Hurricane Irma wiped out nearly 50% of Florida’s iconic orange crop when it buffeted the state with 160 mph winds and a massive storm surge last month, sending orange concentrate futures rocketing higher and stoking speculation that the state’s embattled orange growers – already struggling to fend off a worsening “greening” epidemic that’s constrained production over the past decade – might never recover.
And in a development that confirmed traders fears that this year’s crop could be the smallest in decades, which in turn increases the likelihood that prices will remain elevated for the time being (no doubt conferring some small boost to headline CPI), Bloomberg is reporting that the state’s 2017 orange crop was its smallest since 1942, with 31 million boxes harvested.
Oranges are also grown in California, but the drop in Florida orange stocks was largely responsible for the smallest national yield since 1964. In the season that ended Sept. 30, orange output was 68.7 million boxes, according to US Department of Agriculture data. The record low was 4 million boxes in 1918. The data go back to 1913.
While it ultimately bypassed the state, Hurricane Katia terrified farmers and traders when it briefly appeared set to deliver the second devastating blow to the industry in two weeks.
When it tore through the state in September, Irma caused an estimated $2.5 billion in damage to the state’s agriculture, the Florida Department of Agriculture and Consumer Services said on Oct. 4. Preliminary estimates showed $760.8 million in damage to the citrus industry.
But more importantly, if CPI climbs in the coming months, will Janet Yellen (or maybe her successor) credit the oranges, like she once blamed falling prices for cellphone data plans for a “transitory” decline?