Breakfast lovers are in for another jolt as orange juice prices surge to near-record levels. A new report released on Friday indicates that Brazil, the leading global exporter of OJ, is facing its worst harvest in over three decades. This alarming development compounds existing issues in Florida's citrus groves, which have been plagued by disease and are experiencing collapsing production levels to the lowest in decades.
Fundecitrus wrote in a note that Brazil will produce 232.4 million boxes—each weighing about 90 pounds—for the growing season this year. That's a 24% collapse from a year earlier and the lowest production levels in 36 years.
"Excessive heat brought stress to orange trees during a crucial period of flowering and early fruit formation between September and November last year. Further hurting output is an increase in citrus greening, a disease that causes fruit to prematurely drop from trees," Bloomberg wrote, commenting on the report.
The report sparked additional fears about a worsening global OJ shortage.
In markets, prices of concentrated OJ futures in New York surged as much as 5% on Friday, closing up about 3% to $394 and only 8% off the record high of $425.
Sliding production in Brazil could soon impact US retail prices at the supermarket, considering Florida has yet to stage a significant comeback in production.
In the last year, the US has ramped up imports of OJ from Brazil to mitigate losses in Florida.
Don't worry. Federal Reserve Chair Jerome Powell has everything under control on the food inflation front, as the prices of OJ, coffee, eggs, and cocoa have hyperinflated.
Watch OJ futs in NY into the new week.
