Florida Freeze VS USDA Optimism

The Wall Street Journal reports that Florida Freeze Results in 30% Crop Loss.

(emphasis mine) [my comment]

JANUARY 19, 2010
Florida Freeze Results in 30% Crop Loss

A blanket of ice covers strawberries Jan. 5 in Plant City, Fla. Businesses that rely on Florida may have to scramble to get products elsewhere.

Florida farmers will sustain at least a 30% crop loss due to freezing temperatures, resulting in losses of the hundreds of millions of dollars,
according to preliminary data from the Florida Department of Agriculture & Consumer Services.

The cold snap has come at a time for a state that has suffered more than most from the housing-market downturn.

"We had a lot of damage; we just got devastated," said Paul Allen, co-owner of R.C. Hatton Farms near Pahokee, Fla., who grows green beans and sweet corn on 6,000 acres.

Everything from fruits and vegetables to nursery plants and shrubs to tropical fish felt the effects of the freeze. Tomatoes were particularly hard hit, with about 70% of the crop in southwest Florida, a main growing region, likely wiped out, according to Reggie Brown, executive vice president of the Florida Tomato Growers Exchange.

For consumers, particularly on the East Coast, some products will be in short supply and prices will be higher, as crops such as citrus, tomatoes, sweet corn, bell peppers, snap beans, strawberries and squash were hurt.
Businesses that rely on Florida produce may have to scramble to get products elsewhere.

Growers continue to survey fields, and the full extent of the damage won't be known for days or weeks. But
the damage, the worst cold weather-related event the state has faced in at least two decades, already has started pushing prices higher.

Wholesale prices for tomatoes, orange juice and lettuce had climbed nearly 40% last week on the East Coast, said Nelson Eusebio, executive director of the National Supermarket Association. The group represents 400 independent supermarket owners in the New York metropolitan area.
Orange juice prices at the supermarket have held relatively steady even as
some industry participants estimate that the freeze damage could reduce this year's Florida orange crop by 5% or more. Frozen concentrated orange juice futures soared two weeks ago, but moderated last week as initial damage reports weren't as bad as many feared. Also, orange-juice inventories are high by historical standards. On Friday, front-month orange juice-futures on ICE Futures U.S. fell 1.2 cents, or 0.9%, to $1.3175 a pound. Markets were closed Monday for the Martin Luther King Jr. holiday.

Matt McLean, a fourth-generation citrus grower near Orlando, said
crop losses for the 1,000-acre operation at the Clermont-based Uncle Matt's Organic, the oldest organic citrus company in the U.S. and biggest in Florida, likely were about 5% to 10%. At least one farmer nearby lost about 30%, said Mr. McLean, founder and chief executive of Uncle Matt's. "God smiled on us," he said.

Agrimoney reports that orange juice rally 'could have further 50% to go'.

12:52 UK, 3rd February 2010, by Agrimoney.com
Orange juice rally 'could have further 50% to go'

The rally in orange juice prices may have a further 50% to run as economic revival whets demand at a time when frost, disease and grove clearance have dented Florida's output,
Fortis Bank Nederland has said.

Juice prices, which have already doubled over the last year, could be poised to rise to $2 a pound for the first time since March 2007, the bank said, noting the "radical" transformation in the market's outlook since the depths of the recession.

It already looked like output in Florida, which produces three quarter of America's oranges, would be "historically low", even before potential damage from summer storms is factored in.

"The Atlantic hurricane season late this year is unlikely to be as quiet as that of 2009," Fortis said.

Meanwhile, US economic revival "may see juice demand regain much of the ground it lost during the recession".

"A rise of $2 a pound by the second half of 2010 looks increasingly possible," the bank said.

Juice for March delivery closed in New York on Tuesday at $1.3885 a pound, with the July lot ending at $1.4565 a pound.

Cocktail of challenges

Florida's orange production looked set for a steep fall even before the winter, with farmers impatient at low prices ripping out groves
[USDA supply destruction], and citrus greening disease, a fatal and incurable bacterial infection, threatening remaining trees.

Orange juice producers' league, 2009-10 (year-on-year change)
1: Brazil, 1.31m tonnes (+3.7%)
2: US, 615,000 tonnes (-19.2%)
3: EU, 106,000 tonnes (+3.9%)
4: Mexico, 65,000 tonnes (-18.8%)
5: South Africa, 27,000 tonnes (+50%)
World: 2.17m tonnes (-4.3%)

However, frosts have added to the industry's woes, prompting talk in the market that Washington will cut by 7m boxes, to 128m boxes, its estimate of Florida's 2009-10 crop.

"Given that fruit sizes on the tree were already causing some concern before the latest frost damage, growers in Florida are beginning to talk in terms of a final tally as low as 122m boxes,"
Fortis said.

The Ledger reports that Freeze Cost Florida Growers 7.4 Mil. Boxes.

Freeze Cost Florida Growers 7.4 Mil. Boxes, Agency Says
Experts expect figure to grow as damaged fruit continues to drop.
By Kevin Bouffard
Published: Tuesday, February 9, 2010 at 11:35 p.m.

HAINES CITY Florida citrus growers lost at least 7.4 million boxes of fruit, including 6 million boxes of oranges, to last month's freeze.

In the first official estimate of crop losses to January's record-breaking cold snap, the U.S. Department of Agriculture on Tuesday dropped its 2009-10 Florida orange crop forecast to 129 million boxes, down 4.4 percent from the pre-freeze estimate of 135 million boxes.

But as bad as those USDA numbers look, they likely reflect the minimum damage from the January freeze.

"Old-timers usually talk about a short (freeze-damaged) crop getting shorter. It's probably a little too early to say this is all the damage," said Ken Keck, executive director of the Florida Department of Citrus in Lakeland.

That's because freeze-damaged fruit will continue to drop from trees until the end of the season in June.
The USDA conducted its crop count between Jan. 14 and Jan. 29, about two weeks after the worst of the January citrus freeze.

"We're getting more drop every day," Counter said.

Another major factor is orange juice yield, which will also continue to decline through the end of the season because freeze-damaged fruit will dry out the longer it stays on the tree until harvest.
Juice processors buy 95 percent of Florida's orange crop.

The latest USDA box numbers are based on fruit size and the expected amount of dropped fruit through the rest of the season, said Jeff Geuder, director of the USDA's Florida Agricultural Statistics Service office in Maitland, which performs the monthly crop survey. The total amount of juice squeezed from the oranges will change the box count at the end of the season.

Falling OJ yields will most affect late-season Valencia oranges, which will not be harvested until next month. The USDA dropped the 2010 Valencia harvest by 3 million boxes, but that does not factor in juice loss from drier fruit, Gueder said.

Based on a post-freeze sample of Valencias, the USDA did forecast a 3 percent decline in juice yields from the late-season oranges. If accurate, that would translate to an additional 3 million-box loss by the end of the season, Counter said.

For growers, the freeze-related losses may have turned a money-losing 2009-10 season into a profitable one, especially in groves that escaped significant damage.

Rising farm prices may be bad news for OJ consumers, however.

Coca Cola North America, owners of the Minute Maid OJ brand, announced Jan. 28 retail price increases of 6 percent to 9 percent related to freeze damage. Other brands also are expected to raise retail prices.

USDA Citrus Numbers Optimistic

Bradenton reports that Manatee citrus crop hit hard by Jan. cold.

Posted on Wed, Feb. 10, 2010
Manatee citrus crop hit hard by Jan. cold

MANATEE — Despite being situated near the coast, which is usually warmer than inland, Manatee County's roughly 18,600 acres of citrus got slammed hard by a prolonged freeze in mid-January.

Severe damage to fruit and foliage locally was reported to the Peace River Valley Growers Association during a recent sampling of 20 to 30 members of the association from Manatee County, said Barbara Carlton, executive director of the Peace River Valley Growers Association.

Schroeder-Manatee Ranch, Manatee County's largest citrus grower, expects a reduction of 15 to 20 percent from last year's crop due to frost damage, said Mac Carraway, president of SMR Farms.

Steve Futch, a University of Florida extension agent specializing in citrus, estimates about 22 percent for Manatee's reduction, the same as statewide.

Manatee's losses contributed to a U.S. Department of Agriculture estimate Tuesday that showed a 2009-10 orange crop forecast at 129 million boxes, a reduction of 6 million boxes from January estimates.

Carlton and Carraway both said that the forecast is conservative.

"We were expecting a reduction in the crop size from the USDA, and we expect more yet to come," Carlton said.

"I wouldn't be surprised if the estimate doesn't go down again," Carraway said. "We got pretty significant damage to fruit and foilage, and the damage is still revealing itself."

Both Carraway and Carlton reported that Manatee citrus growers lost fruit due to ice and lost tree leaves. Both said Manatee didn't lose tree wood, which could have meant years for recovery.

Carlton went out into the groves during the roughly 10-day freeze and took pictures that show frost on the leaves and fruit being examined by growers for ice. Leaves began to turn brown and drop until the under canopy of the trees were covered with leaves like a carpet, Carlton said.

"Since then, we have seen the fruit begin to drop, too," Carlton said.

Abc Action News reports that orange crop damage worse than believed.

Orange crop damage worse than believed
Reported by: John Thomas
Last Update: 2/09 9:43 pm

Orange crop damage may be worse than believed

HILLSBOROUGH COUNTY, FL -- It's another blow to the citrus industry. The U.S. Department of Agriculture says January's freeze in Flori da has forced them to further drop their projected orange harvest by 4%.

But local orange grower Donald Lloyd, of Lloyd Harvesting Inc. in Plant City, believes those numbers might be a little too optimistic.

While he feels some areas may have come through the freeze with just a 4% loss, he feels others were hit much harder. In some of his groves he fears his losses will amount to anywhere from 25% to 35% of his crop.

Lloyd believes in all likelihood at some point the U.S.D.A. will be revising their figures, and that they should have a better picture on the damage in another month.

In any event, whatever the final cost to the crop is, Lloyd says that cost is likely going to hit the farmer and then the consumer.

My reaction: January's Freeze In Florida offers yet another example of:

1) Record record-breaking weather and devastating agricultural damage.

2) Incomprehensible USDA optimism in the face of record-breaking weather and devastating agricultural damage.

3) Outright skepticism of USDA numbers from local producers (see video from article above).

Conclusion: This pattern of bogus estimates in the face of agricultural disaster has been repeated so often, it is a wonder they have any credibility left.

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One Response to Florida Freeze VS USDA Optimism

  1. Sebastian says:

    This is bad news for me as I drink a lot of freshly squeezed juice which is already quite expensive. If prices go up further, I may choose juice from concentrate that doesn't taste nearly as good but is much cheaper.

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