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Lower Estimate for Orange Crop

Lower Estimate for Orange Crop

The 150 to 156 million boxes predicted is welcomed by Florida industry officials.

Published: Thursday, August 14, 2008 at 12:01 a.m.
Last Modified: Friday, August 15, 2008 at 2:52 a.m.
LAKELAND | It's a bit unusual for farmers to cheer for a lower crop, but top Florida citrus industry officials expressed satisfaction Thursday at pre-season forecasts that put the state's 2008-09 orange crop at 150 million to 156 million boxes.

"I think the numbers were constructive," said Bob Behr, an economist and vice president at Florida's Natural Growers, the Lake Wales citrus processor. "We come into this season with too much inventory. With this crop, I think it will reduce that inventory."

Declining inventories would push up the farm prices for oranges in the 2008-09 Florida citrus season, which begins in October.

The widely anticipated early estimates came from Elizabeth Steger, an Orlando citrus consultant, and Louis Dreyfus Citrus Inc., the Winter Garden-based processing subsidiary of the French conglomerate Louis Dreyfus Group.

Steger estimated Florida would produce 150 million boxes next season while Dreyfus put production at 156 million. The U.S. Department of Agriculture won't release its initial estimate of the 2008-09 crop until Oct. 10.

If they prove accurate, Steger's estimate would represent an 11.6 percent decline from Florida's 2007-08 orange crop of 169.7 million boxes, according to USDA's final July 11 update of last season's crop. The Dreyfus estimate would be 8 percent lower.

General Manager Peter Hahn of Dreyfus confirmed his company's estimate. Steger could not be reached to comment.

Both Dreyfus and Steger overestimated last season's crop a year ago. Steger predicted 198 million boxes, nearly 17 percent higher than the final USDA number. Dreyfus came closer at 180 million boxes, 6 percent higher.

Economist Tom Spreen of the University of Florida in Gainesville and Bob Norberg, a deputy executive director at the Florida Department of Citrus in Lakeland, agreed with Behr that the smaller crop came at the right time and would help reduce orange juice inventories held by Florida processors.

"Whether you're talking 150 million or 156 million boxes, that's about what the industry expected," Spreen said.

"With inventories building up, we sure didn't need 180 million. That would be a bad thing."

Spreen, Norberg and other citrus people were caught off guard last season when processors started building inventories because of declining OJ sales.

Rising inventories unexpectedly pushed down the farm prices for late-season Valencia oranges harvested from March through June.

As of Aug. 2, processors had a 36-week supply of orange juice, up from 23 weeks of supply a year earlier, Norberg said.

Even with the lower crop, Florida growers will probably realize about $1.39 per pound solids for their 2008-09 oranges, the same price received last season, Spreen said.

Processors, who purchase 95 percent of Florida's orange crop, pay growers per pound solids, a measure of how much juice with a specific sugar content is squeezed from the fruit.

That's a reasonable estimate, said Norberg, who said he was projecting $1.30 or less per pound solids before the Steger and Dreyfus estimates.

"That should have some upward pressure for growers' returns," said Mike Sparks, the chief executive at Lakeland-based Florida Citrus Mutual, the state's largest growers' representative. "We've got to address these huge inventories."

[ Kevin Bouffard can be reached at kevin.bouffard@theledger.com or 863-422-6800. ]


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