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Orange Juice Futures Fall as Florida Citrus Industry Demands Help

December 14, 2017 at 17:34 by Andrew Moran

Orange juice futures were trading as low as 2% on Thursday after the Florida citrus industry called on the federal government for some assistance. Despite reaching a seven-month high in late November, orange juice prices have been on a downward trend in December.

January orange juice futures tumbled $0.023, or 1.55%, to $1.461 per pound at 16:18 GMT on Thursday on the US ICE Futures exchange. Orange juice prices are settling at their lowest levels since the beginning of September. Year-to-date, orange juice has plunged more than 21%.

The US Department of Agriculture (USDA) revised its forecast for this year’s citrus crop by an additional 8%. The USDA projects that Florida’s orange output will be a tepid 46 million boxes, which is roughly 20 million fewer than last year’s harvest.

Florida officials and industry representatives are calling on the federal government for financial assistance, especially in the aftermath of Hurricane Irma that created about $1 billion in losses for orange farmers.

Shannon Shepp, executive director of the Florida Department of Citrus, said in a statement:

This second reduction underscores the dire need for federal disaster assistance. Florida Citrus growers are making decisions on next season’s crop now and they need to know they have the support necessary to keep this American icon alive.

Last month, a $44 billion relief package for states impacted by Hurricanes Harvey, Irma and Maria, was introduced in Congress. But the biggest concern for the Sunshine State is that none of the proposals have included support for the citrus industry.

Adam Putnam, Florida’s agriculture commissioner, is trying to get something for Florida in the third federal relief package. Although he is pleased by the efforts inside the state legislature, Putnam believes he can get something better from Washington.

Governor Rick Scott has put forward $22 million in his 2018 budget proposal for the citrus industry.

That said, Putnam is warning that Florida may lose business to Brazil as more brands attempt to meet demands, which would result in a reduced market share for the US jurisdiction. Brazil has been filling in the global supply shortfall as weather has improved and orange crops have received plenty of rainfall.

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