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Forecast Volatility a Concern

26 de março | 2007

Thursday, March 22, 2007 By KEVIN BOUFFARD The Ledger LAKELAND – The Florida citrus industry has been on a roller coaster ride since the 2004 hurricanes, and the ride will likely continue through this season, a state official told the Florida Citrus Commission on Wednesday. Bob Terry, a statistician with the Florida Agricultural Statistics Service in Orlando, acknowledged his agency has faced problems in accurately forecasting the size of the state`s citrus crop in the 2006-07 season and that those obstacles will affect future monthly forecasts. “I can`t predict what (the forecast) next month will be. I have no clue. We`re working on it now,” said Terry, a state employee at the Statistic Service, which is part of the U.S. Department of Agriculture. Citrus growers and buyers pay close attention to the USDA crop estimate because it`s the official measure of fruit supply, which determines market prices for citrus. It also affects trading in orange juice futures on the New York Board of Trade. This season`s USDA orange crop projections have shown unusual volatility, Terry said. Starting from 135 million boxes in the initial Oct. 12 estimate, it grew to 140 million boxes in December and declined to 132 million boxes March 9. The next forecast will be released April 10. The swings stem in part from the uncertainty over how many productive orange trees the state has, he said. The USDA bases the crop estimates on a biennial tree census, last completed in 2006, that is adjusted during intervening years based on historical data on tree losses. But tree losses have accelerated since the hurricanes directly because of storm damage and indirectly from the windborne spread of disease. “If (productive) tree numbers are too high, it`s because we did not allow for enough attrition,” Terry said. “That`s one of the issues that could be a problem in this year`s estimates.” The other contributing factor is the unprecedented variability of the amount of fruit on each tree, he said. Even within the same area, trees in some groves are flush with fruit while trees in neighboring groves look almost bare. The variability makes it difficult to come up with an accurate fruit-per-tree statistic for the whole state, Terry said. “This number is the hardest for anyone to see – the hardest for anyone to guess,” he said. In a normal season, USDA statisticians are confident their model used will produce a reasonably accurate count 95 percent of the time, Terry said. But this year, statisticians are only about 93 percent confident in the model`s accuracy – a big drop statistically. So far, all the adjustments in the Florida orange forecast have come from early and mid-season varieties, which are harvested until March. The forecast earlier this month showed Florida commercial groves would produce 65 million boxes of Valencia oranges, harvested from March through June. Terry said the USDA has no reason to change that number now, but he acknowledged the statistical model may overestimate Valencia tree numbers. The grapefruit crop estimate has shown less volatility because of a much lower variability in fruit per tree, he said. Earlier this month, the USDA raised the grapefruit forecast to 28 million boxes from 26 million. To get a better measure of the number of citrus trees currently, the USDA will do a census update in the top 10 citrus producing counties, including Polk County, he said. Collectively they produce more than 80 percent of the state`s oranges and grapefruit. The update is scheduled for release in September. Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-802-7591.