more than 90% fresh chilled juice by 2000. California provides most of the oranges consumed fresh in the United States. Florida's citrus growers have survived hurricanes, droughts, freezes and land development for more than a century. But the latest challenges - citrus greening disease and declining consumption - have combined to deliver such a devastating blow from which some wonder whether the industry will survive. "Citrus greening, the plague that could wipe out Florida's $9 billion orange industry, begins with the touch of a jumpy brown bug on a sun-kissed leaf," National Geographic said in a 2014 article. The disease, a bacterium that causes Huanglongbing, known as T February 23, 2016 citrus greening, is spread by the Asian citrus psyllid, a tiny winged insect. The disease limits nutrient flow in the tree causing fruit to remain green, sour and hard and often fall before harvest, and eventually killing the tree. There is no cure for the disease despite hundreds of millions of dollars from the U.S. Department of Agriculture, the state of Florida and private industry spent on research. Citrus greening first was detected in Florida in 2005. It has since spread to every state, including California. The only solution has been for growers to rip out trees. It has the potential to wipe out the state's citrus industry, or at a minimum, cause it to "risk losing relevance and economic impact," as stated in a 2015 Chicago Tribune story. Returns per tree for processing oranges have nearly tripled in the past 10 years for Florida growers, but nearly 30% fewer trees have offset some of those gains. Florida's orange-bearing area was estimated at 405,500 acres in 2014-15, down 3% from 201314, down 28% from 564,800 acres in 2003-04 and down 35% from 624,900 acres in 1996-97, according to U.S.D.A. records back to 1978. Orange production in the 2003-04 season was 242 million 90-lb boxes, the second highest on record after 244 million boxes in 1997-98. Production plunged 38% to 149.8 million boxes in 2004-05 and has never been over 171 million boxes since. Citrus canker and hurricanes wreaked havoc on the industry in the early 2000s. Production in 2015-16 was forecast by the U.S.D.A. at 69 million boxes as of February, down 29% from 2014-15 and the lowest since 67.3 million boxes in 195051. The Florida Department of Citrus last fall said the state's orange crop could fall to 27 million boxes by 2026, which would be the lowest since the early 1940s. At the same time, orange juice consumption has been declining for years due to a combination of rising prices and high carbohydrates. Orange juice consumption peaked in 1998 and has declined nearly every year since, with the lack of "sit down" breakfasts a contributing factor. More recently, concern about carbohydrates, or sugar, has discouraged juice consumption, despite recommendations by the U.S.D.A. in its Dietary Guidelines to include juice as part of a healthy diet. The U.S.D.A. forecast U.S. orange juice production in 2015-16 at 329,000 tonnes, down 25% from the prior year, while consumption was forecast at 600,000 tonnes, down 11%. The difference is mostly made up by imports of 300,000 tonnes, mostly from Brazil, partially offset by exports of 90,000 tonnes, for a net draw down in ending stocks of 61,000 tonnes to 300,000 tonnes. So while the Florida orange/ citrus industry struggles, there won't necessarily be a lack of orange juice, which only adds to growers' struggles. Researchers at Texas A&M University have developed bioengineered orange trees that can survive citrus greening disease. It's estimated the regulatory process to clear the trees for commercial production will take three or four years, and a few more years before the trees would be producing a viable quantity of fruit to make an impact. Of course the question then arises: Would consumers who already are shunning orange juice because of its high sugar content be ready to drink bioengineered orange juice from an industry that has focused on "natural" as a key marketing approach? FBN RON STERK rsterk@sosland.com FOODBUSINESS NEWS ® 25

Table of Contents for the Digital Edition of Food Business News - February 23, 2016

Food Business News - February 23, 2016
Campbell Soup defends G.M.O. labeling decision
Whole grains versatility
Dairy Business News - The many shades of cocoa
Table of Contents
Web Contents
Editorial - Pickup ahead in food m. & a. activity
WhiteWave broadening its Horizon
Pilgrim’s Pride plans sizable strategic investment
Consumers not clear on clean label definition
W.H.O. report urges tax on sugar-sweetened drinks
Snacks ‘area of weakness’ for Kellogg
US Foods files for initial public offering
Beyond Tyson 2.0
General Mills ahead of natural, organic sales goal
Mondelez ‘Lines of the Future’ steadily proliferating
Smucker looks to ‘lead with innovation'
Food business blossoming for 1-800-Flowers.com
Mars to remove artificial colors across portfolio
Three trends driving gluten-free market
Market Insight - The demise of orange juice
Washington - President’s budget for food safety leans heavily on user fees
Ingredient Trends - Manufacturers responding to non-G.M.O. trend
Whole grain intake still could improve
Is there a U.S. cocoa shortage?
New Food Products
Ingredient Market Trends - Secretary Vilsack says reports demonstrate net energy benefits of ethanol
Ingredient Markets
Supplier Innovations and News
Classifieds
Marketplace
Ad Index
Food Business in the News

Food Business News - February 23, 2016

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