U.S. orange-juice sales continues to fall
U.S. consumers bought 34.96 million gallons of orange juice in the four weeks ended Aug. 2, down 9.2% from a similar period a year ago, according to Nielsen data published Monday by the Florida Department of Citrus. It was the lowest level for total sales since the four weeks ended Jan. 19, 2002, the oldest data available.
The Nielsen data showed retail orange-juice sales have slipped in every four-week period since hitting a one-year high of 48.63 million gallons in the period ended Jan. 18, when cold and flu season prompted consumers to buy more juice for its vitamin C.
"This one certainly puts kind of an exclamation mark on what has been an ongoing theme," said Joe Nikruto, senior market strategist at RJO Futures in Chicago.
A greater variety of beverages, including more exotic fruit juices such as pomegranate, energy drinks and ready-to-drink coffee, have taken market share away from orange juice, analysts and traders say. Higher prices for orange juice on grocery-store shelves also have discouraged consumers.
Retail prices for the beverage hit a fresh record, rising 4.1% from a year ago to average $6.44 a gallon in the four weeks ended Aug. 2. The hefty price tag is partly the result of the smallest Florida harvest in 29 years. The crop in the top U.S. orange-producing state has been ravaged by a bacterial disease that chokes off nutrients to fruit and causes the oranges to drop from trees prematurely.
Recent forecasts show the situation is likely to worsen in the next crop year. Last week, French trading conglomerate Louis Dreyfus Commodities forecast that Florida would produce 96.6 million boxes of oranges in the year beginning Oct. 1, according to traders and industry participants. That would be the lowest production since 1965-66, when Florida's output was 95.9 million boxes. Each box weighs 90 pounds.
Elizabeth Steger, an independent forecaster, put Florida's crop at 89 million boxes, which would be the smallest production in 50 years.
Both forecasts are below the U.S. Department of Agriculture's final 2013-14 estimate of 104.4 million boxes. The USDA's forecast for the next harvest is scheduled for release in October.
Supplies in storage are also shrinking. During the month of June, the amount of frozen orange juice stored in the U.S. fell 14% from the same month in 2013, according to the USDA.
Frozen, concentrated orange juice traded on the ICE Futures U.S. exchange ended Monday down 0.8% at $1.47 a pound. The Nielsen data were published after the market closed.
Source: marketwatch.com